The move was over when volume was at its peak? Would you exit before the last red candle was finished? Or would you wait until the start of the nexzt green candle? Did you exit early because of something that happened with the volume chart? The peak was a signal? On day 3, between #4 and #5, there are red volume bars that look the same, but in reverse. The price kept falling so is that a different signal for something else? Would you exit early there too? How about day 6, and the red bars between #11 and #12? Would you exit early here? The red volume bars between #12 and #13 are like #1's, would you do the same and exit early here? Day 6's upward movement was larger than its down. Why then arent you trading up? Because it's a longer trend? Should beginners trade this because its longer? What kinds of indicators do you use? Bolinger Bands, exponential movnig averages? How many days? 20, 50? Support and resistance levels? Thank you. PS you can post answers from my pm's here too.
===I would be grateful for any ideas.=== You do not need any ideas, you need ideas that work. Those who have them will not tell, those who tell them - do not have them...
The Q's are a sophisticated vehicle and, IMO, not suited for beginners. Good setups occur constantly on the Q's but you need patience and discipline to execute a winning strategy. From reading your posts, you still have so much to learn, I suggest you branch out and screen a variety of stocks that show good opportunities rather than just the Q's. Also, I would think most (at least myself) would rather trade the NQ futs rather than Q's, due to opportunity cost.
===Good setups occur constantly on the Q's but you need patience and discipline to execute a winning strategy.=== First, he needs to develop this "winning strategy". When he'll have it, it will be irrelevant for him what to trade. Since he does not have the "winning strategy", it also irrelevant for him what to trade, since result will be the same - failure. So the best thing to trade for a novice trader is to trade on paper.... and to start developing the "winning strategy".
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http://www.elitetrader.com/vb/attachment.php?s=&postid=1097111 Okay. First of all, I wanted everyone to see the relation of volume to price. The biggest move in price is the largest volume bar, the second largest volume bar was not the second biggest move in price, and because it occurred right after the largest movement and bar, this indicates the down trend is likely over. This does not mean you should be exiting here though. A lot of times in a big move there is a pause in price movement and volume, then it resumes. When this occurs in a stock that you're in short, wait, wait, wait for the trailing stop, as it is much more difficult to get back into a short after a big down move in a stock. For an ETF you don't have to worry about uptick rules, so if you wanted to you could try to get out early, but I wouldn't. Patience is a virtue, this chart pattern could have dropped another .20 and possibly caused you three unnecessary trades along with a headache caused by missing .15 of it. Wait for confirmation that a reversal is coming when short in stocks, otherwise you may not see another uptick to get in on until the move is truly finished, ETFs don't really matter as much. The peak was a signal, but it was not a stand alone signal. When the next candle comes up, I take into consideration that the stock is now headed in a new direction on significantly less volume, because of both volume and price, I'm not jumping back in after hitting a trailing stop. That's the signal. Circles 4 and 5, not the same because volume didn't soar then fall substantially with a tighter price movement. No, don't exit unless you're hitting a trailing stop, then watch T&S for a new entry. Circles 11 and 12, no because price was still trending down. Once higher volume comes on a new price direction after falling volume, I'm usually out. Circles 12 and 13, it's not as significant of a drop in volume, but the price movement was very tight, good observation, and yes it it similar but again not an early exit in a short stock, ETF up to trader's preference. Usually it just means I'm not jumping back in with the same shorts. What and how you trade is up to you, but after hitting a few stops and seeing that many quick retracements, I probably would not have tried to widen stops and go long. I'm not trading because of it being a longer trend, I like long trends, I'm not trading because its chopping along after a big down trend. What kind of indicators do I use? You're looking at them. I won't tell anyone that Bollinger Bands or Stochastics and the like aren't useful, they can be, I just don't use them anymore. I screen stocks based on specific fundamentals, but I don't enter and exit trades based on indicators other than price and volume. I do check news and market direction, among other things, to double check that my ass won't fall out of the trade. Moving Averages aren't exactly ideal for daytrading, especially if you're using 50 day. But to each his own... At some point new traders will need to learn discipline, I'm not saying new traders should specialize in ETFs of any kind, but they'll help them trade with the same direction as the market (since they tend to mimic the market) and it will also allow them to learn and practice short selling. In this market, learning how to short sell successfully is difficult because it has been in a bull for a while now. New traders didn't have to learn how to short, and they could get by with that, but now we may be in the early stages of a new long-term bear like 2001-2003 or we may simply just be in a bull's hiccup. Either way, when are they supposed to learn? Plus I could think of many other places that would probably be much worse. I don't know if I agree with the paper thing, but everyone does need to have a clearly defined strategy(ies), replete with appropriate money and risk management, and a good depth of knowledge for how the market works before jumping in...
