Posts Tagged ‘Trading Volume’

Intraday Swing Trading with PVT

Tuesday, December 11th, 2012

Intraday swing trading 

As day traders we use the PVT method (price action, volume and trend lines) day in and day out.

Yesterday we saw some great examples of PVT in action.

PVT - Price Action Trading Example

On the chart above you can see a nice up trending stock. Let's focus on the area highlighted in the box on the chart below.

PVT - Price Action Trading Example

In this chart you can see one of the text book set ups of the PVT method.

The stock has already made a NEW HIGH for the day so we now that so far we are dealing with a strong stock.

The box on the chart above shows you the first retrace after the high was made.

We look for these retraces to flush out the sellers. 

Once we know the retrace is in effect we look for the clues that price action and volume give us to let us know if the next move will be higher.

In this example the retrace begins one bar after the daily high was established. We marked this as "1." on the chart below.

PVT - Price Action Trading Example

This bar is followed by 2 more bars (marked 2. and 3.) which gives us our "3Down" chart pattern that we love.

After a "3Down" we watch to see if price action AND volume work together to give us an entry signal.

The next bar after our "3Down" pattern (the blue arrow on the chart) we see the tell tale signs of the next UP move.

We notice that as the bar progresses it never trades below the low of the previous bar…a bullish sign.

We also notice that volume is increasing and as this 5 minute bar comes to an end we KNOW that we have increased volume.

We also see this bar trading higher than the high of the previous bar.

As of this together is a text book entry using the PVT method.

Once the entry is made we simply manage our position and watch as price action/volume continue to tell a story.

 

Swing Trading Week in Review – November 23, 2012

Sunday, November 25th, 2012

Swing Trading BLOG – Swing Trading BOOT CAMP

$DIA - Swing Trading ETF

First things first…

Happy Thanksgiving! We hope you and your family enjoyed your holiday!

The markets opened with a bang this holiday shortened week.

Monday traders watched as the market GAPPED UP after weeks of relentless selling pressure.

The move was somewhat expected (as we mentioned in last weeks post) since the market was trading in severely OVERSOLD territory.

All three indices traded basically drifted higher on LOW VOLUME the entire week.

You can argue of course that this low volume is to be expected on a holiday week but we know that it is also a telltale sign of a retrace in down trending market.

The "bounce" was a big one nonetheless.

The Dow Jones Industrial Average rallied over 400 points in fact.

The sellers have taken a break (for now at least) and that is a good thing.

The thing to remember though is that we are still in a text book DOWN TREND.

This latest "bounce" was a retrace on LOW VOLUME.

So what happens from here after such a big bounce?

Who knows.

Some people are calling for the BEAR to lose steam and the BULL to return.

More are saying prepare for a lengthy BEAR market by getting your SHORT strategies ready to launch.

What do we say?

We say…WHO CARES???

As short term traders we need to be ready for whatever the market decides to do regardless of direction.

We are NOT investors.

If the market rallies higher? Great I have a strategy for that.

If the market starts to sell off again? Perfect because I have a strategy for that.

In last weeks BLOG post we gave you the details of our trading plan for this past week.

It played out almost exactly as we described.

Our remaining SHORT positions were stopped out so we were flat going into Tuesday,

The stocks that we mentioned that were showing signs of strength ($K, $V, $CREE, $FB) made some nice moves higher.

Did we jump onto the LONG side?

Not at all. We traded our plan and our plan was to reevaluate after the retrace was confirmed.

The gap up and drift higher scenario would have kept us out of the market anyway.

In hindsight the moves in these stocks would have produced some nice profits.

Our strategy (in this case) was not to buy stocks on a "bounce" in a strong down trend.

We followed our strategy and watched the market for the last 3 days of the week without doing anything expect getting ready for the next move.

Next week we will be watching to see if the down trend shows signs of returning.

If it does we will get SHORT all over again.

If the market shows signs of change (from BEAR to BULL) we will be prepared with a list of LONGS to jump into.

We always try to teach you you be prepared for anything and act accordingly when its time.

This upcoming week is no different!

Until then…Good Trading to YOU!

 

Swing Trading Week in Review – January 14, 2011

Sunday, January 16th, 2011

Swing Trading BLOG – Swing Trading BOOT CAMP

And UP we go!!! (Again!)

SPY
After a week of increased selling last week we watched as the market rallied (again) to NEW HIGHS!

In last weeks BLOG POST we told you that we were concerned coming into this week because of the selling we witnessed last week.

One sector that we mentioned was the Semiconductor sector ($SMH).

Last week a few stocks in this sector had some BIG TIME selling going on.

$LRCX, $ATMI, and $NVLS we the names that we mentioned.

As we came into this week we were watching to see how these stocks and the Semiconductor ETF were going to trade.

Monday was a good indication that this sector was starting to move higher again.

After showing a bit of weakness last week this new move to the UP side could be merely a "retrace" after the move down.

When Tuesday came around and we watched as the volume increased to push most of these stocks (and the ETF) higher we figured the sector had found its legs once again.

SMH

That being said we still were NOT looking to take any trades in these specific stocks due to their weakness last week.

The were plenty of STRONGER sectors for us to watch so we simply took notice of the change in sentiment in this sector and will watch for follow through  next week.

The sectors that we mentioned last week that were "holding up well and worth watching" all turned in a nice week.

The FInancials (XLF), Hombuilders (XHB), Broker/Dealers (IAI), Agriculture (DBA) and Energy (XLE) and Oil (OIH) provided us plenty of opportunity this week.

XLE

As we enter into next week we are once again in FULL RALLY mode.

Our plan (as always) is to stick with the strong sectors and avoid the weak ones.

Until next week…Good Trading to YOU!

Swing Trading Week in Review – December 23, 2010

Sunday, December 26th, 2010

Swing Trading BLOG – Swing Trading BOOT CAMP

The SANTA CLAUS rally continues!

The holiday shortened week saw the market push higher although both VOLUME and VOLATILITY were less than impressive.

SPY

So what do we do from here?

No one knows for sue but a move on significant volume should give traders a clue.

As far as Sector ETF's go we are seeing the most of the strongest sectors continue to "drift" upwards.

Retail ($RTH), Energy ($XLE), Oil ($USO) and Oil Services ($OIH) all had a decent week.

Agriculture ($DBA) had a nice move this week as it moved to a NEW YEARLY HIGH.

DBA

Despite the "stall" on Thursday the Financials ($XLF), Broker/Dealers ($IAI) and the Homebuilders ($XHB) a nice move as well.

XLF

With a few exceptions most of the individual stocks on our Watch List followed the markets lead.

The lack of VOLUME lead to a lot of sideways trading this week.

Target ($TGT) and Carnival Cruise Lines ($CCL) were two stocks that provided us with nice LONG trade setups AND followed through nicely to close the week.

TGT CCL

As this nice move in the market continues the lack of VOLUME and VOLATILITY that we have mentioned in this post is a sign of caution as we move into next week.

The momentum has slowed a bit but that doesn't mean that it cant continue next week.

The only thing we can do as traders is to prepare ourselves for whatever the market decides to do and take the appropriate action.

Until next week…Good Trading to YOU!

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