STTrading weekend thread 20th and 21st July 2024, page-22

I've been working on looking for tells with volatility spikes.

I'm trying to learn about how to better use the ROC indicator to manage trades as it's a real time indicator - there is no lag.

I overlay a standard deviation look back of something like 10-15 days and set the ROC to something like 30 minutes.

Spikes up or down into and beyond the 3rd Std band often precede a directional move. Especially multiple strikes.

Often you'll get one spike up and one spike down within a short space of time. It can be a very noisy signal hence the z-score to try and give it some context.

It's interesting because you see the standard deviation bands contract and expand the more volatility there is in a stock. Corresponds nicely to wyckoff coils or volatility contraction patterns as Minervini calls them.

I'm pretty inspired in the approach by Linda Raschke although I have not been a good or diligent student of late. Been far too busy losing money in the stock market

Been a tough month for me. Especially since the ASX is ripping but my performance is very much lagging.

High volatility is a bitch. Stocks just drop value so quickly and can reverse just as quickly. Even heavily traded names like DRO. Cash flow down is vacuum like. Of course this one had a classic kind of blow off top look to it as well.

Enough cathartic rambling for now. Have a good weekend all and good luck next week.