Successful trading is about one thing----Prudent Risk Management----this is the only true edge in trading.
Here is a free tip for everyone. Look at the chart below, and notice how the price is fairly "tight" all the way along the trendline (resembling a tight channel). Dan Zanger calls them "frozen ropes". When these "frozen ropes” break (on EOD TFs), then these trades usually have very good reward to risk. And yes, these are against the trend reversal trades, and therefore the channel needs to be tight and one needs to be able to read PA as well, and not just trade the trendline in vacuum. Another use for these “frozen ropes” trendlines is to use them as warning. Say if you’d be long in APPL, and you’d see this frozen rope, then it would be prudent to exit or replace the stock with a Call because the drops can sometimes be huge.
%% BEST trends hug moving averages ; ropes are seldom that straight for long, especially in SEPT. An apple a day keeps the doctor away
Not "trendline", just more basic "buy support, sell resistance" Price TA off the same chart. 25 points up off of "up arrow support"... 25 points down off of "down arrow, matched high, resistance"... 50 points round trip... There's currently a "matched low at 4514... might be ANOTHER 25 points potential if the market reverses back up off of this support... we'll see. (Lamenting my option plays didn't do this well today... ) And some of you have no interest in learning this?? (Yes, I'm needling on purpose.... to shake up the dumbasses who whine, "TA is BS" and "TA doesn't work"!) Update..... Bought matched low at 14 out at 08 -6 Support doesn't ALWAYS hold, you know...