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Intraday and volume

 
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RGJgene



Joined: 09 Sep 2004
Posts: 3
Location: Houston, Missouri

PostPosted: Sun Sep 12, 2004 4:53 pm    Post subject: Intraday and volume Reply with quote

Candlestick1, would appreciate your comments, and any other trader's!


Sounds to me like some traders are trying to day trade low volume stocks? While Steve has proven you can profitably swing trade these stocks, day trading them is VERY high risk.

My experience is when trading intraday, I have to remember two caveats:

1) Volume (Signals are statistically valid depending on volume)
2) Time of day (also because of volume)

In Steve's book, p.255-257, he gives some examples.
Notice the examples are based on a HI volume index.
Also notice the time of day of the signals he considered signifcant.
The examples don't show volume but I know the index is high volume and I know that signals are statistically more valid on HI volume. Meaning a doji at 10:00 on hi volume IS MORE valid than a doji at 12:00 on lo volume.

I repeat, trading lo volume stocks intra day is VERY high risk.
It is not less risk, it is GREATER risk. I think that is why Steve said to trade the indexes intraday.

I personally consider volume of 100,000 to be the minimum volume to validate a signal. If a stock is not trading 100,000 shares in 15 minutes, I WON't day trade it . Obviously then I want a minimum 100,000 shares a day to swing trade it.

I trade one minute candles the first and last hour and fifteen minute the rest of the day. I make 80%+ of my profits trading the first and last hour!

KEY POINT:If you think candlestick signals don't work, watch the indexes or any of the highest volume stocks. Then when signals don't seem to work, check the time of day and volume.
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candlestick1
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Joined: 27 Jun 2004
Posts: 503
Location: Houston, Texas

PostPosted: Mon Sep 13, 2004 9:47 am    Post subject: volume Reply with quote

I try to keep daily trading volume to a minimum of 200,000 shares per day. If I am buying 5000 to 20,000 shares of a stock at a time, The volume for small priced stocks needs to be much greater. For day trading, the volume needs to be active enough to get out of a position with a minute or two at most. There are too many high volume stocks that can be traded versus putting a constraint on yourself when buying a low volume stock that could keep you from getting oput fast.

Low volume stocks can be used by investors that may want to position a small position for a few days
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