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Hey...what about Volume?

  • #461
  • Jan 23, 2019 9:53am Jan 23, 2019 9:53am
Quoting EVolta
Hi Don, Thanks for replying/commenting. Here is my view about selling exhaustion which causing the the decent up movement. Not sure if it correct, please comment {image} i had yet to detect the buying exhaustion on the decent move, please enlighten me if you found already about the buying exhaustion. thanks
I have added some commentary to your chart and I think you will understand the thinking on this kind of analysis. You are pretty much seeing the order flow and I hope you are understanding it from that standpoint...not necessarily "technical analysis" but more "seeing" the price reaction to the buying and selling order flow.
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  1. Note how prior to this point, when price leveled off (most likely because the session ended) and selling resumed there was large selling follow-through as more and more sellers jumped on the "short train". But at the bottom (and this is what consistently marks a bottom), even though price went through the bottom with good volume...it then had no follow through and just pooped out. Nothing left for price to do but rise and try to attract more sellers.
  2. Rising prices do attract more selling and price reacts back to the lows...met with vigorous buying. Of more significance is that the buying pushed through the previous selling level and closed....then...
  3. Each time price moved back into that area buying quickly pushed price higher.

While its easy to say (1) price formed a double bottom with a (2) bullish engulfing bar and (3) previous resistance is now support. And all of that is true from a technical standpoint. Understanding WHY makes a huge difference and one (you) could have anticipated each of these areas by simply observing how price is reacting. Thus you could place an order VERY near the extreme low price, and be filled with your stop safely outside that zone. As well, add into your position each time price retests the buying area (or at least move your stop higher to lock in profit once price has moved away and made a new high.

Learning to "see" the order flow and anticipate price behavior allows you to enter with a very small exposure to risk, then manage your trade either adding in or locking in profits as the price continues to move your direction. Finally by now "switching modes" you can exit that trade at the best price possible, when you see the buying exhaust and order flow start to wind down from the buying exuberance. Just as it did with the selling. This will repeat over and over again, forming swing tops and swing bottoms, for you to take advantage of.

With practice you can find any market, and trade a swing from one point to another and know you have maximized your potential for that move.

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  • #462
  • Jan 23, 2019 10:02am Jan 23, 2019 10:02am
Quoting pipatronic
Hello Don, Have you read the book "Volume and pen Interest" by Kenneth H Shaleen ? It is one that I read some years ago, it was written some time ago - 1991, but its contents are still valid. Regards Pip
I have not read that book but thank you kindly for the recommendation...I will look it up and see what its about. I've been recently looking for additional lectures in my studies...I think I will find this a good addition to my library.
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  • #463
  • Edited 10:49am Jan 23, 2019 10:30am | Edited 10:49am
Looks like we're getting some good buying follow through on the selling exhaustion.
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While I did not enter on signal it does appear that entry would've produced good results.
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  • #464
  • Jan 28, 2019 9:53am Jan 28, 2019 9:53am
Did anyone get stopped out by this move? This is what I affectionately refer to as the F***You Stop.
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  • #465
  • Jan 31, 2019 3:56pm Jan 31, 2019 3:56pm
Hello Friends...I just wanted to point out to you how a "proper" hedge is done (for those of you who might be wondering). Contrary to what many advocate in "grid" trading or "range" trading. A proper hedge takes time and patience to develop and execute.
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Note how the current short trades were executed almost two months ago and had to slog through 7 weeks of ranging and back and forth....SEVEN WEEKS. Once price went positive it limited out the first two positions (1/2 of total) quickly. Now that a selling exhaustion signal is read, I have moved the stop on the shorts to lock in profit and entered long positions to profit from any upward move. This current charts the rare but achievable position to be in no matter how you trade.

Note here that no matter what happens this position WILL NOT LOSE!

  1. If price rises, the longs will gain, and stop out the short in profit
  2. If price falls, the shorts continue and stop out the long position at a small loss, but what has already been take is more than enough to cover that and stay profitable...as well there is the continuous gain of the current shorts from the top of the market in December
  3. If price continues in range I will hold the hedge and gain no matter which side it breaks.

