http://www.elitetrader.com/vb/showthread.php?s=&threadid=152053 Take your time in reviewing this as AMT thoroughly described his (Auction Market Theory based) methodology there. D.
Manly - I will answer your previous question (with screen shot) once I get back home in the morning.....I am with relatives/parents now.
Is that correct? I would think the short inventory is established by borrowing, so it would not be balanced a "...long inventory at the same price and date/time."
I was thinking in the context of futures, where a short is essentially a new contract opened. For stocks, I see what you are saying.
Hello AMT4SWA: I read your opening post carefully ... actually I was obliged to read it very carefully as you have an unfamiliar writing style ... well unfamiliar to me at least. To be honest, in my first read I thought you had been schooled in the Jack Hersey method, but of course that is pure supposition on my part. "On the 17th of this month we had our first proper test of this resistance zone" Given your post is dated 05-01-09 01:22 AM, you may chose to give this a little further thought. Anyway, let us put all that behind us as Monday approaches with alarming speed. Am I to gather that when your posts are boiled down to their core, you are referring to trading simple support and resistance bands. If so I will receive the good news with an enormous sense of relief. Your cumulative delta photo will also be eagerly received as I passed through the cum delta phase some time ago having struggled miserably to turn it into a predatory advantage with only limited success. In fact 50/50 is a ratio that comes to mind. Imagine my horror when I discovered that it did not look unlike a similar period MACD. Come to think of it, it was a sorry day in the house of f9 when I came to the glaringly observation that most indicators are clones of each other. Silly really, because their parentage is the same and so what should have I expected. Still, I await your chart with eager anticipation and I wonder what opportunities "short inventory and long inventory" have in store for us all this week. Come to think of it, what ever happened to buying and selling ... perhaps this week I will accumulate and distribute ... next week I will "flog off and grab" regards f9
Short inventory in this context is simply a short seller opening a short position trade at a particular level. True, there is a buyer on the other side of the contract. They both have to deal with their trade position. You cannot be certain if that buyer was opening a long position, or closing a losing short position. Similarly, you cannot be certain whether the person who sold was closing out a winning long trade or opening a short trade. Prices can fall if buyers do not support prices, as prices simply fall under their own weight. Prices fall faster when bulls caught in bad positions are forced to liquidate or if short sellers initiate selling and open new short positions.
Thank God some people still express themselves clearly ... so I am not going mad after all. Gracias stoneface. regards f9
He might be in a different time zone than the ET board itself. That's nothing to grill a man over the fire for... As for cumulative delta usage... as with any other indicator, you'll have both schools of "it works" , "it doens't work", and everyone in between who says "it works sometimes", or "it works, you just have to know when to use it and when not to use it." I think watching CDV does provide extra market generated information that I find useful to me. Perhaps it was of no value to you. It is certainly not a "derived" indicator or oscillator. In the most simple form, it can simply be seen as a buy / sell pressure meter. Would you please discuss the former methods in which you used cumulative delta that failed to work? I am interested to hear your opinion on the matter. Stone