Posts Tagged ‘gaps’

Trends On The Trin and Vix, Gaps Are Always Filled

Saturday, October 25th, 2008

If you are a trader, particularly trading the ES, or spoos, you know how the intraday market often takes you right out of a trade executed at the wrong time. You expected a short trade and you were right but you got in too early. A common problem for all traders. What if there was a way to know if the market was moving in your favor before you executed? We think there is. And it is primarily dependent on reading both the trin and the vix. Consider this premise.

If there was an effective way to know whether a trend has started on the trin, would it necessarily mean the same trend had started on the vix? Not at all. Unless both the trin and vix have ended an existing trend, trading against either one could easily result in losses. We have developed a time tested method for determining when a trend exists as well as a means for determining targets for when it will 4x software And we have developed a complete consistently profitable strategy around it.

We are sharing our logic here for the first time anywhere.

When using a 1 minute chart, the trin and vix moves in small increments measured to the 2nd decimal point (1/100th). To illustrate the idea we will just talk about the trin although the basic idea applies also to the vix. The first issue, however, is to determine what part of the bar you are looking at. We believe the high of the trin and vix corresponds with the low of the spoos. The converse is also true. Also forget all the preconceived ideas about what is bullish or bearish. The trin can be at 3.4 and move down to 1.9 and you can see a heck of a rally in the process.

Presuming that the trin has established a pivot in the opposite direction, if a trend is being established look for the following.

The trin should move from the current 1/10th decimal point in to a new 1/10 decimal point. ei
current reading 1.15 and going up. To be trending, the trin must move in to 1.2X at least. Trin must not have been less than 1.15 when you start tracking it. Also, if the trin moves lower than 1.15, the 4x software trend probably has not started and you need to keep watching. But once it starts to move, it WILL move in to the next 1/10 decimal point and likely will continue in to the 1.3X or 1.4X or more. Thus the trend has started and trading with the trend will produce successful trades.

Another compelling factor, however, is the existence of gaps in the trin and vix. We define a gap this way. If the close of the preceding one minute bar is not intersected by any portion of the current bar, a gap exists. Equally important is if the high of the current bar has not intersected the close of the previous bar you have a gap that suggests the index will move UP to fill the gap, hence resulting in a corresponding drop in the spoos when the gap is filled. If the low of the current bar does not intersect the previous bar, the index will move down to fill the gap, resulting in a corresponding move up in the spoos when the gap is filled. Gaps of any size in the trin are always filled. Gaps in the vix of less than .05 may not be filled. We have the data to prove this. So if you know where these gaps are, if the current reading is in general proximity to a known gap, holding the trade until the gap is filled can be enormously profitable.

We invite you to explore these concepts on your own or if you want to see specific results check out our website or write to us for examples of any given historical date and we will provide you with the data.

RSKsys Intl.

http://www.rsksys.com

spooman@comcast.net

Mexico City - Global Water Crisis and Assessing Non-Revenue Water Challenges (Case Study)

Thursday, October 23rd, 2008

Water infrastructure must be approved in the largest urban cities in the World, and yet, no one knows where all the money is coming from. Each year the demand gets bigger and the supply gets closer to crisis. Worse in many of the largest urban areas, the governments are losing revenues needed to improve those infrastructures.

Over 40% of the water is lost in Mexico City due to poor infrastructure, unauthorized hook ups and theft. Additionally, undeclared wells are a huge challenge. In Mexico City there are 660 declared wells and perhaps five times that many non-declared. Mexico City is sinking due to the ground water being pumped out faster than it recharges by a factor of 2:1, meanwhile the soil consists of clay and is a dangerous situation during drastic changes in hydrology.

To make it worse, millions of people living in slums without water and many that live on the far side of town where any water coming through is highly polluted. Mexico City is said to have some 20-million inhabitants, but the real number could be as high as 25-million now. The officials have no idea what to do if there is an earthquake, the water system will be severely crippled, perhaps beyond repair, as if it is in a state of repair anyway.

Many of Mexico City’s rivers and streams double as wastewater removal canals, it is quite disgusting and very dangerous for human Health for those who live downstream. It also challenges the quality of the underground aquifers and ground water, and without that or even with that, Mexico City is sunk.