Who knows how long this range will continue, but it doesn't matter...price will break sooner or later and when it does I will gain one way or another.

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  • #466
  • Jan 31, 2019 5:31pm Jan 31, 2019 5:31pm
Quoting DonPato
Hello Friends...I just wanted to point out to you how a "proper" hedge is done (for those of you who might be wondering). Contrary to what many advocate in "grid" trading or "range" trading. A proper hedge takes time and patience to develop and execute.
You hedgers live in denial, you make a post saying that you are hedged and if the prices go up you dont lose, if it goes down you dont lose and if it ranges you dont lose either. Since that having hedge positions is the same as having no positions (your position is flat and your equity is locked) whats the point of this posts?
Its the same as me making a post and saying hey guys i have no positions open so
1 if prices go up i lose nothing
2 if prices go down well guess what i also lose nothing
3 if price ranges i lose nothing again
Its just stupid
  • #467
  • Jan 31, 2019 7:49pm Jan 31, 2019 7:49pm
Quoting DonPato
Hello Friends...I just wanted to point out to you how a "proper" hedge is done (for those of you who might be wondering). Contrary to what many advocate in "grid" trading or "range" trading.
Hi Don,

I partly agree with what STrading said below your post. Your hedge is only meaningful if you put that long hedge on and off buying low and sell highs within that range. Is that what you will do ? Can you clarify on that ?
  • #468
  • Jan 31, 2019 7:58pm Jan 31, 2019 7:58pm
Quoting STrading
...Its the same as me making a post and saying hey guys i have no positions open so 1 if prices go up i lose nothing 2 if prices go down well guess what i also lose nothing 3 if price ranges i lose nothing again Its just stupid
Not the same...you clearly didn't look at the chart I posted...the hedge is NOT an equal hedge, but that fact aside, you really don't know what "stupid" is...

So let me clear this up for you...

  1. Price moves higher...I book 350 pips on one position (plus the 300+ pips on two other positions) on shorts with one short still left running at break even. This is in ADDITION to any profit realized on the ensuing long position which has a take profit set at 350 pips.
  2. Price moves lower...I lose 100 pips (on two positions) but still have two short positions running at 500+. Thus the 200 pips (100x2) less the 700 pips (350x2) is still a net gain of 500 pips...with another TWO positions running at 500+ pips (where ever that ends up being).
  3. Price stays in range...hold everything with a 700 pip gain on shorts, 1000 open short gain, and small (50 pip gain)longs.

I'm not sure where you see it but its definitely NOT stupid. What seems stupid is commenting on someone's thread without really knowing what you're talking about or worse, assuming you do when its clear you do not.

But thanks for trolling, we welcome all comments here no matter how uninformed.

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  • #469
  • Jan 31, 2019 8:03pm Jan 31, 2019 8:03pm
Quoting pooh123
{quote} Hi Don, I partly agree with what STrading said below your post. Your hedge is only meaningful if you put that long hedge on and off buying low and sell highs within that range. Is that what you will do ? Can you clarify on that ?
The entire point of the hedge is WHERE the opposing position comes on...Top and bottom of a very large range. Then you make money on both sides. Could one just "stop and reverse" at the high or low of a range, yes...but if you are incorrect and the bottoms (or top) does NOT hold, you have a position with the best entry possible and have made significant amounts of gain on the area in between high and low. To see the range that I am trading take a look at the monthly chart.
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  • #470
  • Jan 31, 2019 8:17pm Jan 31, 2019 8:17pm
Quoting DonPato
{quote} Not the same...you clearly didn't look at the chart I posted...the hedge is NOT an equal hedge, but that fact aside, you really don't know what "stupid" is...
First what i see on your chart is two 0.02 sell position and two 0.02 buy position.
Second what happens if price go up you close sells and the price reverses or it goes down you close the longs and price reverses.
  • #471
  • Jan 31, 2019 8:28pm Jan 31, 2019 8:28pm
Quoting STrading
{quote} First what i see on your chart is two 0.02 sell position and two 0.02 buy position. Second what happens if price go up you close sells and the price reverses or it goes down you close the longs and price reverses.
The lower of those two sell positions stops out at 350 pips...the higher short keeps running....and this allows me the chance to bring the longs to break even. Assuming these too are stopped out (which happens all the time)...I end up with

