was a great idea for us folks.... its very possible we may see some choppy price action in the coming sessions............ My sense is were going up big, but they are going to make it damn hard to stay long.
Volume is never just volume. Volume is supply/demand. Every trade is counted as volume, of course, but what makes that trade. One person wants to sell their stock and someone wants to buy it. (This is very simplified) If the buyer really wants it they will offer to pay more then what it was selling for 30 seconds ago. If the seller really wants to get rid of it he will be willing to sell it for less then it was 30 seconds ago. This is what makes stock prices go up and down I'm am sure everyone here know this so lets move on. I think that this whole volume thing might have started as a response to my reply on page 3: I think that the ability to tape read would be of great benefit to a day trader who use S/R to enter trades. Now I am not an extremely proficient tape reader but all you really need is the basics. Tape reading is for day traders. Investors could care less about the small .30 cent moves up or down in their Microsoft or GE stock every day. But this is what day traders live on. The tape will show "heavy buying or heavy selling". When you have a lot of green on your tape (sorry if your tape has no colors) with a price that is moving up very quickly that is a indication that people are buying up the stock. They are willing to pay the new higher price. The same is true if your tape shows a lot of red (again sorry) with a price that is in a quick down fall. People are selling the sock. They are willing to sell it for less than the old price so the price keeps dropping. IMPORTANT: Don't over think this. You can spend your time over thinking everything else. Take what the tape is telling you. It is showing what the market (in general) is doing at that exact moment in that exact stock. If people are buying up the stock they can't hide from the tape. If they are selling the tape will show that too. Now back to the S/R discussion. You are sitting there watching your stock. It is approaching a resistance level. You think to yourself, "should I go short? I'm not sure. I will wait until it bounces off of the resistance level". Then the stock jumps above the resistance level. Now you think, "what, should I still short now? What if it goes higher? Is this going to be a new trend above the resistance level? Should I go long"? This is when the tape is a useful tool. If there is "heavy buying" before the resistance level, at the resistance level, and above the resistance level it could be a tell tell sign that the market is going higher in search of a new resistance level. If you saw this "heavy buying" and went long yourself at least you would have the market behind you for the trade. It should also be noted that these type of trades are usually short. The "heavy buying" will usually only last maybe 5 minutes to an hour or so. But if you can get in early at the start of that new trend you should be able to make some profit on the trade. This post is getting long. If anyone is interested on some more of my thoughts about how to play these types of trades let me know and I will post some more of my "opinions" NUTSNEAL, the tape I posted is from the Medved software. I am looking to start trading at a prop firm so I canceled my expensive data feed. My sister has a Datek account which I use as a data feed for Medved. Medved is very good software in my opinion. It is free to use and has many features. It does not work with IB (at the present time, soon to change) so I am unable to place my orders with it but I do use it for my charts, tape, and other real-time data. If you use one of the brokers they work with you can order right from the order box on the software. I would recommend anyone using Datek or RJT to check it out. There is also many other brokers it works with and free services it works with too. Check it out at http://www.quotetracker.com free to download and use. It will take some time to learn how to use all of the features but it will be time well spent. To get the tape you need to bring up a Raw Data window for the stocks you are watching. You can link the raw data and charts by clicking the thump tack in the upper right corner of the boxes. But I'm sure you will figure this out if you use the software. If you have any questions about the software feel free to ask, I'm good at using it. They also have good customer service. Later
Thanks everyone for your help and advice...there's some great material and 'food for thought' on this board. William...your guess is correct! I'm new to this and have just ceased trading to reassess my tactics. My trading was more random than anything and the few successes I had were more luck than judgement. From what you say it sounds like each individual "trade" that I download via RealTick represents both a Buy and a Sell. If I was to buy 1 contract at the same time as you sold 1 contract, only 1 trade would be reported through RealTick. Is this correct? Thanks again.
True,it is easier to spot chop [slop] after it happens. Here is a good thought,quote from my chart readers perspective. ''After a break of S/r ,trend could land you some good profit.Just a thought-ANCHOR''[5 minutes,5 hours] ____________________________ Also helpful stocks tend to pull back at certain numbers and % ,hints are in Yale Hirsch Stock Almanac, and multitude of charts. You 're pretty sure you are in a GOOD day trading trend when the stock pulls back little or less than usual. Let her run. Do like preplanned ,written price targets; h owever watch the bid price on candlecharts MORE.
You may be interested in viewing Money Flow in RealTick. It can be viewed in a MarketMinder as a column or in a Daily chart (Display Options | double click to show Money Flow). In a MarketMinder, right click and choose Column Layout Choices | Configure Column Layout. Click the More button and scroll down near the middle to find Money Flow. It is calculated as follows: When a trade occurs on the offer or higher, the market value of that trade (share size X price) is added to Money Flow When a trade occurs ont he bid or lower, the market value of that trade is subtracted from Money Flow. This should help determine the overall buying vs. selling pressure on the stock. I hope this helps.
DPSUTTS, Right. Say I bought 1000 shares of IBM, these shares would have to be bought from someone wishing to sell 1000 shares of IBM. (Or I could pick up 100 here and 900 there form two different sellers) Either way it's a business transaction (trade). If there I am buying 1000 shares from someone selling 1000 shares - 1000 shares would have changed hands, thus being reported to RealTick as 1000 shares. Look... this board can be great for new players like you. Ask questions like crazy, you have nothing to lose. If you really want to make it as a trader you will.
Choppy markets requires that you trade appropriate to the conditions. Hence, if its choppy, then your pattern will inevitably be towards very, very short term horizons and short trades, hence scalping. Scalping requires the lowest cost to carry in exchange for a lower breakeven cost. Obviously, you wouldn't engage in scalping (profitably and reliably) with commission costs of $9.95 and above, and consider doing this daily and many times during the day. When the markets smooth out and the wave patterns smooth out, then you can lengthen your carry without all the nervous worry and headaches. The recent market conditions were stabilized by the Billion Dollar purchases that began in Germany and carried into NYC for over 250 points on the Dow. We have seen the bottom, and might possibly see it again, however, in the mean time, these one direction markets (opposite of choppy) would allow one to buy and hold far longer than one would reasonably do in choppy market conditions.
They say the markets chop 85% of the time. So naturally, if you can figure out a way to trade a choppy market, you would have a trading opportunity 85% of the time. But I have never figured out a way to trade a choppy market. Besides, if you daytrade, you can make all the money you will ever need if you can just catch that trend which usually shows up everyday about 15% of the time.