Catching the price movement

[stargazer]

Hi all

Have seen reference to Price movement and Volume as being as one of the ways to trade.

I have at times looked at this and seen say a stock XYZ open at at 0.50c and good volume and rise to 0.53c only for the price to come down at close to 48c.

So how or what do you use to catch a price movement on the up and with momentum to make a realistic return.

Cheers
SG

 

[Mr J]

This is no different than asking how to trade. Capturing price movement is how one profits in a market. There's no easy way to answer this question, at least not by me.

I have at times looked at this and seen say a stock XYZ open at at 0.50c and good volume and rise to 0.53c only for the price to come down at close to 48c.

From my limited experience I would say that is not tradable as the stock is too cheap in terms of price. For a stock that cheap, each move is worth 1 cent, meaning there were only 5 levels of price. A trader rarely captures the entire move, so that 5 cent range might drop to 3 or 4 cents. Another one or two cents will be taken up by the spread, leaving just a 1 to 3 cent range of profit. There just isn't enough room, and I expect that traders for such cheap stocks would be longer term traders. A trader looking to take advantage of intraday moves will stick with active and liquid stocks with low spreads.

 

[Trembling Hand]

Like your thinking Mr J

 

[MS+Tradesim]

This kind of move is perfectly tradeable. You need liquidity (deep market depth) and turnover (volume). You need to learn how to read the market depth and order flow to consistently profit from this kind of trading. Your position size needs to be a very small fraction of the turnover so that your trade isn't moving the market, but big enough to make the small moves profitable. I would suggest this kind of trading is not for the inexperienced, as you need to be able to exit (at profit or loss) without hesitation.

 

[tech/a]

I agree with both T/H and Tradesim

Frankly people read volume in correctly.
I look for very low volume.

This is AIO and todays volume was 20 million.

If your really interested in Volume I suggest you study VSA (Volume Spread Analysis).

 

[Boggo]

Frankly people read volume in correctly.
I look for very low volume.

I am assuming you are dealing with a potential long entry there, or the end of downtrend with decreasing volume, is this correct.
Is this the opposite then tech/a for a short, ie. high open, low close and larger range with high volume = sellers. (WPL)

(click to expand)

 

[tech/a]

Yes it can be and is quite often the case.
However the opposite to what I'm putting forward would occur in a retracement UP in WPL where we find an up bar on very low volume failing to show demand.
It would then become a possible reference for a further short trade.

 

[Boggo]

Thanks tech/a.
MTPredictor identifies VSA significant volume bars in red.
Do you find that VSA read in conjunction with pattern analysis it seems to catch some important potential turning points ?

WPL in MTPredictor below
(click to expand)

 

[Trembling Hand]

MTPredictor identifies VSA significant volume bars in red.

Of course it could also be finding what you knew was gonna happen about 12 months ago.

 

[CanOz]

oooooh, Boggo, OUCH! Sounds like something i would say lol!



CanOz

 

[beamstas]

Of course it could also be finding what you knew was gonna happen about 12 months ago.

LOL

Brad

 

[tech/a]

Of course it could also be finding what you knew was gonna happen about 12 months ago.

Accounts for most volume only.
Where the volume occurs relative to the life of the stock and in this case an identified high area followed by a pivot point reversal with a nice piruette.
Youd be happy if youd shorted it and there is plenty of analysis which pointed that way.

 

[Trembling Hand]

Not sure what you mean tech?

 

[Boggo]

Where the volume occurs relative to the life of the stock and in this case an identified high area followed by a pivot point reversal with a nice piruette.

TH, agree re the options adding to the volume but as tech/a is alluding to in the case of this particular stock it coincides with a pattern of potential reversal which is what I am looking for.

Are you saying that every stock closes on its low with a reversal bar and an 80% increase in volume at option expiry.

 

[Trembling Hand]

Are you saying that every stock closes on its low with a reversal bar and an 80% increase in volume at option expiry.

All I'm saying is .......... nothing. Let you-tubes be you tubes

 

[MRC & Co]

lol.

Yeh, I like those high vol bars which hit a resitance or support, (or even false break it), with a long wick (closing in the opposite direction to the trend), as reversal bars after a run in one direction.

Problem with that chart, is there is a gap below, which may just be closed and form a HL before it moves on up again.