The Caddy trade is an excellent way to drive the market. I see it as similar to driving a SmartCar. Get in, go, it makes the turns for you. Your decision is when you want to go. Otherwise, sit back, enjoy the ride. Could you get there in a million other ways? Sure. But who cares, you got there too. And the idea of slope is perfect. Subjective yes, but simple subjective. Lol, sounds like a grammar term... ! So you take the SmartCar for a drive when there is a good slope of the longer average. I mentioned the same way back in this thread. Nice one Banker. Wear your seatbelt though, (put in some stoploss even if well away from the market) just in case.
This is the solution I came up with for now. I draw in what I feel the Cadillac would be showing me. Banker
Thanks In and Long, I'm glad you enjoyed the simple method. Simple doesn't mean the trading will be easy. For after all there is no easy money in the markets (or at least not for long). When I started drawing in the Caddy, I find the constant interaction with the charts is really wonderful. I mean once you put in the little mini slopes (swings/reactions/whatever you want to call them) it really keeps you focused. And then when you step back and look at the chart, it shows you the overall picture. While trading I think about the bigger picture, yet it makes me more comfortable to see the little stuff too. Just kind of like checking on the Caddy to make sure the driver isn't drunk. Have fun with it, and keep it simple, Banker
I missed seeing the breakout excitement when I drove the Caddy by itself on the chart. It's fun to watch people fall all over themselves and dash in to buy or sell. Banker
It pays to have the Jeep and the Caddy. At least for me. Then either the tight or the loose trends can be played properly. Banker
Sorry for taking so long to answer, Prox, but I've been away for a week. I trade the NQ because I like the volatility. I haven't intellectualized it, so I can't offer an elaborate explanation. As for the ES, Mike uses a 1pt breakout and a 3pt stop. He also uses a 2pt breakout on the NQ but a 4pt stop. However, I found that the 4pt wasn't enough (actually, it should be more like 8, but rather than set such a wide initial stop, I'd rather get out and re-enter since entries are a matter of both time and price, but that's a personal choice). I've found 5 to be a good compromise. As I've said before regarding stops (initial ones, anyway), if the trade is a good one, stops are nearly always irrelevant since price will never come close to coming back far enough to trip them. What you want to do is find a level that, if tripped, tells you that you were wrong to enter when and where you did. 5pts performs that function for me. As the NQ rises in value, this will have to be revisited, but I'm not going to worry about it until the 5 no longer works. --Db