There appears to be deep water aquifers at more than 300-yard below the surface, but it costs a lot to make wells that deep and takes a bit of energy to run the pumps, making such options economically non-viable. Other potential water sources to fill the gaps would require bring water over the mountains into Mexico City which sits in a valley, which was once a lake. And folks this is just one major urban area in the World at a pivotal point, and on the verge of complete chaos.

“Lance Winslow” - Online Blog Content Service. If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/.

Disadvantages of Day Trading

Wednesday, September 3rd, 2008

While day trading offers a lucrative opportunity, it still has some inherent disadvantages that are hard to get over for many people. Here are some of them:

Loss of money

The trade is very lucrative but is also very dangerous. Many traders walk out at the end of the day with a depleted account which would not even pass as a paycheck. Depending on the decisions one makes during trading, a person could lose several hundreds to thousands of dollars

Improper money management

Because this trade revolves around money, and the money invested here could be lost at any time of the day, a trader then faces the risk of spending the money he could not afford to lose. He might find the need to borrow money from lenders or use his money intended for bills as funds for trading.

Demanding Job

Day trading is not a laid-back type of job. You have to dedicate a certain time of your day to it with full focus depending on the income you want to achieve. Also, it is a highly stressful job which demands you always make make-or-break decisions while being time pressured. For people who find it hard to focus for lengthy period, they may find this trade a bit frustrating especially when very little is actually happening.

Huge stressors

Being a trader requires you to endure huge daily stressors, not only on the perspective of possible money losses, but also because the job will require you to give all your focus on what’s happening in the markets that could affect your trades. You will also have to constantly watch the fluctuations in the prices and the market plus the indicators that will help you decide where to put your next trade.

Overnight Gaps

Trading ends as the day closes so any market activities overnight won’t affect you in anyway- even if sometimes it could be advantageous on your part.

A moving market is not a guarantee

Sometimes, the market is so active but you’ll end up with a loss or a breakeven. This could be attributed to wrong decisions on what shares to buy or to sell or wrong timing in entering the trade.

Overtrading

Overtrading - is defined as either taking too many opportunities or trading too large shares - is very prevalent in day trading. Amateurs and emotional trades find it hard not to overtrade which puts them at a lot more risks than necessary.

Miodrag Trajkovic is an expert on information related to Day Trading, Day Trading Systems, Day Trading Strategies, Online Day Trading and Day Trading Websites.
For more information visit his website http://daytrading.explore-me.com.

Japanese Candlesticks Can Predict Reversal of Major Trend

Saturday, May 31st, 2008

Observing the movement of stock prices in Japanese Candlestick format and in real-time depiction is somewhat akin to watching the printout of an electrocardiogram in motion. One is seeing at first hand the story of an unfolding investor psychology. The first practitioner of Candlestick price representation, so many centuries ago in Japan, was no doubt seeking to develop a strategy or a system of tactics which would deliver to him a trading advantage which would assist him in planning his next moves. The technique of price recordation which he developed was based on the principle of expanding the “line,” or “bar,” on a chart representing the range of prices for a given time period so as to create a fattened-out line, or cylinder, in which the opening price and the closing price for that time period would be the upper and lower limits of the cylinder. If the closing price of the day were higher than the opening price, then the cylinder would not be filled in, or would be left “white;” whereas if the closing price of the day were lower than the opening price, then the cylinder would be filled in, or made “black.”

This style of price display presented a visual picture which was instantly recognized by the eye. It was easy to discern the mood of the rice traders which was in effect during that session; and, depending on the relationship of that particular Candle bar’s relationship to adjacent and nearby bars, the operator had a basis for making a prediction of the direction of prices for the next day.

Furthermore, when interpreted properly in the light of human judgment, the shape of a bar, especially when considered in conjunction with adjacent or nearby bars, was found to possess an ability to forecast a reversal of major trend.

After long and expensive historical research and translation of old records into English, the Candlestick approach to price charting was brought to the Occidental world about 25 years ago. In the early years, the Candles developed a following only very slowly. More recently, however, professional traders and investors, as well as those who do not trade or invest for a living, have begun to appreciate the advantages of the Candlesticks, to the point at which it seems reasonable to predict that they will be the standard within the foreseeable future.

