Tuesday, October 12, 2010

Why read RUA if you trade e-minis?

While we are waiting for the FED's signals, (actually we already know the outcome, smarts just play a dip again) I decided to show you why do I prefer as large volume as possible.

This post is a gourmé piece of my posts I feel.

Let's see the chart I usually use for e-minis:














Yes, it's russel 3000 on 5 mins. You can see, histogram is jumping out of the screen, also SB volume shows a nice double bear characteristics giving a big probability for elimination, MVO gives us the favour to show bear/bull switch means trend change.
Perfect setup to trade bull on e-minis. Also, histo nicely showed an exit point !

Let's see the same on low-volume e-minis:















Histo is fine, but oscillator gives weak signal.
Double is not recognizable on volume indicator.
MVO and histo signals come much later.

So this is the reason I make a 3-day, 2-day, 1-day, 60 min, 15-min drill down before the bell, and then I only need to watch 60 mins 15 mins and 5 mins, sometimes take a look into 1 day.
It's all. Volumes talk. We only need to listen and make money.

Good luck!

Btw: What would you trade seeing current 5mins RUA just now?

Answer was here: http://smartmoneyvolume.blogspot.com/2010/10/prudent-day.html

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