how do you guys pick tops and bottoms

Discussion in 'Trading' started by dazed101, Dec 7, 2006.

  1. bluud



    being able to pick all tops and bottoms in day trading means an average of 5% return daily

    that is by the end of the year you have:

    (1.05) powered by 365 times your money

    $x * (1.05) ^ 365

    so if you started day trading with 100$

    the next day you would have:

    $100 * (1.05) ^ 1 = $105

    by the end of the year you would have
    $100 * 54211841.57 = $5,421,184,157

    over 5 Billion $


    now what do you think people would give to obtain this indicator (top/bottom picker)


    good trading is about statistics, you trade x when you calculate there is a greater chance for x to move in a specific direction

    and don't forget risk managment

    say tomorrow amd will drop 50c by a chance of 90% so you sell it and you don't forget a stop or stop-limit or ... order at around $21.14
    #21     Dec 8, 2006
  2. With proper money management and an intraday time period you can scalp small correction moves from overextended conditions.
    #22     Dec 8, 2006
  3. Look up a fellow by the handle of ProfLogic. He is an ace at what he does. You can thumb through ALL of his posts to identify what is a Top/Bottom and whether the extreme is major/minor. Most despise his methodology however, having seen it in realtime, it is top notch. Too often peole focus on getting in at the top/bottom instead of realizing how much space is between a top and bottom. Given the space between a top and bottom, it really isn't necessary to catch the exact top or bottom. Any chunk of the middle is fine. I trade a variety of ways and recognize many forms. Being a purist (ie. no indicators), I heavily focus on a projection of volume and how it's PV correlation implies what type of bar is developing now. There a variety of traders here who deal with now (ie. no predictions). You just play what's happening now. I liken it to the forecast. To be successful in trading, it is not necessary to know what is going to happen in the future. If you can simply look out the window and see the weather, that is good enough, especially in trading. Traders tint their trading window with so much unnecessary components. Granted, all trading instruments have their complexities, it is really just a matter of how much your brain can "mindlessly" process at any single moment. Some individuals can only differentiate between sunny and cloudy, or raining vs snowing, or cold vs hot. Differentiating grey areas can be overkill as far as preparedness. The point is, to be able to identify tops and bottoms, it is absolutely necessary to have a "clear" window that accurately identifies what and where is a top/bottom. Again, ProfLogic has one such window which he and many others eat and live by.

    #23     Dec 8, 2006
  4. LT701


    all depends on how she's dressed
    #24     Dec 8, 2006
  5. In gerenal I don't pick them. They just hit mine. :D
    #25     Dec 8, 2006
  6. dac8555


    i wa going to say "with a great deal of frustration and alcohol consumption"...but i think you said it better.

    picking tops and bottoms is a great way to cause yourself a great deal of pain.

    It is ok to tryo to catch 60-80% of a move...but trying to do much more than that and you get beat up pretty good.
    #26     Dec 8, 2006
  7. bluud


    there you go, that's a fairly accurate top and bottom for amd
    today's high was $21.15 and low 20.69 [46cents, almost 50c]

    i actually bought at 20.70 (just lucky)!
    #27     Dec 8, 2006
  8. socalpt


    Look for pull backs to enter and jump off when it's begining to turn around; it's much safer that way.
    #28     Dec 8, 2006
  9. On a longer term timeframe picking tops is really hard... you can do it in extreme times of emotion, like gold ~$700, but even then you'd have needed a nice wide stop. The market can remain irrational longer than you can remain insolvent.

    Intraday, tops and bottoms can be found by reading the tape. Sometimes you can watch how a stock is moving and see that a big buyer or seller is pushing it; when that buyer or seller stops, the behavior changes; then, when someone steps in the opposite direction you can usually find the bottom or top. Remember, though, that finding a top may not give you a trade that runs as long as the trend to which you're picking the top did; it might just be a top before a correction or a period of consolidation. Picking tops and bottoms through tape reading requires extensive experience and a good feel, and still isn't anywhere near 100% because you can get tricked or someone can go market with 200,000 shares and fuck you over, but in my opinion it's easier to find a top or a bottom on an intraday basis than from technicals on a longer term timeframe.
    #29     Dec 8, 2006