Market Breadth and other indicators
BPA trading room Q&A: November 17, 2015
Question: Do you think watching [Market] Breadth is helpful?
Audio duration: 4min 19sec
In this to make money
I’ve watched Breadth and I’ve watched TRIN and I’ve watched TICK. I’ve watched all kinds of things over the years that different people have talked about how they’ve used things. I’ve concluded that a lot of stuff that people think or talk about as being really important like TICK and TRIN and Breadth and Advance-Decline Lines, all kinds of stuff. But, I’m in this to make money and I really don’t experiment with other people’s ideas anymore. But 15 years ago, 20 years ago, I used to pay a lot of attention to what other people were doing. And I found out that what a lot of people were saying, and it sounds like what they were doing, was not especially profitable. They’re just hanging onto something that I thought was dumb.
Already enough to process
I’m in this to make money and if something does not make me much money, I don’t want to do it. Paying attention to Breadth, or TRIN, or Advance-Decline Line indicators, I don’t make much money. When I look at this chart, 81 bars, on an average day, I’m sure I see 50, 60, 70 reasonable trades. So if I add Breadth or anything else—how many more trades do I need? I’m already seeing 50, 60, 70 trades. That to me is plenty to process. Every second of the day, I am thinking, “Should I buy? Should I sell? Where should my stop be? Where should I get out?” And I’m doing that all day long.
Do what works for you
I’m unable to add anything else to what I’m doing. What I do, it works for me and let me also say if someone else is making a lot of money doing anything—I don’t care if they’re using Advance-Decline Lines, any other kind of measure, Breadth, TRIN, TICK, that’s fine. I’ve said many many times: Indicators, stochastics, bands, RSI, or any other kind of indicator. Anybody who is consistently making money is doing a wonderful thing, and they deserve to be respected and admired. For me, I think I can make more money doing simply what I’m doing than by adding other things to the mix.
The search for Self
However, everybody is in a search for Self. Not just in trading, but in everything in life. You’re always trying to find out what your genetic nature or nurture is. Your genes, your upbringing—you’re trying to discover who you are, and what your comfort level is, and the kinds of things you like in life. That extends to trading and if a person is really comfortable using different indicators and they’re making money doing it, I think that’s what they should do. And if they’re comfortable using different timeframes and making money at it, and they’re happy, that’s what they should do.
Never worry that somebody else is making more. That’s just not worth doing. Right? Never worry if somebody else is taller, or more athletic, or plays the violin better. To me, it doesn’t matter. Anybody who is doing something well should be admired and if you find something that you do well, and you’re consistently making money doing it, and you’re happy doing it, that’s all you need. If you can add other things to it and make more money, and you’re still happy, that’s fine. If adding things only adds stress and does not add enough money to compensate you for the stress, I would not do it.
Enough on 5 min chart (99%)
So, I say all day long the kinds of things that I do. Every now and then I bring up a TICK chart, or a weekly chart, or daily chart, or 60-minute chart, but 99% of what I do is right here. I just draw lines, look for support and resistance, and see how the market responds to support and resistance. Will it break through or will it reverse? I look for momentum, strong breakouts, up or down. I look for trading ranges, lack of momentum, and look for limit order scalps. That’s all that I do all day long.
I hope that answers the question. So tomorrow, broad bear channel, bull flag. We may get one more push down – this is so strong – so we may get one more push down. But I think we’ll probably bounce tomorrow. Okay, hope everybody has a good night.