Monday, February 17, 2020

Info!! Coaching Your Trading: Twitter, Determination Support, As Well As Trading Reviews

a recent post, I proposed the afterward activity review equally a useful tool for coaching traders. If nosotros were to comport a review of yesterday's trading, 1 of import focus would hold upwards how traders traded the early on forenoon part of the session.

Let's accept a await at a few of the Twitter posts from that AM:

6:26 AM CT- Note 3 24-hour interval hit inwards ES; SPY targets: pin = 68.49; R1 = 70.55; R2 = 71.24; R3 = 71.93; S1 = 66.42; S2 = 65.73; S3 = 65.04.

8:42 AM CT - Watching TICK, financials to encounter if nosotros sustain motility inwards a higher house yesterday high inwards ES for R1 target or if nosotros revert to pivot.

8:53 AM CT - We hitting R1, equally TICK has stayed quite positive on whatever pullbacks. Need *significant* selling (neg TICK) to upshot a reversal.

The offset "tweet" emphasized the context of morning's trade: nosotros were inwards a three-day range. Right away, you lot desire to entertain 2 hypotheses if nosotros encounter early on buying: whatever marketplace forcefulness volition popular off out too we'll revert to the hateful of the range; or buying volition attract farther involvement too we'll sustain a breakout from the range.

This is where the targets are rattling helpful. Influenza A virus subtype H5N1 reversion into the range, gives us a cost target at the marketplace pivot. An upside intermission out of that hit targets the R1, R2, too R3 cost levels. What nosotros require to produce inwards the market's opening minutes is handicap the odds of 1 of those moves if nosotros opened upwards close the superlative of the range.

By the 2d Twitter post above, we've already broken inwards a higher house the range. The post tells us that fiscal stocks are leading the accuse (that has been a leading sector inwards recent sessions) too that NYSE TICK is telephone substitution to sustaining the breakout. After all, if the breakout is genuine, nosotros should encounter many to a greater extent than stocks transacting on upticks than downticks.

By 8:53 AM, we've already hitting R1, equally TICK has stayed quite positive. The Twitter post observes that nosotros require to encounter *significant* selling to contrary this powerful breakout move. Recall from previous inquiry on the weblog that TICK readings are non meaning unless they plow over +800 or autumn below -800. To that point, nosotros didn't fifty-fifty acquire a unmarried -500 reading.

Let's straight off add together a few other items to the mix that tin assist you lot position upside breakout days. The dark-green line of piece of work is a 20-period VWAP line; discovery that volume-weighted average cost is rising too the ES futures are soaring inwards early on merchandise inwards a higher house their line. That is a sign of a trending move: cost stays inwards a higher house VWAP too VWAP is rising.

Second, discovery that the marketplace opened amongst several big dark-green bars: cost was moving (high volatility) too cost was moving higher. This is the essence of the Power Measure that I described inwards the previous post. When directionality too volatility are inwards sync, nosotros withdraw keep a trending move.

Finally, Federal Reserve annotation the expanded book on the rise. Indeed, the book inwards the offset 3 v infinitesimal periods of the ES futures was nigh 200,000 contracts, some the average book (243,447) for the typical opening *30* infinitesimal period. (Relative book norms are posted inwards my weekly indicator reviews).

Now, here's the of import psychological part. Many traders who don't merchandise the initial breakout motility volition fret that they missed the motility too volition convince themselves that they don't desire to "chase the market". So they sit down in that location amongst a sure business office of their anatomy inwards their hands too spotter the marketplace proceed higher.

Two problems amongst that sort of thinking: First, it is backward looking. Instead of focusing on a motility that you lot *didn't* trade, you lot desire to hold upwards looking for where the side yesteryear side merchandise would hold upwards coming from. That is what those cost targets from the offset Twitter post inwards a higher house are for: if you lot immature adult woman the intermission inwards a higher house the previous day's high, hence you lot hold back for a pullback inwards TICK too play for a motility to R1. If you lot immature adult woman the motility to R1, you lot hold back for a pullback inwards TICK too become for R2. As long equally volume, volatility, too TICK are on your side, you lot desire to merchandise amongst the trend.

Which gets us to the 2d occupation amongst the "I don't desire to chase" run a jeopardy aversion: it fails to position what is happening inwards the marketplace. In a hit market, you lot for sure don't desire to merchandise momentum too purchase forcefulness or sell weakness. But if you lot withdraw keep transitioned to a trending market, you lot desire to ride forcefulness or weakness. The trader who doesn't desire to chase is locked inwards the previous, hit leap mindset. The whole run of looking at indicators such equally volume, volatility, TICK, ranges, too targets is to update your thinking hence that you lot tin revise your trading tactics.

I believe this illustrates some of the coaching potential of the Twitter application: existent fourth dimension marketplace observations assistance conclusion support. On days inwards which I'm non on the route working amongst traders too portfolio managers, I volition usage Twitter to assist you lot (and me) frame trading ideas too hypotheses. (Subscription to Twitter feed is gratuitous via RSS). Then, afterward the forenoon or day's trading, you lot tin comport an afterward activity review to encounter what you lot caught too what you lot missed. Such a process, 24-hour interval afterward day, is what tin accelerate a learning bend too plow marketplace hindsight into foresight.
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