Can someone please tell me how to read this example chart of a live trading ?
This is an 1 mt chart of equity share for my day trading. And i am showing Double Bollinger Band Strategy. But please ignore the BB and other charts and please can someone guide me on all or any of my questions
How to predict the spike down (or up) shown in this chart? As you can see the Double BB strategy does not predict the spike.
What tool I should use to trade in range-bound conditions?
What is best strategy to do scalping (I guess scalping is what one can do in range-bound price movements) ?
Since most of the equity price is range-bound in a year and NOT Trending, which is easier to handle, I need to learn how to handle Range-bound and / or Scalping methods / strategies.
Can I get some links or book names
or even direction to other good forums such as this where I can ask these questions?
Hi, scalping strategies are the most profitable strategies BUT they are very sensitive to market changes, backtesting requires very high-quality tick data which are expensive and a VPS server with good hardware configuration. Well, think about whether you are able to meet these requirements. Maybe you should consider using a higher time frame Regards Greg
Hi, we have answear for third question . There is no such think like “predict”, statistical advantage, this is what you should looking for. If you want looking for spikes and use this move for profit, standard indicators can work for you, all you need to make research and find good settings for choosed indicators. Regards Greg
I haven’t heard of any indicator that would predict a spike as shown or even an upwards spike on the same chart. That’s because indicators all work off price data and they can therefore only offer an interpretation of what has already happened. This interpretation plus visible chart formations can suggest what will probably happen in the near future but these outcomes are very limited - price goes up, price goes down.
The appearance of the downwards spike was unpredictable using data up until 11:40 but once it had appeared and printed at 11:42 you’re dealing with a new chart formation, which maybe made a price recovery and in-fill of the gaps at 11:41 and below the red bar of the spike more probable. However, by 12:00, it was apparent that a trend reversal was not the next probable outcome, suggesting price would probably resume the downtrend or, less probably, move into a sideways consolidation. It looks like price took the second route and started to consolidate. Some would say that a dramatic and deep but transient spike down after a gap often marks the exhaustion of a downtrend.
The fact that the spike as unpredictable does not mean this market could not be traded. Price before the spike was in a downtrend. Traders should have been short or in cash, but not long.
Thanks Greg. I guess spikes cannot be really predicted though downward trend can be seen if one knows how to read charts. And I guess I have to learn a lot more. Regards Shantanu
Exactly. This is what I am still not able to do. Sometimes I feel I am able to interpret and then I feel “no way I know nothing!! I should lay off from trading”
And this why for me a spike tells me to lay off for sometime as I am not able to tell what it is going to do next. And then later i find hey!! it has gone down further and I missed my chance. Again it confirms that I am yet to learn a lot more.
Sorry to put a damper on your enthusiasm but if your asking this question and at the same time trading on 1 minute charts I think you need to rethink what your doing.
One minute charts are no place for the beginner, I hope your doing it on demo.
Anyway to answer your question can spikes be predicted, the only real cycle in the market is that low volatility begets high volatility.
So somehow you need to get in either in the low volatility as taking place, or better still as the price expansion begins.
I notice you are using a Bollinger Band, well Johns bollingers favourite strategy is a volatility breakout which is well documented in his book Bollinger on Bollinger Bands.
To be honest though I really don’t know how this would play out on such a fast timeframe, good luck anyway, I too trade volatility breakouts although on dailys and 8 hour charts.
Sorry for such late reply had been away. Thanks for this reply.
I use 1 mt chart 5 mt and 15 mts to correlate. 1 mt only to see what is happening inside. BUT THANKS!! I guess i Must stay away from 1 mt and NOT Trade on them. I seem to be losing more there.
I use them only when mkt is flat totally so I can catch INR 0.05 to 0.10 but I have seen when I use 5 mts chart I still need to Monitor 1 mt under it as things can change
But 5 mt still okay.
If I do with 15 mts chart and I AM DOING intra DAY Trading Folks so 15 mts is too long and things can change within that period so I need to see 1 mt chart
BUT I AM SURE I AM DOING IT ALL WRONG!!
I am fumbling I FEEL at times.
I should probably Stick to ONE Technique
Should I stick to PRICE ACTION or Should I use indicators also?
Maybe I should create a new topic question
I stick with the dailies. 1 min charts contain a tremendous amount of noise, requires very tight spreads and a tremendous amount of discipline to trade profitably.
Regards Greg
