I didn’t have much time today for trading. But I think I managed 3 small trades in Meds. I saw some examples on correlation between multiple time frames (5,15,30,60) so I took the trades so I could show you guys this stuff in a clearer way. If I have time I will post it wed. Also I want to revisit the question above. Just super busy the rest of the week and leave on a trip out of state.
Last three weeks I have been extremely busy doing other things and not much time for continuing this journal. Next two weeks will be likewise. After that I will try and pick back up with this journal. Volpri
I don't have time over the next 3 weeks or so to markup charts of live trading but thought I would post an old chart from back in 2012 showing some concepts you might find interesting. The chart portrays signs of weakness and selling pressure. It is correlated with volume for you. I generally don't need to look at volume when trading live but the concepts apply as expressed here. I like binary decisions when trading live and volume just adds another element to the decision making. However, I don't deny it can be useful. I just find I don't really need it. I can pretty much just look at price and tell by the spread on the candlestick and its direction if it was made on lower or increasing volume. But for those of you who are not used to trading this way throwing volume up on the chart can be useful.
I'm busy so don't have time for live posting but here is something to think about when correlating vol with price. Maybe you will find it useful?
I haven’t had much time for posting annotated charts but here are a couple showing trades today 11-26-2019. Notice there are two charts. A daily chart and a 5 minute. It is often useful to look at a daily chart to get and idea about what kind of day is probable for the next session after the open, an up day or a down day. just looking at the daily chart we got successive bull bars before today’s bar (one with my trades on it) starts at the open. So three bull bars. That is three days that are bull days. What is more likely that the next daiky bar will be a bull closing near it’s high or a bear? With tight bull channel and 3 bull days it is more likely to be an up day on 11-26. So, how is this useful? Well when the session opens low Odds favor going long and averaging down if need be after the initial entry. Price will probably close the day near it’s high. HERE I average down on trade#1 the. Exit in a rally. Trade #2 and #3 are straight scalps no averaging down. Trade #4 has the initial entry and 3 more averaged down entries. Why would I average down here? Because this daily bar (one with my trades on it) opened low and so odds favor a high close for the day especially when looking at the daily chart. So, I was comfortable adding to a losing position as I believed price would rise and we would have an up day as opposed to a down day. Look at that daily time frame to determine likely daily move!
If you buy any black bar in an uptrend or sell any white bar in a downtrend, you will have a very very high chance that your reward is 2x+ the risk you took. I would say that the middle of the trend tends to approach 2:1 (reward:risk) more often (where the trend gets its most serious test) and also the last or second to last opposing bar close in the trend as it morphs sideways or changes into a downtrend / major retrace. All you have to do then is to be able to correctly spot, in real-time, that you actually are in a trend at least 40% of the time and you will have a winning system. If the above doesn't apply to the instrument you're trading then the instrument has lousy volatility (aka why Forex s#cks). You can go over 100's/1000's of charts and prove it to yourself. Volpri, I look at your 5 min charts and see this all the time, regardless of your comment on why you took such and such a trade. Same thing, over and over.
Don’t think I will have time for more scalps today but here are some i took this morning. I consider tge bullish behaviour on the daily chart the last 4 days so I am willing to start going long on the open of 11-27-2019 and averaging in IF prices opens at or above the close of 11-26 the prev day. It does so I start taking positions averaging down betting price will head in my direction soon after taking my positions. It does and I exit with a profit on all entries. Since support is holding but we are going sideways for about 16 bars I start trading this as a range going long at the bottom and covering at the top. That was trade#2. It is now, as I type, morphing into a slight bull channel. I don't have time to scalp much more but i may just go long on a pb and hold to near the close (or any good profit level say 3 or more points) betting we will close higher than 11-26 Trade #1 was averaging down. Trade#2 was a straight scalp.
I did manage to take a couple more trades. Straight scalps. The last one I just left as a bracket order while I went to town to run some errands. I was betting we would have a higher close than on the prev day (26th) and my profit target for the last trade #4 would be reached while I was gone. It was and I exited trade 4 with a profit. In summary, 4 trades taken today. Trade 1 was averaging down betting price would trade back up enough for a profit before the close. It did in about 1.5 hours after the open and I took profits. Trade 2 was a straight 2 point scalp taken about 25 minutes after trade1. Both these trades appear on the chart above. Trade 3 and 4 appear on the snap shots of the charts below that were taken after the close. Trade 3 was a straight 3 point scalp. Trade 4 was a straight 2 point scalp. So, 4 trades. All profitable. A total of around 10 points captured counting the first trade. Points of interest: 1) Daily chart supported today 11-27-2019 (on a 5 minute chart) being a Small Pullback Bull Trend from the open. This is good for me in terms of utilizing averaging down techniques on PB’s OR holding a position all day and adding to it on PB’s then exiting near the close. I personally prefer exiting as the market gives me profits and entering again long on PB’s. For me that is just locking in profits. While the odds are lower that we could get a reversal from a SPBL trend (from the open)... but a trader should, IMO, realize that there is a 40% chance that such a reversal could happen. So, I prefer just jumping in and out paying more in commissions but locking in profits. It is just a personal preference. 2) The daily chart can be useful helping a trader decide the odds of what kind of day we are likely to have. The daily chart showed 32 bars staying above the 20 EMA...minor daily PB’s ....tight bull channel ...no exhaustive bull bars during these 32 bars....basically a SPBL (small PB Bull Trend) too but on the daily chart. These type of trends are actually some of the strongest trends albeit volatility may not be much. Just grinding up. Strong..strong. Usually PB’s are minor in these types of trends. Note the 4 bull bars in sequence just before today’s (27th) daily bar came into play. This too indicates a Higher close on todays bar by the end of the day than the close of the prev day i.e. the 26th. 3) Based upon the above concepts I was willing to trade on the opening bar and adding to my position by averaging down because the daily chart indicated a high probability of a higher close by the end of today price action (27th). So, I was not looking for a reversal but only a possible minor PB where I could add to my position. You may ask why not wait and go long as the PB ends and go all in instead of averaging down? I would reply “what if there is NO PB but price just rockets on up after the gap up open?” See, by taking an initial position I, at least, am in the game for some profits and if there is a PB (like there indeed was after the opening bar) then I just have an opportunity to buy more at a cheaper price and wait for the trend to resume.
in trends what you say is useful. However in ranges that is a horse of a different color hence I trade ranges differently and expect a smaller RR unless it is a broad range.