Somebody asked how to identify trend days. http://www.barchart.com/chart.php?s...ddindicator=&submitted=1&fpage=&txtDate=#jump Have a look at TRIN. If you have an extreme reading Greater than 3 or less than 0.5 and it does not correct at the opening then you are likely looking at a trend day. For instance the first day in this chart shows serious selling at the open which does not correct. Interpretation: Program selling. The middle (or second day) shows a sinusoidal pattern within the extremes rotating about the axis of 1.0: Interpretation range day. Yesterday (last day on the chart) You had extreme selling which immediately corrected. Interpretation Fade the gap and a countertrend day at least to fill the gap. There are other ways to identify program trend days but this is an easy method.
Interesting. I extensively tested TRIN (with a bar chart feed) a few years ago, both with the precise rules as outlined in John Carter's Trade the Markets or whatever its called, as well as with various other rules that I created. In the end, i cancelled my bar chart subscription because TRIN was no better than a random distribution graph. Maybe i'll give your rules a look. Predicting trend days would indeed be the holy grail. I generally accept that nothing available (meaning advertised or distributed online or published in books) is profitable. That's not how the system works.
One possible exception might be a system so stupid as to defy usage. It's the clever stuff that sucks.
I don't have a set threshold, that is 2.5-3 for program selling and 0.5 for program buying. The key is the value coming to the baseline where a balance exists, which is 1.0. If the buying/selling doesn't "correct" to the mean then you might be looking at a trend day. There are other rules like the slope and direction is important not necessarily which side of 1.o you're on but Wednesday's action and associated $trin showed all the characteristics of a trend day. Premium can also shed light on these days as do support levels. If price is acting funny at support then again the players who support at support are no longer supportive of supporting the supporters. If you know what I mean.....
TRIN (The ARMS Index) kept me outta trouble insofar as my predisposition was to buy. But with TRIN rising-----the index is inverse to price---buying would have been a bad move. In fact once we were above 1.5 we were solidly into "trend Day territory given we never corrected back the the "balanced buying and selling" of 1.0 In the end it was a trend day down. VERY DIFFICULT to predict but this is a start. Cheers all.
http://www.barchart.com/chart.php?s...ddindicator=&submitted=1&fpage=&txtDate=#jump I suck at teaching. But if anyone is interested have a look at the TRIN charts at the Barchart URL. The key is direction, rotation about 1.0, and the magnitude of the buying or selling.
Do not ask me how it works or why but I suppose it's because it shows what the underlying trend for the day is. Like anything it is subject to failure and whipsaws but with a little filter you could trade off this chart alone just fine.