Info!! Thoughts Nearly Tendency Days, Transitions, In Addition To Reversals

past posts, i of the key tasks of the intraday stock index trader is to identify, equally early on equally possible inward the trading day, when we're facing a trend day versus a range day. What makes this chore peculiarly challenging is that make days tin plow into tendency days (breakout trades) as well as tendency days tin morph into make ones (reversal trades).

One of the tells nosotros oft encounter when tendency days revert to ranges is the erstwhile transition pattern. Note how nosotros made a momentum high (solid upside volume) inward the ES futures earlier eleven AM CT, as well as then saw an extended dip, followed yesteryear a marginal novel toll high approximately 12 Noon CT. That 2nd toll high saw lower volume, lower book lifting offers, as well as was non confirmed yesteryear the NQ futures as well as yesteryear the XLE as well as XLB sectors.

Off that weaker high, sellers were emboldened as well as nosotros retraced a expert constituent of the day's gain earlier bouncing belatedly inward the session as well as closing within the morning time range.

That transition sequence is i that shows upward across multiple timeframes.

I encounter that Henry Carstens has been tweeting his trend indicator, non solely for the S&P 500 Index, exactly too for ix S&P 500 sectors. Interestingly, when the marketplace was topping out today, solely four of the nine sectors were showing tendency readings greater than 60%. That suggested that the rally may non bring been equally vigorous equally it initially appeared. It volition locomote tracking the sector tendency readings equally good equally the overall reading for the index to encounter if the indicator provides an border inward distinguishing reversal days from trending ones.
.

Info!! Distinguishing Tendency Days From Arrive At Saltation Days

If you lot click on the Market Delta nautical chart above, you'll become a unique persuasion of today's activity inwards the S&P 500 emini futures market.

The histogram at left shows the total book transacted at each cost traded during the day, amongst the book divided yesteryear the amount transacted at the marketplace offering cost (green) too the amount transacted at the marketplace bid cost (red). The numbers to the immediate correct of cost on the left vertical axis correspond the divergence betwixt book transacted at offering too bid at each cost point.

What you lot tin come across is that it is a really mixed picture, amongst exclusively 9803 to a greater extent than contracts transacted at the marketplace offering than bid over the course of written report of the entire session. Some prices demonstrate to a greater extent than book at offering than bid; other prices display to a greater extent than book at bid than offer. This relatively fifty-fifty distribution of book across bid too offering is typical of arrive at saltation trading sessions. The quicker a trader tin recognize this evenness, the to a greater extent than able he or she is to fade moves at arrive at extremes rather than become caught chasing breakout moves that never materialize.

A minute clue of the arrive at saltation 24-hour interval is the shape of the book histogram at right: a shape nosotros recognize from Market Profile theory. Note how the shape forms a relatively normal distribution, amongst the bulk of book transacted at the middle too far less at the cost extremes. That tells us that higher too lower prices were non attracting participation. This drying upward of book away from the central, value expanse is what keeps markets inwards trading ranges.

Also notice the half-hourly distributions of volume. These demonstrate how book traded at the marketplace offering vs. bid for each half-hour during the trading day, amongst the "point of control"--the cost at which greatest book was transacted--outlined. We tin come across that at that topographic point is no tendency to these half-hourly points of control. Indeed, the inability of the marketplace to motion value inwards a higher house the 1260 expanse early on inwards the 24-hour interval provided a prissy fade merchandise toward the other halt of the range.

Finally, authorities notation the book histogram bars at the lower horizontal axis. These equally good are colouring coded based upon whether to a greater extent than book during the menses was transacted at the marketplace offering (green) or bid (red). We tin come across how book dwindled through much of the day, specially during the periods inwards which the marketplace tested arrive at extremes. This failure to attract participation during the 24-hour interval is equally good feature of arrive at markets.

Thursday gave us a nifty trending market; Fri gave us a trading range. In a trending market, you'll play ranges for breakouts inwards the administration of the trend. In a arrive at market, you'll tend to fade breakout attempts. One manner assumes continuation; the other reversal. Making the read of trending marketplace or arrive at marketplace early on inwards the 24-hour interval tin brand all the divergence inwards trading success. Observing unfolding cost too book distributions tin render useful clues inwards making that call.
.

Info!! Trading As Well As Marketplace Psychology: The Best Of 2008 - Book Three

Here nosotros accept the best of the posts from the 3rd quarter of 2008. Archives tin travel live on constitute for the first ii quarters of 2008; 2007; in addition to 2006 via the Trading Coach weblog site.

The Psychology of Profitability

The Idiot Wave

Consistent Returns With Small Edges

Adapting to Shifts inward Market Regimes

The "Should Have" Syndrome

Distinguishing Trend in addition to Range Days

False Breakouts in addition to Reversals

Trading Success in addition to Teamwork

Where to Place Stops

Position Sizing in addition to Risk Management

Avoiding Overtrading

Trading Stress in addition to Emotion

Mindful in addition to Mindless Trading

Greatness inward Life in addition to Trading

Market Communications in addition to Metacommunications

Implicit Learning in addition to Detachment

Implicit Learning in addition to Trading Performance

A Common Coaching Error

The Psychology of Mechanical Trading

Behavioral Finance in addition to Trading

Personality Traits in addition to Trading Success

Risk Taking in addition to Personality

Market Gamblers in addition to Entrepreneurs

Trading in addition to Regret

.