What is so unusual about the Candles? In short, they form patterns which have meaning in terms of revealing traders’ theretofore-hidden investment rationale, and also in terms of allowing forecasts to be made regarding the future course of price action. Some of these visual formations or images are useful in foretelling the end of a trend and a possible topping out and rollover to the downside (if the major trend has been one of increasing prices) or of bottoming out and rolling to the upside (if the major trend has been one of declining prices).

At the top of an extended rising market, one of the more dependable reversal patterns is the “Evening Star,” a three-bar pattern in which the first bar is a tall white bar; the middle bar is a small “Star” which usually sits higher than the first bar; and the third bar is a tall black candle which usually sits lower than the Star. This formation is bearish in its implications; and the implication is strengthened if the Star is a “Shooting Star,” which looks like its namesake. At the end of an extended declining market, the inverse pattern can also appear; and, perhaps not unexpectedly, its name is the “Morning Star.”

The opposite of the Shooting Star is the “Hammer,” which appears only at the end of an extend downtrend. The Hammer is considered to be one of the more reliable predictors of a possible change of trend to the upside, especially when the next day’s closing price is higher than the closing price of the Hammer.

A “Doji” is a price bar in which the opening price and the closing price are the same. It is considered to be an indicator of a reining-up - of indecision - and of a possible change of trend, when it appears at the end of an extended move in either direction. A Star whose opening price and closing price are the same is called a “Doji Star.” A “Bearish Engulfing” pattern occurs at the top of an uptrend, and is marked by the “real body” (i.e., the cylinder in the price bar) engulfing the real bodies of one or more previous bars. The “Bearish Engulfing” formation is, quite naturally, bearish. Its converse is the Bullish Engulfing pattern, which occurs at the bottom of a downtrend; and, obviously, carries a bullish signal.

In Candlestick parlance, gaps (”windows”) are celebrated as being generators of support and resistance. Often, a comparison of price action before and following a gap clearly reveals the power of a gap to repel prices which venture within it.

The Candles are useful in any time frame, including day trading. Although they are valuable in foretelling reversals, they do not predict the extent of a move. They are perfectly compatible with all “Western” Indicators, and the synergy which often results from the Candles and the Western Indicators used together can be remarkable. Furthermore, the Candles are equally adaptable to use in every financial market, including stocks, indexes, commodities, and Forex.

Technical analysis of Japanese Candlestick price imaging is founded on the hypothesis that price action in the financial markets is not random or mechanical; rather, that it is patterned (if the practitioner is following Elliott Wave theory), and that it is the result of human emotion in action.

There are many practitioners of Candlestick analytics who make their services available to the investing public. Some of them publish investment advisory newsletters (alternatively called “investment newsletters” or “market letters” or permutations thereof); some offer instructional and training seminars, forums, and chat rooms; some publish books; and some of them offer multiple services and products. Their observation of the Candlestick world sometimes leads to a critique of the common wisdom as propounded by the media, and to explicit review of, and commentary on, the state of the markets. Expostulation of the Candlestick analytical technique is not commonly a part of financial news programs, either in the popular printed media or on television; nor are the particulars of Candle theory often the subject of study, research, investigation, or illustration for the benefit of the investing public.

This is unfortunate, because the information which flows from these concepts could often open up new possibilities for investors and be of value to them in their decision making process.

http://www.candlewave.com

Day Trading Momentum Stocks For Profits

Saturday, May 10th, 2008

Day trading Momentum Stock traders always search for companies that are moving faster than the market. They buy stocks that are already on their way up with the belief that it will continue to go higher.

Momentum investors do not care about the fundamentals of a company as long as the price continues to go higher. They believe substantial returns can be realized if they find, buy and hold onto those issues while price continues to go up.

These kinds of investors would likely use technical analysis to forecast whether a stock will continue to rise or not. However, one can’t just know with a 100% certainty when the rise may be over.

A trader participating in momentum investing will take a long position in an asset, which has shown an upward trending price, or short sell a security that has been in a downtrend. In practice, momentum investing is nothing more than buying stocks that have high returns and selling those that have poor returns. If everybody is thinking that way, rising stocks will keep rising and falling stocks will keep falling. However, this cannot last forever.

