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Trading the Measured Move: A Path to Trading Success in a World of Algos and High Frequency Trading by David Halsey

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CHAPTER 10

Tools for the NYSE

There are many market indicators that have been developed over the years to help traders navigate the markets. In this chapter, we will identify the difference between leading and lagging indicators. We will go over how to use our tools to enter very precise trades with positive expectations during the New York Stock Exchange (NYSE) trading session. We will also learn how to use the tools together to paint a clear picture of the path of least resistance.

Lagging versus Leading Indicators

The difference between a lagging and a leading indicator is that a lagging indicator is telling you what has already happened. Leading indicators tell us what is going to happen, and at what price it will happen. Almost all indicators are based one way or another on moving averages. These moving averages have cleverly been packaged in different ways over the years and sold to traders and investors. Moving averages tell traders what has already happened, and leads them into chasing the market. The goal is to use only the tools (leading indicators) which help us predict future price movement and targets before they happen.

Tools for the NYSE

The leading indicators discussed in this chapter include:

  • Bank
  • Breadth
  • The tick
  • Tick hook
  • Time and sales
  • The trend

Bank

“Bank” is a nickname used for the Nasdaq banking index. It is an index of 417 securities that are smaller local banks, bank corporations, and financial institutions throughout the United States. Our stock ...

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