How To Tell Market Bottoms/Tops?

Discussion in 'Trading' started by xrod55, Aug 1, 2012.

  1. xrod55


    Are there any basic ways I can estimate where a bottom will hit and where a top will hit?

  2. if a bounced off a low of X price, it is a bottom
    if b dropped off a high of y price, it is a top
    or just think those so far lows or highs as bottoms and tops.

    for an intrady, so far the high/low can be thought as top and bottom.

    if you bottom fishing, wait it boounces off low, buy

    if you top short seller, wait it peaks off high, sell

    easily said, but hard to pindown, since the market is fast.

    like today, qqq, it hit 63.91, then bounced to 64+, I bought some calls, thought it is a bottom, then I saw 65+, late 64.8, I think that is a top, sold my calls, bought some puts, when it retarced back to morning low, I sold my puts, thought it is a support, it will bounce.

    hard to pindown, I made a mistake in USO, when it hit 33+, I thought it just started, I bought 32.5 calls, late it backed off to 32.8~32.7, just oh my god, I know I bought a top, sold to cut loss.
  3. You can't tell with good accuracy, otherwise 90% would not lose but win, and we know that's not the case.

    The market exists to screw the most amount of people as frequently as possible, not the other way around.

    It's a losers game unless you are special.
  4. Think like a Banker.

    Where is retail going to have their pending stop orders set?

    Who does wholesale take the other side of and how does wholesale get filled on their massive orders?

    Watch for patterns in price, and volume ,

    DB DT trip top, trip bottom, hammers inverted hammers, h and s, inverse h and s, ATR ,exhaustion/climax, pace, time of day, session high/low, oscillatory tendencies/filter/data ect.

    Lots of ways to find tops and bottoms, first define your timeframe, then define pattern within that timeframe.

    Most importantly there are only probabilities, never certainties. So manage your risk as such.

    Today I took a small risk as usual and was rewarded more than expected. I had no idea if this one trade would work until it did, assume every trade will be a loser until proven otherwise.
  5. Trend Following

    Trend Following Sponsor

    They are clear only in hindsight.
  6. hft_boy


    It's not exactly a sure thing, but look at volume. Like, if you go look at the charts, the low in (December) 2008 was also accompanied by gigantic volume.
  7. Bigger volume than usual "could" be a sign except volume can keep increasing as the trend continues and now what looks big, is not as big as we thought it would be and so forth.

    I agree with the sponsor above, in hindsight it's all very clear and easy, that's why people lose, because it looks so damn easy in hindsight, yet it does not work for crap live and the proof is that almost everyone is a consistent loser. People want to blame discipline, but even with strong discipline, people keep losing.

    The real winners are the brokers, the salesman, the underwriters, the companies going from private to public, and all the peons around them. Retail is screwed and always will be.

    The funny thing is when others claim the contrary but they swear on secrecy and can't or won't do anything to prove otherwise against those that see the bullshit.

    All smokes and mirrors.
  8. There are an infinite number of ways to estimate.

    None of them work reliably.

    And that should be obvious.
  9. Handle123


    I have been using Monthly charts long time with RSI to show divergence. I use also, New highs/lows to to confirm highs/lows are in.

  10. When your broker says "This could be your last chance to buy at these prices", it's the top, and when your broker no longer answers the phone it's the bottom.
    #10     Aug 2, 2012