Wednesday, 8 February 2012

Volumes are Still Falling

Trading volumes are reported to still be falling. This has had an impact on the rhythm of the markets and explains a lot of what we have all been seeing. None the less, there is still plenty of volume, it's just the relative volume that has dropped.

If you are using minute bars, tick bars or volume bars then there may be an impact on your trading pictures. If you are using range bars or Renko bars then the impact on trading pictures will be substantially less in most cases.

As both a discretionary trader or an algo trader, trading pictures should be devised so that they automatically adjust themselves for these changes. Hard wiring $ stops and targets is possible with frequent retesting but it's a lot easier to use dynamic stops and targets that cater for these frequent changes as the transition continues.

Had some good response to yesterday's post about showing my proposed trades in advance. These longer term trades will be initiated trading the future or ETF or stock and where appropriate, I'll arb the position into an option position. Some of you will be interested in the options, others only in the underlying trade.

I'm also looking at the technology to Tweet some futures day trades as they are happening. This might give a bit more perspective to what I have been showing in the blog and give more of a feel for the trades. If people have a chart up then they can watch a trade unfold in real time and see the entries and exits. I'm not sure yet which software will be the least overhead for me and how quickly what I Tweet will hit the Tweetosphere. We'll be testing soon.

Today was a firm start to the day in many markets. I traded the DAX today.

I got caught with the first short and doubled down to get out of it for a scratch. The next three trades paid the bills. The fourth was a small win and I was finished.


  1. Why do you think volumes are falling? Do you believe this a short-term condition, or part of a longer-term trand?

  2. jenrique42

    This has been my trade for today

    I hope that when I have more experiecia and masterfully use this system, take advantage of these opportunities, such as those pointed out, are two turning points, since today was a pretty day side

    the system is impressive



    este ha sido mi trade de hoy

    espero que cuando tenga mas experiecia, y utilice con maestria este sistema, aproveche las siguientes oportunidades, como las que seƱalo, son dos cambios de tendencia, ya que hoy ha sido un dia bastante lateral

    es impresionante el sistema


  3. jenrique42

  4. Gracias jenrique42, I'm glad it's come together for you. Well done!
    Anon12:00, I think it's a combination of the money that has evaporated from the financial system, fear of the current economic situation and MFGlobal. I suspect that it's mostly the first reason.