Good spotting DM, nothing much gets past you. Yes price can rise on the bid strikes, but firstly a correction to my last post. Time is not irrelevant to me as I stated,, it is just that I view it through volume. Now back to your excellent observation concerning ask/bid strikes and price. You will notice that price often moves against the bid/ask on the glbx and particularly at the pre-open. It can occur again at the open as price/volume scramble to gain traction and a direction for the morning. It is popular during the low volume midday period. In fact it can happen at any time which is why I have a WAV file based exactly on the amount of reversal as a % of total volume. It is one of my triggers. As I view things, there are 4 inputs. 1 ... Price. Because it it all encompassing and it is what we trade. 2 ... Volume. Because that is us. We are not Traders, we are volume as soon as we enter the market. 3 ... Time. Because everything we do has a start, middle and end, but beyond this I read time through volume because volume is the outcome of our actions. 4 ... Limit Stops. Because they sit in the market like landmines and they translate into volume when touched. (#4 is a fascinating subject and is worthy of much discussion, but back to price/volume.) How can we compare price and volume? In a small bar, price can move 0-6 tics and volume can change by thousands. In a larger bar, things only get worse. Firstly, the macro view. In a rising market we would expect the asK/bid spread to steadily increase, give or take minor rumblings, which we then use as long entry points. We can also use them as exits, so instead of staying in a long trend for an hour we might take 3 -4 shorter long trades and possibly throw in a short for 5 tics just because we are hungry for tics. The micro view is dangerous because we are inside the "noise" where all our bad calls will be filled and some of our good calls will not be, thus skewing the outcome. Well, one way is to measure the amount of reversal of price against the ask/bid strikes as a % of total volume. Another way is to compare price & vol, which at the moment are like apples and lemons, so we need to normalize them. There are plenty of means to achieve this, but I prefer stochastics. Now we can plot apples and lemons in one window. Everything is done to produce a daily stream of net positive points. I never try to maximise anything in the trades. kind regards f9
F9, if I were in your part of the world I would pay big bucks to watch you trade, but you probably would be too smart to take dollars. As always when wisdom fails me and I start a thread, I am humbled. Marvelous observation abou the pre-open, which I do not trade. But you also see it in the immediate post-close aftermarket, where I often let winners ride to make up for all my RMH losses. At 4:00 PM ET, never were truer words spoken than "If you want it bad, that's how you're going to get it!" Just between you and me, you also failed to mention those "are you absolutely sure?" retraces after a big run. No need to reply, as we don't want to give anything away. As for the spread rising, I monitor it in NQ, but never see it rise to more than 2 ticks intraday, and then only for an instant, never extended, so I don't follow. Only see 3-4 ticks outsie RMH. Do you trade with limit orders exclusively? (BTW, your English is excellent for an Argie.)
Hola DM, Can you expand on your comments concerning monitoring the spread in the NQ as I am not quite sure that we are on the same wave length. I will use MO's at times for entry/exit and always for my WTSHTF protective stop. I never let my pro stop be taken out, as I always exit as gracefully as I might when the trade does not develop in time. Thank you for the kind words in regard to my english. My english teacher in NZ all those years ago will be smiling in his grave, but I must say that I owe some of my success to my english born Wife. We came to BA just after the big bang to lend a hand in the property market and some how forgot to leave. PM your e mail DM if you wish to carry on our exchanges and I will do the same. So far this thread has held together in a civilized manner for 9 pages, but I fear that we will not pass undiscovered for much longer. kind regards f9
F9, I keep up the teeny-tiny little study attached (spanning about an hour) on my one second chart showing black when the NQ spread is two ticks and red when it is 3+. Example for today's premarket. As I use market orders exclusively, I try to avoid spread widening. As to emailing, they do not let dead people have email addresses. Only ET allows that. Plus, my anonymity (why did I initially mistype it as anonymititty?) is richly deserved and therefore closely guarded. I will PM you.
Holy Crap, Batman, great friggin post. I favor the humility and patience part of it. I would include the opposite of greed...is that up there...or does humility cover it?
Pairsarb, thank you for your kind remarks. That is the nicest thing anybody has said about me since I died 67 years ago. In my mind, the opposite of greed is the lack of greed, and it is subsumed in detachment, meaning that I do not expect any more from a trade than it can give. Women are another matter altogether. I will relentlessly and mercilessly push push push and drain them dry.