Unconventional ways of identifying market moves

Square

Active Member
#11
A very conventional but mostly overlooked method is to view trading based on volumes alone. We retailers are small fish who have to swim alongside of the bigger sharks and whales, not against them. So a big volume tells us that a big fish is making some move. We have to align with that
When you say volumes "alone", do you mean you are arriving at a trading decision, entry or exit on volume itself and just not seeing the price charts? If yes, then pls elaborate your thoughts or analysis. I mean that you look at volumes to decide where a big move will now start or now end and then post that decision you look at the price charts to decide whether to go long or short. Right?
 
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badarivt

Active Member
#12
Liquid stocks see sudden surges in volume far above the normal. For example, Tata Steel sometimes sees trades in excess of 1 million in a 5 minute chart. The big mover(s) who buy or sell at that price range (high-low of that particular 5 minute interval) will not make profit if the price moves against their direction. If price moves above the high, it is safe to go long keeping the low of that 5 minute candle as your stoploss and vise versa to go short. Hope this is clear
 
#13
One way to identify trend in advance is to look for difference between Pre-open market and actual open.

Take a case of today. In pre-open market, Nifty was down about 35 to 37 points. While actual open was way below about 60-70 points.

What it is telling ? It is telling that somebody is in hurry to sell & who is going to be in control rest of the day. It helps to take short trade more confidently. The only thing is difference has to be sizable. Sizable i mean approx more than 25 points

Pravin
Hi Pravin,

where do I get this data of pre-open market??
 
#14
My other observations are as follows:

The charts we see (daily charts) comprise of fundamental or event based movement and non event based i.e. technical movements. Hence when we see a chart as a whole it comprises both, so only trading on technicals or only on fundamental cannot be sustained in the long run even with robust money management.

Market is a market, just like any other market, sabzi market or fish market. It is seasonal in nature, like any other market. But we try to make stock market standardise by using only charts to arrive at future prediction. The stock market is also seasonal, so apart from periodic economic data release, there is earning season at every quarter end, so April, July, Oct and Jan the market will behave differently as quarterly results are announced. So we just cannot trade the market by looking at the chart as is and we need to use some common sense too and keep all such basic things in mind always.

Even for intraday trading, the trading on Friday maybe different than on Monday. Also on Monday people come fresh with ideas and plan to stick to their trading rules etc and hence will behave differently till they forget it by Friday and the cycle continues. Just think how different is our mood when we go to office on Monday morning and when we go to office on Friday morning. Its quite different. So we maybe trading differently when it come to trade on these two extreme days of a week.

For salaried traders like us, we get our salary on last day of the month, the expiry has happened so we have full one month to use our salary till next expiry. So when we start the month, with full account, the volatility in our trading maybe less as we have to take care of the money to trade for full month so we will exit losses early and take proper care of our money. And as the month comes to close we start taking more risk and gamble like jackpot or nothing because we know that on the last day of the month our account will be replenished by our salary. So this cycle also continues. So basically there is also a pattern in our own trading from beginning till end of the month. So if we use some common sense and put some speed breakers in our pattern we can remain green in the end. Else we will continue to run on the tread mill.

All this and more such thoughts led to believe that in trading we must predominately use some common sense first and then our trading tools or system to trade.
One has to maintain a balance between Money Management and Trading Psychology.
 

mohan.sic

Well-Known Member
#15
A very conventional but mostly overlooked method is to view trading based on volumes alone. We retailers are small fish who have to swim alongside of the bigger sharks and whales, not against them. So a big volume tells us that a big fish is making some move. We have to align with that
But volume is subjective. You cant work on it.
Method should be objective like the one given by psvaja.

If pre market is negative he is expecting market to be bearish. No logic but still objective in conditions.
 

psvaja

Active Member
#16
Today Pre-market Nifty was +14 points. While actual open Nifty future was -20 points. So there will be high chances of having good trend down day today.

Pravin