Monday, January 01, 2007


My futures strategy is almost in place I think. The strategy is based on finding S/R areas and looking for breakouts based on block trades. I will give the trade 3min to workout with a 0.70 stop on ER2.I find S/R areas by using volume at price analysis, similiar to market profile.

Here is a great article on market profile- SFO market profile article

I should be able to trade without a chart, and just use the tape. Volume and price tell all. I put very little value in time at price at all, and that is why I trade with range charts on futures now. It is of no coincidence that periods of low volume also show little price movement but often show long periods of time, which is of only benefit to option premium sellers.

Here is some volume analysis I stole:
Listen to What Volume Tells You!

There are 6 simple rules to learn in order to interpret price and volume movements:

1. Increasing volume on increasing price signals an acceleration in buying pressure and price advance.

2. Increasing volume on decreasing price signals an acceleration in selling pressure and price decrease.

3. Decreasing volume on increasing price indicates an easing in buying pressure and a leveling in price or price reversal.

4. Decreasing volume on decreasing price indicates an easing in selling pressure and a leveling in price or price reversal.

5. Higher than normal volume at price highs indicates selling into strength and a price ceiling.

6. Higher than normal volume at price lows indicates buying on weakness and price support.



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