Yes you are right, however, "at some point" is the thing that few take into serious consideration given the learning curve and inevitable drawdown that will occur over the next year. Trading broad market direction without a good feel for general trading rules (like cutting losses etc etc) is like competing with professionals while having the status of sub-amatuer (a beginning beginner, excuse the word play). The pros who trade Q's daily will kill this guy day in day out - it takes time to learn to trade an instrument like the Q's. I'm not saying he shouldn't learn to trade the Q's, I'm just saying the markets present so many different types of opportunity where learning can take place with a little less punishment. This guy is choosing to day trade with pros and he doesn't know shit yet, kind of a recipe for frustration and failure IMO. He would be better served by branching out. Here are some suggestions for developing into what I believe is a well rounded trader: - Get an IBD subscription. Look at the mentioned stocks regularly and notice the criteria IBD uses in rating and evaluating these stocks. - Scan all the charts you can for a particular setup - a bull/bear flag is an easy one, they occur often. Start doing some basic analysis of why these flags FAIL and how much price rise/decline is associated with a typical failure. Look carefully at S/R levels and what type of volume these levels have. - Observe which stocks correlate with broad market movement and which ones do not. - Trade embarrassingly small based on the conclusions you've made from the above. Keep track of what works and why. - Get rid of trades that go wrong right away. Just keep saying to yourself "I will cut this loss at such and such price". Although you will break this rule too many times at first, never ever make a change to your stop price, unless it is to a breakeven or take profit level. The above will do two things: 1. It will make you selective. This is huge - being patient aka "selective" with your trades will make you focus on the trade rather than the money. 2. It will cost you a bit less in learning curve dollars and develop complimentary skills that you can then apply to trading the Q's. Mike EDIT: In terms of "Plus I could think of many other places that would probably be much worse", even though I mentioned the NQ in my prior post - do NOT go there until you are profitable for several years...
Okay, I think I understand what you're getting at here. I agree with a lot of the things you said, they are valid points. Noobs should learn the intricacies of the market before they even think about trading. Then they should be very cautious right? Makes sense, however unet1604 is already trading. So now what? Tell him to go away and never come back because he did what a lot of new traders do and got over anxious? Likely from the appeal of striking it rich in the market, only problem now is that he realizes he was unprepared and is now asking for guidance. What it sounds like to me is that unet1604 wants to specialize in trading QQQQ. Is that going to be a problem for him? Probably. He has never shorted before as it was never part of his trading strategy (even though he's trading Qs) and his risk management was nonexistent, he's probably not day trading as he is buying only once a day, so Here is where I'm going to go next... ATTENTION ALL NEW/YOUNG/ASPIRING/PROSPECTIVE TRADERS: Learn the intricacies of the market before stepping up to bat. Open an account, and stare in awe of the Level II screens, the charting features, read books and watch DVDs geared towards an introduction to Day or Swing Trading. Toy around with your broker's software, research other trader's trading strategies and use them to formulate your own trading strategies, write yourself draft after draft of Trading Plans including all kinds of rules for protecting your initial trading capital, use ETs search function to look up specific threads concerning specific subjects and read old and new posts regarding what it is you want to trade. Read about other traders' horror stories, and learn from those to help avoid having your own. Develop conviction, humility, and learn how to control your trading psyche. Do all of these things and much, much more before you ever place your first trade. Trading isn't the quick road to Easy St. that some people think it is, to be successful here you have to understand exactly what you're getting into before hand, and you have to feel like you're 100% prepared before you dive in. Of course you won't be, nobody ever is, but you have to feel that you are. Even if you don't win at first, properly preparing yourself for success will carry you through for the long haul. The people who eventually "Get it" are almost always the ones who are best prepared. If anyone else has any other questions (and judging from all the PMs, I know you do) feel free to post and ask your questions on this or any other relevant thread. Don't be afraid of people on here who bash new traders, they're all sour grapes to everyone, not just to you. Ignoring them like the rest of us do will usually suffice. PMs are great, but asking your questions on the message boards help others who have the same questions as you, and it will also allow you to get more than one response from more than one person. If you're embarrassed or don't want any backlash, feel free to keep PMing. Good Luck to all.
Do you just specialize in the QQQQ? Other ETFs too? Do all the chart entries you pointed out apply to other ETFs and stocks too? Or are stocks are diferent because of the ticks rules? Thanks for anyones response, and sorry for all of my excessive PMs. Could you show me chart entries for another chart other than etfs? Like how to short regulat stocks? Why is 50 days ma bad for day traders? So, you look at volume, but make your decisions on mostly price? Thanks.
People think regurgitating memorized information is learning. If you were to just copy somebody, you wouldn't be happy. You have to internalize what it is you are trying to accomplish. Do you watch the Q's trade for long stretches during the day? Do you use bars, candles, 5 min, 15 min. By doing this you should eventally have some ideas of your own, and then you can assimilate some of these ideas into your own system. I found, when I had the same question, a video on eminis where they used candles to day trade. I liked it so much, I use it exclusively, and up to that time, I used bars. It works for me. So it was simply trial and error, and I"m adding little things and deleting them all the time, like we all do. But again, you need to internalize a system. You need to able to drink a few beers, and explain it in a cogent manner. Then it's yours. I like it so much, I won't enter a long if I'm seeing a problem w/the Q's, and vice versa. I'll see if I can dig up the link for you, it's extemely simpllistic, and get it to you. It might work for you. If not, just part of the process.