I linked to my brief first candle indicator stuff a few minutes ago in my room and on ST/TWTR.
It’s an intra-day trading term that I made up one day after eventually noticing a pattern.
The law is essentially this…typically the first and last candles of the day have the highest volume.
There are several reasons for that, but typically its the big retail brokerages filling their clients’ orders.
For our purposes today that doesn’t matter whatsoever. Today, I just wanted to share another real-time version of it.
It’s presently 1:45 EST on Friday, July 27th (2018). The indices have fallen off a cliff. I’ve been trading short-term puts….as TRADES. Presently the indicator is in progress.
There’s a lot of panic selling going on, but it being an options expiry, there are all sorts of psychological games being played by those who run the game and those who make the markets.
There is also a crazy moon cycle we’re in. I’ll skip that so you don’t think I’m full Looney Tunes. I am partially though.
I have not been selling very much beyond expiries for today. I don’t think it’s the end of this secular bull market yet. We are certainly teetering. But Jack sat on the wall….
Ok, so there was the big bullish candle at open. I call those Jesus candles [the cross shape].
Then there was no volume to eclipse it so I had no fear. I held almost everything.
But then, as you saw in the first chart, there was volume on a candle that was larger. That would be here:
That I would call a ‘fat Jesus candle’. The cross is thicker, but there is still more wick at the bottom than the top. So the momentum implied on that candle is very similar. Bullish.
Now as I wrap this up at 2:08….
The bottom line is that volume is king. Watch it. And watch the momentum it creates. It’ll help you in making successful trading decisions.
I typically change the ‘first candle’ to the next candle that eclipses it in volume. So that ~13:00 candle is presently the first candle by this rule.
Once I see higher volume on a bearish candle I’m sold.
That said…yo its 2:15 PM on Friday. I got some money to protect and some to make. I hope this little trader’s ramblings have helped some of you out.
Thanks for reading and trade safe.