So to catch things like this in the future, I would monitor the final universe after trading, looking for stocks that show some potential weakness, then place price alerts outside the channel lines. When the alert gets triggered, I would confirm that the volume is strong and then I would enter in short. Does that sound about right? While these look lucrative, it looks like they involve a lot more subjectiveness for entries and exits, so I'm thinking I'll file this under "intermediate strategy" and greatly reduce my risk levels while trying them Sounds good, thanks.
Close, but I want to make sure you look at the whole picture here and not oversimplify the process. We know form Jack's Jokari Window how the price volume relationship operates. When we see increasing red volume bars (selling) combined with slowing of a price increase, we can anticipate a change in trend. Since the current (intermediate term) trend remained up, we look for the short term trend to head down. The next morning, we see an increase in volume (based on PRV levels), but this time, we see falling price. Again to the Jokari Window we go and note, with increasing red volume (selling) and decreasing price, we expect the trend to continue (to head lower). We also note the high levels of Unusual Volume present using a UV sort of the Final Universe. In other words, of all the stocks we watch, DTLK has the highest amount of activity. We again anticipate continued direction of the current trend and we see this confirmed when price breaks through our short term down channel on an increase in volatility expansion. In other words, we never stop anticipating what comes next. By doing so, we force ourselves to monitor the market looking for confirmation or invalidation of our expected outcome. - Spydertrader
Nice journal, lots to go through. I've finished the first Journal and am working through this one. Could you please explain how you determine if a bar is a "red bar" as I can't seem to find that information. TIA, Seneca
The charting software you use has default settings which allow you to see the color of both volume and price bars. Red Volume Bars indicate increased selling volume, just as green (or sometimes black) volume bars indicate more buying volume. The chart posted above came from Qcharts. Quotetracker uses Green, Red and Beige for its volume bars. - Spydertrader
Welcome back Spyder! I can re-iterate the above on my sell today of BTUI @ 12.65. It broke the left trendline (13.57) on the day of purchase - 3 days ago, and has been retreating since. So what should have been a nice 7.2% profit ended as a wash. I can consider myself lucky that it was an excellent lesson, paid for rather cheaply. I exited COGO with a wash also. In retrospect I should have been alot more concerned about getting in after such a large increase in price over the last 8 days. Not that getting in was the problem, I simply should have been more diligent about banking profits when they were offerred. Another cheap leasson. I missed MIKR and DTLK. Congratulations to all those that did well today.
i too got caught on btui, a nice profit turned to about a 2 1/2 % loss. made that up today and a bit more on MIKR, so all's well in the end. i've noticed a lot of the positions i've put on lately are getting sold into as they rally. the mid-day lull often turns into an afternoon slide, so i'm back to daytrading rockets for a while.
MIKR and DTLK were not included in my watch list. The Dry Up Volume Scan didn't tell they were in dry up on Oct 17th. My system signaled two trade ALJ & NEU today but price decreased ever since. At 10:51, the volume of ALJ exceeded the Dry Up volume as calculated by the script and the MACD is positive, Stochastics is little above 75, price improvement was observed compared to yesrterday's close. NEU signaled the trade at 10:59 right before 11:00 am. The prices of both stocks declined ever since.
You want to make sure The Stochastics (14,1,3) Indicator falls above the 80 level on a 30 minute chart. - Spydertrader
Hi Spyder, Here is an example of my evening prep for a long trade tomorrow. (I still don't short) I will be looking for dryup volume and preferably .22 before 10:30 with positive price improvement over price on the close of 10-18. I will be looking to protect profit when price goes beyond approx. $11.10 or so. What do you think? Does it sound like a plan? gooch87 <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1237049"></img>
Spydertrader, Could you please post your current Final Universe List so I can use it as a reference point to get started. Thanks again for an excellent journal.