[email]

Originally Posted by mister ed »

Hi email, I don't think this is the right thread to be asking about bid/ask volume, so far at least it hasn't been a topic for discussion here. I will have a go at addressing your question but if posters on this thread prefer we can move the topic to a more appropriate thread OK?

Firstly, can I ask what instrument you are trading that is showing this behaviour, and what software platform and data feed you are using? Sometimes the data feed especially can provide suspect information. This is a starting point for looking at your question.

Hi mister ed,

Many thanks for your reply; I use sierra charts with transact futures and also recently started using tradestation 8, I am slowly getting familiar with tradestation so to make the switch.
Cheers,
email

[DbPhoenix]

Originally Posted by zeon »

Hmm, not a bad way to trade I guess. In the past I used to think that trading was about making 10-20 trades per day minimum. After all, you read these posts from other traders who say they had "a very busy" day. But you seem to be on the opposite of the spectrum. Whatever makes money, I suppose. I can see the benefits of trading less though, less stress and more time for something else.

Meanwhile, while we were all looking down, the market rallied us back into yesterday's territory. Isn't that significant? It looks like some sort of false breach of support now. In other words, I'm confused.

Do you have a setup?

[zeon]

Originally Posted by DbPhoenix »

Do you have a setup?

If by setup you mean a strategy, then yes. But I can only put it into motion when the market acts according to my scenarios. And sometimes it does, but a lot of the time it doesn't and then I need to re-think how I'm going to approach the market. Mainly I'm looking to sell resistance levels when price has failed to break through and is coming off. I like to see "shooting stars" at resistance, I know this whole concept of representing bars isn't correct because price is a continuous flow, but I'm not yet capable of identifying the dynamics behind a shooting star in real time. I tend to short on other bars too though. For example when I see an upbar on huge volume, followed by a downbar on very little volume in comparison to the previous one, it usually means price will start falling.

Hope all of this does not sound too ridiculous... it's been working okay for the last couple of months. I have other things which I pay attention to, especially patterns like triangles that I read about in Bulkowski's Encyclopaedia of Chart Patterns.

[DbPhoenix]

Originally Posted by zeon »

If by setup you mean a strategy, then yes.

Not exactly.

From "The Trading Journal" post to my Blog:

Therefore, focus on the setup. One setup. Determine its characteristics, find the markers of buying and selling interest, buying and selling pressure, buying and selling exhaustion. Define it so specifically and so thoroughly that you can recognize it without any doubt whatsoever in real time. Decide provisionally where best to enter, what the target ought to be, where the stop should be placed, and so on. Only after the setup is defined and tested (and it can't, ipso facto, be tested until it's been defined) can one even begin to think about trading it with real money, much less trading multiple setups. Attempting to shortcut this process merely expands the amount of time it will take to develop the necessary skills. Nothing is gained by painting the house before scraping it, cleaning it, and priming it since you'll have to do it all over again sooner rather than later.



The strategy is developed after you've defined and tested the setup. Otherwise, you're more likely trading via feelings.

[zeon]

Originally Posted by DbPhoenix »

The strategy is developed after you've defined and tested the setup. Otherwise, you're more likely trading via feelings.

I believe the description I gave about the setup tells is quite clear about what it is I'm looking for. The problem is, sometimes it doesn't occur whole day. Then I sit there for 6 hours in front of the screen while I have nothing to do. Your mind tends to drift and you want to put a trade on for the sake of it. But I know the exact pattern I want to see and when it does occur it often yields good profits. It's just that I feel I should be doing more instead. How do you manage to take a trade so early in the day? Sometimes the pattern I'm looking for occurs in the first 30 minutes, sometimes in the final 30 minutes. Sitting on your hands all that time can be a hard thing to do.

I've attached an example of today, I shorted twice. First one got stopped out, second one I am still holding as we speak. Second short was better as the volume on the following bar was significantly less in comparison to the "shooting star".

[DbPhoenix]

So why trade any further?

[zeon]

Originally Posted by DbPhoenix »

So why trade any further?

I won't after I have closed my second trade. Today I am lucky though, having two trades so early. But these days are rather rare... and like I said, my first trade was a loss, so need this to be a winner, big enough to make up for the loss.

There's no knowing if I'll have a trade soon or later each day, or even have a trade at all. I find it very hard to do nothing for hours to be honest. I'm wondering how other people do. As I am trading of 3-minute charts most of the time (or 5-minute) I can't really keep my eye of the screen for very long or I might miss a bar.

Edit: just closed my 2nd trade for 8 points.

[DbPhoenix]

If you're trading shooting stars off resistance, there's no need to do anything until price nears resistance. Set an alarm.