Tuesday, November 13, 2007

Daily Summary


I had a short bias today in the morning. I kept thinking the market would reverse and go down for another dip so I did not look for any long setups. By the time I changed my mind it was tough to go long since everything I watch was up big. I did try to get into some of the fertilizer stocks in the afternoon but I took profits early, chased, and was shaken out by dips. Overall there was just a lot of chop for me since I lacked conviction on my trades.


Flatwallet said...

I great way for me to stay away from biases is to look at what the market is doing not in terms of price but in terms of the following internals:

$uvolQ - $dvolQ
$uvol - $dvol
$advQ - decnQ
$adv - decn

If you look at yesterdays internals, it was choppy until 1:30 and then at 1:45 it displayed bright red. Today it stayed green all day. BTW, I do a 5 min chart on them. Also try to place each up and down internals set on one chart. So you should have 4 charts. When you see separation and no more choppiness, then form a bias. Like today, I was looking long all day and waiting for a pull back on the strongest charts I could find. Just make sure your pull back is not more than a pullback.

If you combine this with the SPX, you will have a clear idea of where the indices are headed. Also this can help you stay away from choppy markets. However, this will force you to babysit at least one day a week. But heck you will be on the right side of the trade 4 times a week.

Also watch for the trends in these internals. Also tiny thing I learned was when the up & down meet...they tend to bounce and chop before they separate. I find this to reveal the truth 90% of the times vs. the SPY price only telling us the real truth about 60% of the time.

I'm sure you've used this before but let me know if you need any more help with it.

Flatwallet said...
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Flatwallet said...
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Flatwallet said...

Picture of Internals

Internals PNG

OBAT said...

Thanks for the tip. I do have the trin and $adv - dcn on my screens. I added the uvol - dvol.

I did not pay attention to the internals yesterday and that put me in the wrong side of the market.

Sometimes I find it hard to keep track of to many things, like the trin, adv-decn, uvol-dvol and combine them all to get a picture of the market. I am going to work on that and add them to my rule book.

Flatwallet said...

I don't look at the trin as much...cause that jumps all over the place...I think it's more for some one who is scalper. However if youa re looking for larger 2 - 5R moves...then you just need to have the general idea displayed by the uvol and adv etc...

About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.