  1. 350 pips x2 on original (and now closed) shorts
  2. 350+ pips on latest short stopped out with the longs
  3. zero on the longs AND
  4. A small short position still running which may or may not stop out at somewhere between zero and 300 pips profit.
  5. Total = 700+350+300+0...1,350 pips

Any other scenario will most likely produce more. Again I have yet to find a LOSING scenario in this situation and it has taken me 3 months of stalking and patience to develop it. However if you consider worst case scenario...listed above that is right around 450 pips per month...not bad for looking a charts once a day and mostly just sitting on your hands while price does its thing. Further...this is just on of 11 markets I look at and trade.

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  • #472
  • Jan 31, 2019 8:42pm Jan 31, 2019 8:42pm
Quoting DonPato
{quote} The lower of those two sell positions stops out at 350 pips...the higher short keeps running....and this allows me the chance to bring the longs to break even. Assuming these too are stopped out (which happens all the time)...I end up with 350 pips x2 on original (and now closed) shorts 350+ pips on latest short stopped out with the longs zero on the longs AND A small short position still running which may or may not stop out at somewhere between zero and 300 pips profit. Total = 700+350+300+0...1,350 pips Any other scenario will most likely...
So now you are fully hedged right? 0.04 sell and 0.04 buy
You say total 1.350 pips but if you closed the two sells where you bought how many pips would you got with the other close ones? it seems it would give more than 1.350 pips?
  • #473
  • Jan 31, 2019 8:53pm Jan 31, 2019 8:53pm
Quoting STrading
{quote} So now you are fully hedged right? 0.04 sell and 0.04 buy You say total 1.350 pips but if you closed the two sells where you bought how many pips would you got with the other close ones? it seems it would give more than 1.350 pips?
Yes that is correct it would be more now if I closed everything... however there is no longer any impetus to do that because again I now have the luxury of just seeing what WILL happen and no matter what I win. This is literally a "risk free" trade. I have no idea if price will move higher or lower or hit both sides then continue...

I just don't need to worry about it anymore. It is profitable... significantly so...no matter what happens. It is undeniable.
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  • #474
  • Jan 31, 2019 9:15pm Jan 31, 2019 9:15pm
Quoting DonPato
{quote} Yes that is correct it would be more now if I closed everything... however there is no longer any impetus to do that because again I now have the luxury of just seeing what WILL happen and no matter what I win. This is literally a "risk free" trade. I have no idea if price will move higher or lower or hit both sides then continue... I just don't need to worry about it anymore. It is profitable... significantly so...no matter what happens. It is undeniable.
This is where you are wrong, if you closed the sells instead of hedging you would have the luxury of being flat (out of the market and not paying commissions) and seeing what would happen. you are not in a risk free trade you are out of the market your equity is locked.
I have no problem with people hedging but common dont come here and say that you will profit if the market goes up or down, you can only profit in this market if you are net long and price goes up or net short and price goes down, it is impossible to make profits being net flat
  • #475
  • Jan 31, 2019 10:10pm Jan 31, 2019 10:10pm
Quoting STrading
{quote} This is where you are wrong, if you closed the sells instead of hedging you would have the luxury of being flat (out of the market and not paying commissions) and seeing what would happen. you are not in a risk free trade you are out of the market your equity is locked. I have no problem with people hedging but common dont come here and say that you will profit if the market goes up or down, you can only profit in this market if you are net long and price goes up or net short and price goes down, it is impossible to make profits being net...
I'm wrong AND I'm stupid... WOW I'm batting 1000 tonight. Let's see... I've just shown how I've made money already...how that profit will only get bigger in any scenario you choose to see...yet by your own review I am"flat" and it's "impossible" to make profits.

