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New content added 6/6/10.

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The first chart is a 1 min ES and there you can see how divergences of All Trades lines with the price lead to changes in the direction of the price. If the signal is countertrend you can use them as a short scalp or as a profit target point. If the signal is with the trend, you can let it run and take profits when a countertrend signal appears. All signals are very low risk trades. An interesting point to pay attention is how a divergence formed between 8.29 and 8.42 and right when the price was making a new low, there is a big lot red dot (big selling) followed by several big lots blue dots (big continuous buying) showing how the last traders short were trapped there fueling the reversal to the  upside with their stops. Price never looked back down again. Divergences with the  big lots line are a warning of the reversal but are better confirmed with the following divergence of the AT line.

The second chart shows the same time spot, but in a 200 tick chart.

Both charts use 100 parameter for big lots.

 

The ZF chart shows how price again trapped many shorts at 9.13, with divergence  but big buyers had not appeared yet so it preceded the pullback.  At 9.50 the last sellers were trapped upside down while the buying frenzy started and continued until the next divergence at 10.14, where it bounced at previous resistance.. Parameters for this is 50 contracts.

 

This chart is the combination of biglots and biglotsBlockalerts.

BiglotsBlockalerts is configured to give audible alert with lots above 300 and also print them in the alert window.
Biglots is set for 100 lot and low medium and high values are 1 2 3, respectively.

What I try to point here is that when a biglotalert dot appears in the window, it has more relevance when it is accompanied by a biglot triangle, as I have marked with rectangles in both the dot and the triangle.

I also observe the divergence between price and biglots All Trade lines, which I have marked with D and DD for double divergence. Double Divergences are points where a pause in the trend is going to occur or maybe a reversal as you will see.

Time analysis:

9.03 4 big lots break resistance and set the price for take off. (348,500,448,443 lots)
9.05 - 9.08 price continues to rise but there is a first big lot selling at the end of the first divergence. Good for taking profits. At double divergence I will get out and try to go short.
9.10 big sellers appear and send the price down, confirming reversal  (500,300 lots). Good to go short if not before.
9.14 Double divergence warns me to take profit, and price pulls back.
9.16 another divergence now with the trend warning trend resuming.
9.18 300 lot selling fuels the move to the downside.
9.20 300 more selling fuel.
9.22-9.24 Double divergence, take profits and consider going long for quick scalp since big buyer appearing in confrontation with another big selling order. Actually it made an extended pullback. Notice it bounce where buyers entered at 9.03.
9.35 It again test support with Double Divergence an a big 906 selling order that couldn't move the price lower.
9.42 Another dot (300)signals interest in selling but was not confirm by a triangle, even though it worked.
9.56-9.58 Big buyers leave their marks (301,316,300,356) but no triangles. They enter to reach the previous high and finally break it, but first divergence was forming. A bounce at previous high level 1055.50 was worth the try,previous to Double Divergence.
10.02 Big order breaks the last high but movement is very extended.
10.08 big selling order but at the same time of first divergence.
10.13 Second divergence preceded big lot buying that took price to test last high.
10.15 Another big selling order testing high, that preceded a reversal.

Arrows indicate those points where trades where confirmed by dots and triangles and followed double divergences.

 

More BigLots/BigLotBlockAlert combination

Divergences and BigLot Alerts

I think DD are the best trades and if they are confirmed by biglotsblock alerts (dots on the chart) in the same direction of the divergence. With those expect to take more than a quick 3 tick scalp and aim for 2 - 3 points and sometimes aim for runners.

9:53 Buyers appeared , breaking previous resistance. Just wait for the pullback and divergence and go long. (Big Arrow Up)
10:03 Another big lot 389 breaks last resistance just to encounter a extremely big order selling 728 with divergence. Take profits and reverse short.(Big Arrow Down)
10.20 Double divergence to take profits.
10.31 Multiple buying orders set the pace for the upside again. 329,400,400,322. Good point to go long.(Big Arrow Up)
10.45 One of the buyers stepped out (400) but pressure remains to the upside. and price takes off to test previuos resistance again, good for profit.
11:05 Price breaks resistance with divergence and no big participants, just to see big orders to the downside appear. 317, 500. Small lot traders are trapped long. Now we go short.(Big Arrow Down)
11:16 Double divergence, to take profits.
11:35 Now double divergence to the downside, looking to go short.
11:46 Battle between one long 500 and three shorts 389,386,400. Shorts outnumber longs and price falls. Go short(Big Arrow Down)
11:53 Double divergence to take profits, that does not stop price until next divergence at 12:08

6/21/10 - Another example. ES contract, 139 tick chart, above.

8:13 - 8:19 Started watching the market late, but in this range of time there were only big sellers until 8:19 when a bunch of big buyers appeared, just after big sellers finally broke yesterday close level. Not sure who had more power even though I saw divergence and price bounced up at YM yesterday open.

8:19- 8:23 Divergence down, more sellers trying to send price down and finally make it.

8:27 While price falling, divergence up, and price stalling at yesterday low, then I see a big order buying of 500 and just place my entry that was filled for an immediate rise to take 4 tick profit.

8:31 Following the established downtrend, I placed a down arrow at yesterday close level where divergence down could have triggered a short trade that broke the level where I previously took the long trade.

8:38 -8:46 Notice how price tries to break previous lows, just to show extreme divergence (hard breaks) and many big buyers appearing everytime price moves lower.

9:03 Hard break divergence again, that makes price rally to break previous resistance levels.

9:17 After breaking previous day open level, price retraces and takes off at retest. But no big buyers around so I stood out.

9:45 Divergence down signals time to get out.

9:48 I now notice Hard breaking divergence good to take short trade if big sellers where around.

I have added Biglotsblockalert twice in the same chart:

1. The left configuration works with lots above 275 contracts. It plots a small dot, prints lot quantity and plays a sound.

2. The right configuration only plot a big dot over the small dot, when there is a lot of 400 or more contracts.

This is the configuration for BigLots indicator