Mad Day Trader Bill Davis Webinar – August 19, 2015.
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Transcript of Mad Day Trader Bill Davis Webinar – August 19, 2015.
![Page 1: Mad Day Trader Bill Davis Webinar – August 19, 2015.](https://reader034.fdocuments.net/reader034/viewer/2022051517/5697bfd01a28abf838caacad/html5/thumbnails/1.jpg)
Mad Day TraderBill Davis
Webinar – August 19, 2015
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I want to continue thediscussion of integratingthe price levels from the
daily updates and how to relate them to the market.
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I will demonstrate using recentprice action on the VIX &
the S & P 500.
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The VIX will apply to all majormarkets, including the
Dow, NASD and the S & P 500.
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For trading purposes, usingthe DIA, the QQQ or theSPY will work. I generally
prefer the SPY, but the QQQmaybe better suited to you.
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As way of demonstration,On Tuesday around midday,
here is a comparison ofthe at the money options
for all three major markets:DIA $175.74 - $175.50 Call-$.78 $176 Call- $$.46QQQ $111.34 - $111 Call - $.73 $111.50 Call - $.44SPY $210.42 - $210 Call - $1.09 $210.50 Call - $.78
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All three instruments haveoptions in 50 cent increments.
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Let’s compare the AverageTrue Range (ATR) forthe three markets:
SPY $1.97DIA $1.71
QQQ $1.37
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As you can see from the priorslide, the SPY has an ATR$.26 greater than the DIA
and $.60 greater thenthe QQQ.
This mean is has a greaterchance to cross multiple
strike prices in 1 day!
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Let’s see how we can applythis using the VIX & SPX
levels … I will show a30 minute chart of the
VIX and the S & Pwith their levels.
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Another way to scalp tradeusing this is to scale down
to a shorter timeframe, likea 10 minute or 5 minute
chart and BUY theoversold conditions off
that timeframe.
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Here is a 10 minute chartduring this timeframe …
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I will show how you canuse the levels and
scale down even furtherfor intra day tradingusing yesterday as
an example.
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Today I would like toshare one other pattern
that can behighly effective.
It uses the extremebollinger bands.
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The extreme Bollinger Bandsuse a 253 day setting,with a 2.576 setting.
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This setting replicates approximately one
year’s worth of pricedata, and shouldinclude 99% ofthe data set.
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There is a 1% chancethat price should exceedthe top or bottom band.
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I interpret this to mean that it is a highly unusual
event when thetop or bottom
extreme band isviolated.
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One of the best patternsfor short term trading, is
when the 60 minute chartis in an uptrend and the
price gets under the lowerband on the 10 minute chart.
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Let me show you afew examples …
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