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ADX is an indicator which shows the strength of a trend (or lack of). Using its standard setting of a 14-bar lookback (for example), an ADX level below about 20 would mean price has been moving more or less sideways. An ADX level above 30 or so means recent price has been trending. One of my techniques is to watch when ADX comes from a low level and starts to go up, that usually indicates price is breakout out from a trendless mode into a trend. I go in direction of the price breakout (or after a small retracement and that trend continues), usually good for a few points or more. (ES is $50 a point.) So I avoid entering into a trade when ADX is low or is dropping, that coupled with certain times of day when we all expect lack of price movement, gives me certain situations when not to trade.
I don't use time and sales as that is too fast for me.
I don't use market profile as that is too slow for me.
This is what I feel about the concept of "stop trading when a daily profit goal is reached" -- Let's ignore the attention span, being tired and distraction conditions for now. I think the expectancy of profit of my next trade hinges on my ability of reading the price action that's coming up (or not coming up), and the expected market motion action (e.g. breaking out from a congestion into a trend) is what will provide me profitable trades. Whether or not my previous trades so far for the day have cumulatively reached an arbitrary $ limit amount does not have that much correlation to the success of my next trade, for my way of trades. Your way may be different. Good luck and good trading to you.
~ Bill
Can you help answer these questions from other members on NexusFi?
Key point is to measure with maths and visualize data firstly . then we need to test and validate any clear visual patterns . Some decent coding skills required , paramount skill required . Need to make it objective . This is part of my set of ASX indice explorations . Few years of hardcore learning / research to get the skillset needed . there are literally a 100 things you can measure to define best intra times / days to trade , places that market rotates to on a regular basis . Patterns that suggest the next 2 hours / days bias . There is no end to the unique edges you can find . Most of my best edges ive not seen else where .
Just a couple things marked on chart here , total cash range overlaid on price with closing gaps and weekly cash close . Range in first 90 minutes and total cash range , individual bar size , volatility on 2 time frames . momentum on 2 time frames , x period highs and lows etc etc . monday and fridays are highlighted in colour
That sentence right there is a fundamental truth that traders need too understand. Edges come and go in perpetuity. It is your job as a trader to not only be aware of this constant change, but to capitalise on it for as long as it exists. Stats is easy but time consuming.
With time &sales, I look at it for confirmation when price hits a level I'm watching. The pace of the tape, is it crawling or speeding up. Is it pausing. High volume or sweeps with volume. I trade a thinner market so a little market order volume can move price substantially.
With time and sales I look for reoccurring bursts in market orders at specific points. Really small patterns to pick up on which reveal the bias I want to form. I get an audible alert so I dont have to glue my eyes to the tape. Ideally I like to be in my trade before the volume is spotted.
Watching time and sales will not be a dead give away. Some days it's not as useful. Other days I will catch a pattern or see a large transaction at a level I want to trade and then it just clicks.
But still not the holy grail at all.
For example, today, I was long prior to the end of the day run up on Mini DOW (I was long way too early on, but small position). Price was sitting below the VWAP. Some larger traders/institutions will have an execution algo that buys if price is below the VWAP. Today happened to be that day. Around 1pm I had an alert for good buying volume on the tape...we aren't talking MASSIVE...but 46 contracts (as a single block, and several other blocks of 20-30), plus steady buy volume of randomized size pushing price above the VWAP. There are plenty of times this won't work, but since I was already long a small position, I just wanted to watch for confirmation. The buy volume on the tape was steady after that point and I had plenty of alerts for buy market volume.
So you use time & sales with plenty of context, definitely.
And I wasn't in love with this setup so I didn't get aggressive and add to it as I sometimes do.