In order to earn money from momentum stocks, it is very important to buy and sell at the right time. There are a handful of key factors in successful momentum trading.

One of these factors is the point at which one is willing to enter a trade. Setting specific entry points is important in order to catch the momentum once it has begun. The key to successful trading on momentum is not playing around within the stocks’ recent high and low price range.

Setting an entry point above the stock’s recent high price or below its recent low price helps one catch bigger, more significant momentum in trades.

By setting an entry point above the stock’s most recent high price, one will only begin to trade when the momentum is already going in the direction predicted. In this case, the price is going up.

If, however, there is initial downward momentum, the investor’s trade won’t trigger, preserving his/her capital for other trades. Setting proper entry points is therefore essential to the success in momentum trading.

In momentum stock, an investor needs to minimize the risk of losing trades by pre-designating a price point at which he/she chooses to exit or stop a trade with a minimal loss.

The use of stop points helps to limit the magnitude of a losing trade, thus, is crucial to the investors’ capital preservation. By setting stop losses, investors allow a small movement in price going against them, but cap the amount of negative movement they are willing to absorb. By exiting a trade that is going against them with only a small loss, they are able to preserve their trading capital for future trades.

Stop points also help eliminate emotional trading. As investor, one needs to guard against staying in a trade too long while hoping for a turnaround. Set correctly, a stop loss will allow for small fluctuations in price but protects the investors from more powerful momentum going against them.

There are times when the stock’s momentum carries the price beyond the targeted exit price. When this happens, trailing stops is a useful tool, allowing the investor to let profits run while cutting losses at the same time.

Get your Fade the Opening Gaps System and sign up for my free method here at: http://www.daytradeformoney.com.

Making a Mint Via the Forex Forecast

Tuesday, December 25th, 2007

There are various techniques to make a forex forecast. If you’re involved in forex trading, you already understand that it is the exchange of two different types of currency. You sell one to buy the other. Each trade is really two different trades. The successful forex trader takes advantage of the exchange rates and tries to find trends in the money market that allows them to monopolize and maximize their return.

If your account is in USD (United State dollars) and you believe the Euro is going to go up in relationship to the dollar, you want to sell the dollar and buy the Euro. The way you write the exchange is EUR/USD buy. The Euro is the base and the USD is the counter currency. If your instructions were buy, you’d buy the Euro and sell the USD. The instructions are always describing the base currency with the counter having the opposite type of exchange. If you ordered a sell then you’d sell the Euro and buy USD.

Forex forecast consists of two different methods. You can use the technical analysis or fundamental analysis. Fundamental analysis forecast with events and how they should affect the market. The technical forex forecast puts its primary focus on what already occurred within the market. It uses chart to help predict what happens next according to the price movement.

Technical analysis takes the price, the volume and sometimes also interest to create charts. It uses the movement of the past to predict the movement in the future. Much like stock charting, it takes the data to create instruments to use as tools and often follows and adjusts the charts in real time. Even though you may know that the market should drop because the country, for example, had a massive hurricane, if the movement of the currency doesn’t indicate that movement, then all the fundamental information in the world doesn’t count.

Technical analysis also looks at the trends or patterns of the currency and anticipates the past will predict the future. Many different patterns are repetitive and forex forecasting uses the charts to find that information. The trends and patterns repeat often with little deviations. This makes the tracking easier.

Technical analysis uses five basic categories that involve the price. They use indicators, the number theory, waves, gaps (between the high and low) and trends (also known as the moving average.) Many who trade stock will find these terms quite familiar.
Fundamental analysis forecasts the future movement of the currency price from political, economic, social, and even seasonal factors. The fundamental analysis for a forex forecast correlates to looking at a company’s financials and news to forecast stock movement. Understanding the country’s supply and demand, seasonal cycles, weather and governmental policies, both monetary and otherwise, help predict where the price should land.

Most successful traders use a combination of both forms of forex forecast to make their decisions to buy and sell the various currencies. Knowing the countries and their historic patterns of value in relationship to events can only tell so much, watching the technical patterns helps to fill in the gaps and adjust for attitude changes or inaccurate information.

For more insights and additional information about how a Forex Forecast as well as a review of one of the foremost forex software programs available anywhere for the serious forex trader, please visit our web site at http://www.forexcurrencysystems.com