Hey nodoji, Where do you see AIG next week. Seems like its filled its gap between 10 and $12.50 from the March gap up with a strong bullish piercing line candle today. Could this be strong buying or purely short covering? The shorting can easily drive this down more since the reverse split and easier access for the bears to borrow shares. Today's action on AIG chart looks like a reversal, but not convinced since I've seen this pattern only to gap down with the next candle after a day like today...
Short covering alone can't spark a nearly 50% move in a stock. Obviously enough real buyers starting piling in once support was quickly established this morning to start the trend up, then trend followers and short covering continued to help fuel the move. Since it fell so far so quickly, it's still priced as a bargain to those who do NOT believe it's worth $0. I think a combination of the "bargain" perception and those who shorted the stock late in the decline could easily carry it into the $13-$14 range, but I know nothing fundamentally about AIG, so I really have no idea how the big buyers perceive it. Unless some particular news acts as a catalyst, I think the $9's will hold as near term support.
ND, your ES paper trading seems to be on fire. Despite what I may have mentioned to you before, I say go for it. You're not a trading noob, and you've shown your ability to read this market pretty damn well, imho. Ya just have to keep an eye on that volatility, cuz that's what'll get you if you're not careful. Get those feet wet! (and don't settle for any measley .75 gains!)
It really is! I'm using overbought/oversold, trend lines and S/R levels, along with position in relation to moving average channels as my main entry points. It's been like an ATM machine...on paper. I've been warned never use OB/OS, but it's working fantastic, especially with the MA channels as my guide (protects me against useless OB/OS indicators in a trending move). The fact the paper trading is going so well is causing me to have an irrational (really irrational) fear that trading live everything will suddenly stop working. That makes NO sense! But I hear again and again that's what happens...
Plan on it sucking then .... but it won't. You can always go back to paper to get your mojo back if you need to. Ya ya, I know, it's not realistic and all, but imo it's still a good training ground. (Does a boxer never spar? ... do armies not take target practice?) Again, great job!
Correcto-Mundo .....>>>> nod said.... I've been warned never use OB/OS, but it's working fantastic, especially with the MA channels as my guide (protects me against useless OB/OS indicators in a trending move). I do not recall anyone warning you never to use OB/OS. But i do recall someone saying OB/OS is not usefull for trend trading but are doable when range trading. A hot trending mkt will show overbought and keep showing OB until the cows come home. Same for oversold mkts. Indicators are derived from price movement so it makes perfect sense to conclude the indicator designed to work in a trading range will not work in that hot trending mkt. What channels are you looking at? Donchian? Just curious. Indicators are like "pickup" lines at a hotel bar. What line works for one might not work for another, depends on the mode the person is in at the time. PS: Actually Donchian is a trend following 20 period deal, not channels. My mistake. I kind of think of moving averages with filters to cut down whipsaws. but, forget all that, was just curious.
I know folks are going to laugh at my "channels", but I don't care, it works What I do is have both the 10-period and 20-period moving averages displayed on my chart (I use the 10-period for scalping small moves and for alerting me that "someone may want to dance soon"). But mainly I focus on the using the 20-period MA, looking to join a trend-in-progress, or catch a trend reversal. When price rises or falls the candles move away from the 20 MA. When it moves a particular distance away on my chart (1 cm), I prepare for a very high probability trade that should result in either a correction in a trend, or a reversal. A correction in a trend gives you a smaller move back to the MA; if price breaks through or breaks down the MA, then the correction is likely to have become a true reversal. So the MA channel I speak of is a channel I draw mentally (by eye, so to speak) that is 1 cm away from the 20 MA line on my particular chart. Smaller moves away from the 20 MA (1/2 cm on my chart) can also set up nice trades, but you have to be careful not to get trapped top- or bottom-picking; wait for the slight pullback to join, stop above or below the pivot point. I'll repost my STEC chart from the other day. You'll see three fantastic moves signaled by price pulling 1 cm away from the red 20-period MA. 1. 9 minutes from the open, resulting in a quick crash down to the MA. 2. Around 11:05 a.m., resulting in a nearly 1 pt move up. 3. Around 11:20 a.m., resulting in an eventual breakdown of the 20 MA.
