Discussion in 'Trading' started by jripper55, Apr 27, 2008.
I am short HAL at $45. Thoughts on where this is going?
Going straight up to your stop and then back down to $45.
what say you?
ready for a retrace.. then get long again.. for the break aboe to new highs..unless sp500 starts selling off hard. IMO
Looks like it's ready to retrace and test to see if 42 is resistance turned support.
If the retrace is on low volume and last resistance is in fact support, go long.
Surprisingly little technical strength in many previous moves, given the chart, there is a LOT of bearish divergence on this move.
Consequently, expect a blow off top to draw in the suckers before any serious downside action.
and you said you were a floor trader for 8 years?
what exactly were you trading?
Personally, I'd keep close tabs on it. The recent breakout above $42.00 portrends a measurement at or very close to $58.00. The lower risk "in" would be to go long on a move down to prior resistance (now support) in the $42.00 with a tight stop.
If you believe in your current short position, the only objective move would be to slap a stop on it slightly above the most recent highs.
No need to look at volume on a "RETRACE". Price action alone tells you what is happening.
Here is how it works. You get a breakout, the breakout of price gets attention and if price was up then you can see different groups of price followers (what else do we play this game for) do what they will do when fear or greed grips them.
Above the breakout STOP LOSS orders could be hit and that is buying. New longs will want in with BUY STOPS. Some previous longs might add-on.
With all that you should see a LEG UP. Ok, fine and dandy, now depending on the momentum you watch price action and observe the speed of price changing. Is price still climbing? is price rise slowing? Is price stalling? These are your clues to tell your intuition what is possible coming next. Your intuition tells you the price rise (or fall,some of us trade futures) is, has run out of ammo and the troops need to regroup to get more ammo, food in belly rest for further advance. A Army should never advance faster than the supply and reinforcements.
Think of price in the same way as an advancing Army. After a fast advance price needs to settle down to regroup and prepare for another advance........thus the retrace is a NORMAL expectation of price action. No need to be distracted by observing volums, (volume follows, price leads).
A shallow retrace after a good, fast advance means the continuation can be expected. My personal rule is to stay long if the bull leg does not retrace more than 50% as a worst case retrace of the previous leg. Expect 3 legs as being NORMAL. (This is for the ES )
Volume is overrated and actually shows the TRADER there is more work to be done watching price alone and letting price alone IMPRINT on the brain what to do about price when price will do when price does what price will do.
Remember this: Intuition is what you strive for, automatic trading. To IMPRINT your rules, signals etc within the BRAIN, KISS works. My brain has small capacity so i dropped indicators as learned. The truth about indicators is not finding which ones work but finding out that aside from price alone ALL INDICATORS are useless. (not intending to open another can of worms).
Kiss works, kiss imprints the brain. Do not reinvent the wheel.
Today, "Break a Leg" ..
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