Hello! Since my little "discussion" with Tony Oz, I decided to give it a shot at mastering Skyscraper and Bottom fisher setups. Cant be that hard.Heh...couldnt be further from the truth!!! One major thing I just dont get . -SCENARIO 1. Stock is in a downtrend, riding the rails (lower BB), RSI, Stoch say oversold. One up day appears. Normally, we enter above the high of that day, stop below low of that move down. -SCENARIO 2. Stock is in an uptrend, riding the rails (upper BB), then reverses down for 3 or 4 days. 5th day is an up day, so we qualify it as a bottom fisher and go long above high of that 5th day, stop below the low of this small dn move. WHICH ONE DO WE TAKE? I didnt get the chance to ask Tony this as he left without the Q&A session Also, my problem is that I just cant find one setup and try mastering that. Could anyone give me a general overwiew of things and which work better in what market conditions (for ex. BULL MARKET- Breakouts from flags/pennants) etc. and some place where I could read about the fine tuning that particular setup you re recommending. Thank you very much and good trading! Alex
In a bull market I would want to go with the second play for a swing trade. The first one will likely react up for a day or two at best, then test the lows. You might enjoy www.hardrightedge.com. Lot of info on swing trading.
Although I think I'm wasting my time I'll offer one more piece of advice. You seem to want someone to tell you exactly what to trade and exactly when to trade it. Ain't gonna happen Alex. I think you have a totally unrealistic perception of whats involved here. If you study Skyscrapers and Bottomfishers for a few months you may get an idea of how to trade them. Your certainly not going to do it in a few days. My advice is the same as I posted in one of my first posts. Stop looking for setups and start studying the market as a whole. Watch it all day every day for a few months. Pick an instrument (I reccommend the Q's) and write down the price every 5 minutes (thanks LBR) until you develope a feel for support and resistence levels. If, and this is a big IF you are eventually able to tune into the market, trading becomes doable. If your in a hurry your in the wrong business. Just my opinion.
neo, Having read most of your posts I feel exactly the same way Nicodemus does with regards to how you are approaching things. I know you're not going to like it and will probably resist it, but slow down, carefully listen to what he said, and follow it. Otherwise your next 100 posts will be more of the same-o same-o "is this a good setup", "should I get in here", "where do I get out", "please tell me what to do", etc. etc. etc.
K, guys, I must say I agree with you... Its just that there is SOOO much to learn and I have a feeling that its like more frustrating the more I do it. Ill try not to overflood ET with my posts and will cool my spirits. THX for the advice! Alex
neo, It seems to me you are so afraid of losing your capital that you have to keep asking others whether this or that is a good setup or not. If the $4000 is your nest egg, and you can't afford to lose it for any reason, I suggest you not to wet your feet in the markets. Since I began to trade in September 2000, I have lost close to $5000, not to mention the few thousands more I spent on data feed and trading membership services. It's not much compared to people with a lot of capital, but the truth of the matter is I don't have a lot of cash reserve to begin with. I believe that's even more so in your case. I consider myself to be relatively well-disciplined, and I've read no small number of books on trading and technical analysis. During those days when I traded full time, I spent four hours at least in the evenings to study the indexes and look over hundreds of stock charts for setups, and dabbled in the fundamentals if and when necessary. Still, I haven't achieved profitability in this type of market. I have scaled back these days to regroup and gone back to teaching part time. What I have learnt over the past year is that your whole life matters. For instance, if you are desperate financially, you are already psychologically at a disadvantage. And if you don't have a balanced social life, you also tend to lack the kind of confidence necessary, for example, in quickly cutting your losses. Trading is in the final analysis about your self and how well you handle your life as a whole. Trading is not just trading, remember. The markets are too fascinating to quit and I want to be successful eventually. But I am prepared to accept defeat if it turns out that I can't make it in the markets--in spite of the fact that I have spent so much time to learn the ropes, so to speak. Alex, that's something you have to be prepared yourself. After all, 85% or more of people lose money in the market, and there is a high chance I belong to that group, rather than that 15%. Moreover, Goliath and the big boys with full body armor always rule, not the David with a slingshot when it comes to the market. And you and I are the David's. stockoptionist
Neo, I can understand you're worried about losing your trading stake. Why not paper trade for a while and see how you do? Keep realistic fill prices and see how you would handle the trades. It's not the real thing but it beats losing money you need.
Neo, Indicators help us...they may be lagging...but they help us to determine which way things appear to be going or might go. Chart patterns do the same thing...give us help in determining which way things might go and in what direction...take for example bottom fisher...its nothing more than a chart pattern with some down days in a row and then one up day...this gives us a visual indication that the stock has bounced and may continue to go back up....which one do you choose?...Obviously...this one implies that you would be going long, expecting it to go up...but how is the market THAT DAY...how is the TREND that day...are the futures up in the morning...is there good heavy bull type volume that day? If all indications are good then the more likely your chart pattern (Bottom Fisher) will play out the way you thought it would go. In the past few days the markets have been down in the morning for the most part and then rallied in the afternoon on strong volume and good strength...if you had blindly played a bottom fisher pattern first thing in the morning you would have gotton killed... that is if the market continued to go down....if you had waited and studied the trend and jumped in on the low of the day you would have done great...provided you were caught up in the rally...timing of your entry is critical...stop looking at the money...wait for a good set up before you pull the trigger ...make sure everyone is buying long...if the set up is not there...oh well...there will be another time...just be patient and wait and make sure you are right.