Intraday Consolidation, Narrow Range

Discussion in 'Trading' started by ar1zona, Jan 14, 2011.

  1. ar1zona

    ar1zona

    Hi guys

    I'm currently working on some simple automated systems while scalping at the same time. I don't really do momentum but I know many momentum traders have a few favorite setups they trade and use real-time signal scanners to look for those setups over a basket of stocks. As a scalper, I also have some preferred setups but having difficulties finding/building a scanner to search for certain patterns.

    Click for charts
    http://fei.wasabistudio.ca/img/20090222_7da231e2feab165aa51aaZAJ9R5hJ0f0.jpg

    http://fei.wasabistudio.ca/img/20090222_d0a11c5e3817e2fde7d7uJ40WJLL0069.jpg

    The image attached is the kind of setup I'd love to trade. There are times a stock trades within a very narrow range with decent volumes for a long period of time (i.e. 1 hr). By narrow range I mean 2-10 cents with either a clear support or resistance level. All you need to do is to enter a position near the support/resistance and take one or a few penny profits as price fluctuates within that narrow range. And do this repetitively until the range breaks. Yes, your last trade would probably be a losing one and you have to immediately cut loss if it breaks against you. But as long as you can make a few good trades before the break out on average you still make money cause of the high win rates and limited risk (if you cut loss early).

    So far this setup works very well on the stocks I monitor manually, but those setups are rare if you only monitor a few stocks at a time. However, I believe out of the 6,700+ stocks trading in the U.S. market at any given hour there has to be at least one trading like this.

    My problem is to scan the market for this kind of setups before it "expires". There are lots of scanners that give you a signal when a consolidation breaks out, but I could not find one that just looks for consolidation. Actually I did find a scanner similar to this, but it scans consolidation on a larger scale but I need real-time intraday signals.

    I do have some experience working with retrieving quotes from sterling, but I know only how to get real-time bid/ask/last price and everything else in the DDE server into excel. I am wondering if everyone knows how to systematically import real-time minute data from sterling? Let's say if the 15-min bar is narrow, with hi-low<= 5 cents & good volume. The charts on sterling can give you minute data of a particular range (manually), so there has to be a way to do this automatically. Or is there any other way to find stocks trading within narrow ranges?

    To save you time, this is what I already did and its not working out: get bid-ask size from sterling find the ones with a large bid and tiny ask or the opposite. Those situations is usually too one-sided and the price basically stops at one level, and you cant really get in. So I need the price to actually move, but only move within a narrow range of a few pennys so its quicker to get in and get out.

    Any input/hint will be appreciated, thanks.
     
  2. ar1zona

    ar1zona

    up :)