Can someone please explain volume second derivatives? I am having some trouble reading the code in Wealth-Lab. From memory, I have seen instances when the volume second derivative increases independently of whether the volume is increasing or decreasing. My textbook understanding is that it should be representative of the acceleration of volume, which does not look to be the case in the case of DTLK. Here we see volume increasing at a faster rate, but volume second derivatives decreasing. I need someone to dumb it down for me⦠<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1237160"></img>
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. Sypdertrader, I have been resisting asking questions as I'm still going through the original journal and other material. But are you referring here to a WealthLab scan, or something you do intraday via QCharts? thanks- palinuro
hi palinuro: I am at the same stage of review of the material as you are. Let me try to make a contribution by submitting an answer to your question, and if he agrees, perhaps I can save Spydertrader a little time. Unusual Volume (UV) is a feature of QCharts that can be watched intraday or EOD to gauge the current level of volume. I think it's title is kind of a misnomer because it is just the ratio of the day's total volume at that time to it's 65 day average volume. Therefore it is useful as a comparison against other stocks to gauge activity level intraday (or EOD), or to gauge where you are related to the key volume levels being monitored for the given stock by knowing in advance what % of 65 day average volume correlates to those levels and utilizing the time of the observance. These have been posted but I don't have them handy. I don't use QCharts, but have AmiBroker display this in my volume pane. For DTLK, EOD yesterday I show 3.29 indicating 3.29 times the 65 day average volume. hope this helps, Rick
I have liked GIGM since Sunday keeping an eye on it all this week - just in case it decided to run. While GIGM hasn't broken from its current downtrend quite yet, it looks to have already created another point three - only this time in an uptrend. As you have pointed out, you need to wait until price breaks through the current downtrending channel, or, if entering prior to such an event, remain extraordinarily cautious. When trading these non-dominant traverses, I always prefer to reduce size in an effort to mitigate my risk. ALJ ANDE ANEN BTUI CBEY CMED COGO CTRN DTLK DXPE EZPW FTEK GIGM GMXR GROW IAAC IIIN ININ JOBS MGPI MIKR NEU OMNI RACK SMSI TIE TWPG TXCO XING Currently, FTEK IIIN, RACK and TXCO find themselves without rank. Think of Second derivatives as your family automobile. The zero line marks the point where your car remains stationary. The further away from zero you see the lines, the faster your car goes. However, just as your car has the ability to move forward, as well as in reverse, so too, do the second derivatives provide both speed and direction. In the case of DTLK, volume began to accelerate (down) a few days before price accelerated (down). Jack calls these vector models (and not scalar) because the second derivatives show both speed and direction. QCharts uses Unusual Volume for Intraday measurements. You can locate a similar metric by using Vol % in Quotetracker. Jack provides a more detailed explanation on Unusual volume sorting in several of his camtasia videos. R/R provides a nice explanation above, but you shouldn't worry too much if you have yet to run across the UV usage yet in your reading. Better to continue to build a strong foundation until you reach the point in time when the discussion on UV begins (in Journal Two). I hope you all find the above information useful. - Spydertrader
Shorted SMSI @ 15.72 as LBDU was reached, and UV exceeded 22%. With Shorts, I place a tight 2% trailing stop, which might have been too tight, as the stock dropped, recovered, then I was stopped out @ 15.79. Also Shorted EZPW @ 44.10. Edit: Just bought back EZPW. I didn't like that the volume was not moving anymore. Closed out @ 44.36
trying out some shorts, using macd/slow stochs as triggers. short chap/knot/anen... from the open w/ a 5% trailing stop off the lows reached.
The reason I use tight stops on shorts is to get in and out fast. If I get shaken out, there's a reason for it, so when the stock comes back that quickly, it gives me pause. The stock may decline again, but I got on the train when it was zooming down, and they're the one's I want to ride. Any indecision is a reason to exit, in my mind... My short tactics are new, so my mileage may vary...
i think the reason foible may be making his suggestion is that SMSI is now making a point 3 intraday, which is a safer place to short at using a tight stop than where you did earlier.
Ha! I'm not so clever. I got my first short on SMSI at 16.26 and was adding all the way down to 15.60. When it came back, I exited for a very small profit. While you could certainly get a better price where SMSI is trading now, I want to see some sign of continuation, like volume coming back and price taking out new lows. But I'm really a very novice trader and I suspect my trepidation is holding me back. If volume comes back into SMSI, I may be looking back at the narrow bars and thinking "what a great entry that would have been". Luck!