Did I miss anything?...oh yeah perhaps you missed this... I make MORE money than I have now no matter what happens... albeit impossible.
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  • #476
  • Feb 1, 2019 8:44am Feb 1, 2019 8:44am
Quoting DonPato
{quote} I'm wrong AND I'm stupid... WOW I'm batting 1000 tonight. Let's see... I've just shown how I've made money already...how that profit will only get bigger in any scenario you choose to see...yet by your own review I am"flat" and it's "impossible" to make profits. Did I miss anything?...oh yeah perhaps you missed this... I make MORE money than I have now no matter what happens... albeit impossible.
I already asked you if your current positions are a 0.04 sell and a 0.04 buy (this is what it looks to me). if the positions are equaly hedged it is impossible for you to make more money.
  • #477
  • Feb 1, 2019 9:20am Feb 1, 2019 9:20am
Quoting VEEFX
{quote} Hey Don, I came here because brother Nik liked your post and it is has been a while since we last exchanged notes :-) I have not read the ongoing discussion so without getting into your specific trade scenario that is being discussed... could you please confirm this for me in principle? Just a true/false response is good enough for me to understand where you stand on this issue. Perhaps STrading could also participate and turn this discussion around for us. You will always lose money if you hedge your floating losses. True or False? You...
There is no advantage in hedging, in fact it costs more to hedge. But some people prefer to do it and for me thats fine, it might help them keep track of their trades or for whatever reason it is. And the problem for me is not that people decide to hedge, the problem is that most times they decide to make their posts prettier saying thing like "Note here that no matter what happens this position WILL NOT LOSE", "resulting "hedge" has a positive outcome no matter what happens" this is false. Most times Hedgers are looking at their balance and not their equity witch is their real balance. If you make a trade and it goes 1000 pip in your favor, you can say now that if it goes up 300 pips you still make 700 pips and wont lose money, but the fact is that you lost 300 pips because if you closed that trade when it was 1000 pips at one point you would made more
  • #478
  • Feb 1, 2019 9:24am Feb 1, 2019 9:24am
Quoting STrading
{quote} I already asked you if your current positions are a 0.04 sell and a 0.04 buy (this is what it looks to me). if the positions are equaly hedged it is impossible for you to make more money.
OK...this has just become sophomoric and pedantic. I've shown you with live charts on the right hand edge how this trade has worked and is still working but you seem too stuborn to even admit that it might work. So I will not further argue with you just to hear your gainsaying. I have yet for YOU to show ME with a live actually in the market trade on the right hand edge anything to prove your point, and will no longer listen to your moronic brinkmanship. Nothing is "impossible" in this market and I have to my credit shown you an actual trade that proves your point to be wrong.

Thanks again for bringing a negative and highly unproductive section to this thread...TROLL
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  • #479
  • Feb 1, 2019 9:28am Feb 1, 2019 9:28am
Quoting DonPato
{quote} OK...this has just become sophomoric and pedantic. I've shown you with live charts on the right hand edge how this trade has worked and is still working but you seem too stuborn to even admit that it might work. So I will not further argue with you just to hear your gainsaying. I have yet for YOU to show ME with a live actually in the market trade on the right hand edge anything to prove your point, and will no longer listen to your moronic brinkmanship. Nothing is "impossible" in this market and I have to my credit shown you an actual trade...
i have made a simple question are you fully hedged or not? is your current position two 0.02 sell and two 0.02 buy
  • #480
  • Feb 1, 2019 9:58am Feb 1, 2019 9:58am
Quoting VEEFX
Thanks but I am only looking for a true/false response. I have my own beliefs and did not come here to take sides or discuss :-)
Ok in this case

  1. You will always lose money if you hedge your floating losses. True or False? true ( im taking lose money as trading costs)
  2. You will always win money if you hedge your floating profits. True or False? false
  3. You can never turn a losing hedge into a profitable position by hedging the hedges. True or False? false
  4. You can never turn a winning hedge into a losing position by hedging the hedges. True or False? false
  5. There is no edge in hedging losses using same pair/instrument. True or False true
  6. There is a significant edge in hedging your profits using same pair/instrument. True or False? false
  7. Scenario #6 is only true if SL of each leg of your hedge is moved to BE in order for edge to exist. True or False? false

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