Stretch / Squeeze provides a signal for continuation or change. Your attached chart of STR/SQU appears slightly skewed to the downside. During the timeframe presented all of your histogram bars head downward. This tells me the 'offset' used wasn't correct. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1423505> No "average number of times" exists for when one needs to 'reset' the offset during the day. Some days, the calculations require no reset. Other days, I have had to reset on 4 different occasions. However, what you did see (even with a skewed offset) is STR/SQU providing two different signals within the same bar. I would not consider today an 'average' day, and as such, I would not consider the number of resets needed for today to be average either. As you can see, obtaining sufficient data sets, and then moving to the 'action' phase, prevents a trader from obtaining incorrect data. By example, one should not have needed to go very far beyond ES Price and Volume in order to determine continuation or change on the 10:00 AM Bar. Later, when one has mastered the various levels of resolution, trading at the bug level (with the appropriate tools) permits the trader to trade within the bars. Thanks for providing an excellent example of how looking at the incorrect data at the incorrect time can cause a trader to 'see' change signals where, in reality, no such signals for change exist (except at 'fine' resolution levels). - Spydertrader
Audkid1, Thanks for digging up that post. Puts pace considerations on the table. Also wanted to mention for Qchart users to watch their sqz/str charts and make sure they are running on time. Because the INDU opens after the YM, some might experience a problem with the chart running behind time and not reading properly if you start Qcharts before the INDU opens at 9:30. If this happens there are several things that can help: Close and Reload the chart Change time frame and then back Clicking the "all session" box One of these steps should reset the bars so the current ones are compared. Also leave a space on both sides of the "-" in front of the premium as some versions have issues with that. Regards - EZ
Does anyone know if we can do the Stretch / Squeeze chart with QuoteTracker and if so, how to do it? Thanks
No way to do it that I know of. I have been trying to get someone to code an excel app to do it but so far no takers. Maks excel works but I would rather have the histogram.
For a quick and dirty look at inflection points you can also peek at the uptick/downtick on the dow 30 stocks,i.e., the cash YM. If your quote screen allows you to set a color field (background,text, or foreground) based on uptick/downtick then you can get a good feel for turning points by watching the overall color of the quote panel. It reminds me of watching a school of bait fish. You can see when the entire school has suddenly switched direction.
Chart for the morning. Hard to trade today so far. I must say that stretch squeeze does give clarity and confirmation on important bars. Sometimes it invalidates what you're thinking and sometimes it confirms. Sometimes there are several signals in a row on important moments. It's very important not to check it too often though. Only on important bars. currently I am long. regards, Ivo
1. I currently have my 'offset' value set at 65 2. Inside -2 to +2 we consider neutral or noise - no signal. 3. As I indicated in this post, one should not look for STR/SQU to provide a signal for change or continuation except at the Resolution Level action points. 4. In order to seek a correlation between STR/SQU and ES Price, one needs to use a combination of STR/SQU the DOM Levels and Wall changes, as well as Trend Lines and T & S. 5. Remember, sufficient data sets means obtaining the data needed to differentiate between continuation and change. If the sufficient data sets needed can be observed using ES or YM, then a trader need not continue to STR/SQU at that point in time. The goal of adding tools as we continue through the syllabus is to provide an opportunity to catch the change signal sooner in the bar while remaining on the correct Resolution Level for monitoring. In other words, we want to remain on the Forest or Tree Level for monitoring, but we use tools that can provide the opportunity to 'see' the change signal sooner in the bar. We do not want to use the finer tools to catch every signal for change throughout the day - only those occurring at our individual 'Action Points.' When a trader masters their current Resolution level for monitoring using all the tools available (even those tools not yet discussed), then the time may be appropriate to move to the next level for monitoring and thereby increasing the number of signals received and trades taken. By example, Forest Level Resolution Traders look for Point Three's and Breaks of the Right Trend Line. The only time a Forest Level Resolution Trader needs to use any tool (PRV, Gaussians, YM, STR/SQU, DOM, T&S, Tic Charts) is at the right side trend line. As long as price remains within the channel, the Forest Level Resolution trader need not care whatever else is going on. Once price approaches the right trend line, The Forest Level trader thinks, "What do I need for continuation, and What do I need For Change?" Using one specific example of how the mental process needs to work .... If an uptrend, then, Increasing Black ES Volume with Increasing ES Price (on a PRV basis) = continuation Increasing Black YM Volume with Increasing YM Price = continuation STR/SQU > +2 = continuation Increasing Red ES Volume with Increasing ES Price (on a PRV basis) = change Increasing Red YM Volume with Increasing YM Price = change STR/SQU < -2 = change The trader then thinks, "O.K., I know what I need to see, now what do I see?" The trader sees increasing PRV Volume with STR/SQU > +2 This sufficient data set says continuation, so the trader mentally moves to the 'Action Step' which changes based on 'context.' Is the trader already long in the uptrend? Then Continuation means hold. Is the trader short in the uptrend? Then, continuation means reverse. Is the trader sidelined? Then, continuation means enter long. As you can see, the action required of the trader at any point in time changes based on the context. However, the market's mode (continuation or change) remains the same irrespective of context. Some, may recall my warnings over attempting to perform brain surgery while using sledge hammers and pick axes. Previously, traders attempted to trade at resolution levels for which they did not yet have the tools. While STR/SQU definitely holds no resemblance to a pick axe or a sledge hammer, it isn't a scalpel either. As a result, I recommend using STR /SQU in a manner more closely correlated to each individual's Resolution Level Monitoring, rather than, a stand alone signal by which we look to take every wiggle, head-fake, and pop. I apologize for the length of this post, but hope many find the information useful. - Spydertrader