New stategies for current market condtionss

Discussion in 'Trading' started by limbo, Feb 11, 2001.

  1. limbo


    RTharp has made mention of how current market conditions have made him change or shift trading stategies to earn profits-"had to stop trading breakouts as most fail in a bear market"--I'm hoping other traders will voice an opinion here as to their adaptions. Can we rely on TA as much-in such a choppy uncertain condition-or do we concentrate more on TA-and specifically what forms of TA etc. work best at this moment. Much thanks
  2. I still use TA for my trading regardless of what kind of market we're in, as the concepts of support and resistance will always be valid . The difference is in recognizing the probabilities of different kinds of moves in a bear market versus a bull market. For instance, in this bear market, a stock that rallies up to a resistance level is much more likely to be repelled off that resistance, whereas in a bull market it would have a better chance of busting through. Conversely, in this kind of market, a stock approaching a support level is more likely to break down through it, creating a shorting opportunity. The bottom line (at least for me) is that in bull markets you can buy the dips and breakouts, and in bear markets you have to short the rallies and breakdowns.
  3. Hi Limbo

    A lot of my old strategies don't work like they used to. (I miss those days)

    Technical Analysis still works. It shows patterns of human thoughts, human psychology. Psychology of the markets and of the traders trading the market will never change. Some of the old patterns still work but are a lot less common.

    The key to remember is risk control. You want to be able to trade another day. No trade should ever be able to wipe you out.

    Lately I've been playing a few different strategies. Problem is they take some time to learn. I'm getting used to playing channel trader on INTC and a few other big caps. They have huge intraday support and resistance. I'm not used to this strategy but I can trade a belief that INTC won't go down 20 points in a day. I'll keep stops to protect myself in case I'm wrong (never know)

    Lately I'm playing the reverse and fading breakouts intraday. The exact opposite. This market is somthing I've never experienced before. Markets move in cycles and someday we will be in an easy to read market. I use rigid risk control so I'll be around when that time comes.

    Robert Tharp
  4. I think zboy is right on. You can't expect breakouts to always work... Resistance is much more valid now. Look at it instead of as a buying point in anticipation of a breakout but as a short point, with a TIGHT STOP!!! I think that now swinging from support and resistance zones is much more lucrative. Also buy and short the oversold/ overbought conditions. Rtharp is also right. You have to do the opposite lately. And maybe these times are better for larger accounts that can take a move down in intc, and pyramid it so that a half pt bounce is a decent profit. Fading in a pyramid fashion is truely the way to make money lately. It hurts at first though, and you have to get used to it. But that's all that seems to be really working.
  5. Carl J

    Carl J

    rtharp or anyone else,
    This is a little off subject but since you mentioned INTC I was wondering what execution route would be fastest on a 1000 share buy and sell. Would it be any different if you were going to short then cover.
  6. limbo


    A big thanks to all three of you guys (so far)--Z,Robt T.and Prae for the commentary and insights. I'm pretty clear on Z and Robts positions, however Prae would you elaborate a bit from the point in your post--"And maybe these times are better--------And what is fading in a pyramid fashion?-please--Thank you
  7. carl. Just execute on island. The island spread on intc will be less than 1/64 normally. As for pyramiding. that is just buying more shares each time you purchase as teh price goes down. But if you are going to buy like this...800, 1300,2000,3000,4500 or so on intc for instance every 3/8 down, you need a big account. But i know people with large enough accounts who bank like this. just fading means you do the oposite of the move, and profit off the bounces
  8. limbo


    I understand--thanks
  9. RAY



    Funny, but that is what I am doing right now...

    Fadding INTC, TXN, and AHAA.

    Seems like the thing to do now, or I least I hope so! ;)
  10. best stock to fade is glw... he moves it .5-.8 over and over all day.. .just avg into it.. and you can grab 5k like buttah.... i don't think ahaa will be liquid enough, and im not familiar enough with txn.... but i think glw's range is wider
    #10     Feb 12, 2001