15 July, 2016

Single Print at Extreme

Rationale & Trading Techniques

Price moves because of supply and demand. When we have reached a price level where no one is willing to buy, price will stop moving up and when we have reached a price level where no one is willing to sell, price will stop moving down. Markets are about facilitating trade – discovering prices where buying and selling can occur, so if no one is willing to buy and prices stop moving up, then they will go down until a price is discovered where buyers are willing to buy. When there are less than 10 contracts bought from the ask price at the top of a price bar or sold into the bid price at the bottom of a price bar, we describe this as a Single Print at Extreme condition, i.e. there is a lack of supply or demand.

The volume traded in the market shows us very clearly the willingness of buyers to buy and sellers to sell from the number of contracts traded at a given price. When the volume traded by buyers at the top of a bar is small, it is clear that we are running out of buyers and when the volume traded by sellers at the bottom of a bar is low, we are running out of sellers.

When using Numbers Bars, you can see the exact volume traded by buyers and sellers at the extreme of each bar. We are watching for low numbers. To make it easy to spot these low demand and supply scenarios, the Single Print at Extreme indicator allows you to highlight a Forward Projection Zone when we have low buying volume at the top of an up bar and low selling volume at the bottom of a down bar.

For traders that prefer to use bar or candlestick charts, this indicator is particularly useful as it highlights these low demand and supply situations that would otherwise not be visible with these chart types.


Examples

7 July 2016 – ES E-mini S&P500 – The last buyer at the Daily High

This example using a simple 5-minute Numbers Bar chart shows how during the ES’s opening hour on 7 July, a new Daily High of 2102.00 was made at 08:50 and tested in the next price bar. This price bar saw Delta turn negative and a Single Print at the upper extreme of the price bar showing that there were no more buyers at this price. The Single Print provided a good hard stop level and the next two bars allowed for entered with 4-5 ticks of entry risk around 2100.00-2100.25 and the opportunity for a very quick 2-3 point profit. A nice way to build realized P&L early in the trading session.

 


Single Print at Extreme Settings


Input Name Description
Extend Until Future Intersection? Select whether Extension Lines are enabled/disabled for the Single Print price.
Extension Line Label Text indicator for the Extension Lines.

Indicator Subgraphs

Subgraph ID Subgraph Description
SG1 Single Print at Extreme Price Use the Auto-Colouring based on +/- color settings to control the Extension Line colors used for single prints at the bid and ask price levels respectively.
SG2 Single Bid Print at Extreme Drawing Top Use in conjunction with SG3 to highlight a Single Print on the bid for the bar’s lowest price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs.
SG3 Single Bid Print at Extreme Drawing Bottom Use in conjunction with SG2 to highlight a Single Print on the bid for the bar’s lowest price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs.
SG4 Single Ask Print at Extreme Drawing Top Use in conjunction with SG5 to highlight a Single Print on the ask for the bar’s highest price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs.
SG5 Single Ask Print at Extreme Drawing Bottom Use in conjunction with SG4 to highlight a Single Print on the ask for the bar’s highest price. Follow this link for the Sierra Chart Notes about Top and Bottom Draw Style Pairs