Here’s another example of my split-out volumes indicator. I wanted to show you the examples from my actual trades, but Tradestation crashed on me when I tried to share my screen in the eotpro live room today. TS and acrobat don’t seem to jive well ever since I installed the global variables package. And, since this is a real-time only indicator, I can’t restart TS and get the same charts back that I was looking at. Oh well!
Anyway… check this scalping chart out (if you don’t know how to read this, check out yesterday’s post on the volume splatter indicator.
The place to sell is the first vertical line. The place to cover is the second vertical line.
I’ve noticed again and again that the big traders get out of the trade first, and the price usually doesn’t run too far away for a few bars. You get plenty of time to get out, before the small and medium traders catch on. It’s kinda nice.
You sell short because volume from large trades is growing and heading straight down, while we are bouncing down from the rolling VWAP. Note that on a 2584 share bar chart, I’d probably wait until the small and medium traders started selling too, but on the scalping chart I’m now leaning towards not waiting. But, that brings up an important point: YET AGAIN the small and medium traders are on the wrong side of this trade at first. Always caught off guard, they are!
Then, look, for the entire trade between the two vertical lines, the large trading pressure stays on… as I described in the live room today, there is a nice space between the zero line and the large trade pressure. So, heavy selling pressure stays on, and there are plenty of large dots, indicating spikes in volume as well.
Note that the medium and small traders start covering about a point too early, and the medium traders even get net long before the drop ends! Then, they both get net short again a couple bars after my designated exit. I think this is part of the reason for the big spike from the small and medium traders at 13:01… those way-too-late shorts have to cover and reverse.
It’s like a comedy watching how wrong-headed the small trades are.
Now, if you don’t mind a little advertisement, I’ll point out that if this indicator continues to look so awesome, it will be part of the eotpro elite series in a couple weeks. And, the only way you’re going to get it is by signing up as an elite series subscriber. If you haven’t checked it out, you really should… we have tons of interesting and useful indicators for your trading arsenal.
July 17th, 2008 at 12:44 pm
Check out 4ish bars after your second line.
The bars are red, however is the story of the Large Splatter telling you that there’s a fake out (reversal?)when the Small and Medium are goign down (with small dots) going Long?
It’s almost like a surge in wave.
anywho Im rambling, these indicators are shiny.
On perspective, what if you made the Large splatters the Zero line, and plotted the Medium and Short in relation to the Large folks. Yea Im a nut about stuff like this but it might help you condense it down a bit. Then again I suspect you’ll have an indicator brewing in the mix sometime around Thanksgiving. ;)
Good Work!
E.