Chart of the Week:
QQQ November 13, 2002
Our conservative short-term trader has made some profitable trades recently. Based on our advice and analysis he was able to make $3,240 for just one day!
If one had even traded January options, they could have made more than 30% on each trade, but we don't generally recommend options trading for our new members.
NOTE: This chart of the week is meant mainly for educational purposes only. We don't recommend that our customers follow these exact trades. We suggest that you develop your own trading style and try doing some paper trading before using our volume analytics.
In this week's chart of the week we decided to highlight the intraday trades of one of our short-term traders, and November 13th was an excellent day for that. In the below chart you can easily see many clear VMA signals that could lead you to a profitable trade. In the morning there was an elevated amount of volume to the downside, which we call buying volume, and that volume was countered by volume to the upside caused by Mr. Greenspan having opened his mouth. And finally at the end of the day we saw more buying volume. All in all, there were three very clear volume signals that could have lead you to making some profitable trades.
Motivations behind Trades: As the market was declining in the morning there was a moderate VMA surge that signaled the market would soon move higher. Since MarketVolume's Market Commentary also mentioned that the market was not likely to go much lower than it had, this was a good opportunity to buy some QQQ shares. Less than an hour later Greenspan offered his opinion on the economy and this caused a very large surge in volume as well as a significant jump up for the NASDAQ 100 index. Since this volume was all to the upside we had to sell as the market could react by moving lower again. For the last trade there was a very clear and concise VMA surge as the index moved lower. It was an excellent point to purchase some more QQQ shares. At the end of the day we decided to sell half of all our QQQ shares, not because of volume, but mostly because an intraday trader generally does not hold much overnight. We are keeping those QQQ shares in anticipation that the market will move higher still.
How can this chart be used by me?
Why trade only stocks (index
shares) and not options?
Conclusion: Our short-term trader, based on our Market Commentaries and Volume Signals, thinks the market will probably move higher, but to play it safe, decided to sell half of his outstanding positions.
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January 30, 2002