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Re: DOM games
Fulcrum,
Tell me what you think of this - perhaps ACV could be used for position entry and/or position exit strategies. What I mean is, you trade the way you do now (I like candlestick analysis) and when a trade appears, you check the DOM to see how the ACV looks. If it's in your favor, you take the trade and based on how much in your favor, you could position size off of that - something like 1 to 1 = regular size, 2 to 1 = double, etc. Or some function of that.
It's late and after my Browns had a heart breaking loss, I could be looking at this incorrectly, so let me know what you think since it appears you use this in your trading.
I'm thinking that this could add a quick and easy filter for me in terms of my current setup, just helping with entries and/or exits.
My only concern is how to implement this in real-time. For example, if I get a long at 10:00am, right at that moment do I check the ACV (which for me would simply be looking at the OEC dom, which does have the ability to total the bid/ask columns) and if it passes, great and if not, just wait or not trade it at all. I'm just trying to visualize how this works in real-time.
Another example with numbers:
I get a long with price at 1500.00.
Right at that moment, the ACV is even = bid/ask basically the same. Can go long at 1500.
30 seconds later, the ACV is now bullish, but price is 1500.50.
Do you now take the trade b/c the ACV is bullish or are you already in the trade b/c your entry already appeared and just feel good that the ACV is behind you?
And then once in the trade do you remain in the trade while the ACV is in your favor and if so, for how long? How often do you watch the ACV develop? In other words, if I am long at 1500.50 and the ACV is nice while price is rising and for a blip the ACV is not bullish, do you flatten or wait to see if it was temporary?
As you can tell, this has my interest as I've referred to the idea of price gravitating towards the heavier volume as the 'magnet' - price is like metal and the heavier volume is the magnet.
I guess it all sounds great in theory, but as you can tell, I'm trying to see how this would play out in real-time. I think I'll at least put the numbers up on my OEC dom tomorrow and just see how it looks.
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