Well first let me correct again. Donchian channels do exist. I only was familiar with his 20 period go long or short above or below the 20. That was Richard's "4 week rule". Technical analysis of price movement boiled down is simply "did price go up or down". TA has not changed since computers came out for Joe Sixpack and Susie Saladmaker. What has changed is the interpretation of regular TA compared to pre computers on everyones desk. These days there are vendors and blogs, etc etc spewing out endless versions of why price did this or why price did that. Blogs, Twitter etc are 99% blowhards wanting to be more than they really are in person but on the internet can be larger than life. In ET itself marketsurfer and nitro are just 2 examples. No one will laugh at Nod's approach or anyone elses as long as it works for her or them. We all have our own version of what works and what will not. We all use what has been "OUT THERE" in the public domain for over a hundred years. Those that say: "it is proprietary" or "i will never tell" are just stroking their own ego. The real secret about this game is that there is no secret. The truth about trading will be confirmed by the ones that have traveled the long road to the short destination. The more they learn, the shorter the route becomes. Ok, F1 race today (actually going on right now in Germany but telecast is dalayed), 1500 est will be rebroadcast on FOX. Will not look back in here because like before.........some clown will post the race results. :eek: Remember, computers have not made trading easier, for new traders computers have actually made the game harder because now new traders have a huge pile of crap on the internet, vendors etc to waddle through before they even have a clue how to win at a losers game.
+ $30 Short ORLY @ 39.29 on breakdown through the 20-period MA, in Etrade account because it looked a possible swing position based on the daily chart. Trailed a stop, hit @ 39.09 for +$30. Had a couple ORLY scratch trades on pullback from a test of the HOD, ended up net b/e. Long signal ES @ 883.00 but I couldnât bring myself to do it. Instead of mechanically taking the signal, I thought about it and watched it and missed a fantastic trending day. Later I noticed STEC hitting the high ticker several times. It was above 25.00 on news. I wished Iâd looked at the news earlier because I wouldâve gone long, STEC being totally oversold on the daily chart, but by the time I noticed it, it was stabilizing above 25.00. I thought it would be a good idea to place a buy stop above the HOD because on good news it was likely to test the 52-week high (26.00), but I didnât do it. This wouldâve ended up to be a 1.60/share move that never looked back. Iâve seen these patterns again and again, yet still donât have the confidence to take my signals.
Looked at "STEC" chart. I am not a volume watcher but noticed there was a early RUN in that stock in much less volume that the days end of another price RUN on higher volume. In ES there was volume early, less volume as usual in middle of the day and a pop in volume on the final smallish leg up to the days high. I suppose i am saying there is a difference in volume in a limited supply of stock available to trade and an unlimited amount of cars that can be CREATED on the fly. Would you believe that later you will be able to tell all you need to know about volume stats in ES without plotting volume? Knowing cars can be created on the fly when price does what price will do is all you need to know because between your ears it is ingrained in there what is actually happening. A "developed" understanding of what the other players are doing. Nod, you are not lacking skill, you are not lacking want, you are not lacking much at all. What you need is some motivation from others to meet the challenge. Big HOG was a warbird in WW11. The story is about forming a fighter squadron and this guys first combat meeting with real live jap planes in a dogfight where it was "KILL or be Killed". Tom took on his first jap plane and blew it out of the sky...........Tom proved to himself he said: "The most important thing in that and more fights was "No Buck fever". Tom indeed was ready to go on and become an ACE. I myself when learning to trade read quite a few fighter pilots experiences in dogfights. One second you are in flight in beautiful sky and the next second it is sheer terror when jumped by a pack of jap planes hell bent on killing you. I might encourage you to read a couple paperbacks about Tom blackburns plane "BIG HOG" You see the name on the plane in the back ground. Also Pappy Boyington. Books about confidence and courage in the face of death day after day. GOOD STUFF !!! http://www.acepilots.com/usn_blackburn.html http://search.barnesandnoble.com/The-Jolly-Rogers/Tom-Blackburn/e/9780760322000 http://search.barnesandnoble.com/bo...80891418016&ourl=Black-Sheep-One/Bruce-Gamble PS: one of the pilots was so bored after the war he decided to rob banks for a living. :eek: Exciting stuff : His radio transmitter promptly crapped out and he turned over command of his flight to Chuck Pillsbury. Three other planes had engine troubles and Chuck sent them home. At 1300, Essex's radar picked up bogies - only 30 miles out and closing fast. The Corsairs went after them; Blackburn heard "Tallyho! Thirty Zekes. Twenty-five Vals. Eleven o'clock." Those were the last intelligible transmissions he heard; soon the fighter channel was jammed with rebel yells, war whoops, "Look at that flamer!" "Wow!" and other junk transmissions. (Lack of radio discipline was one of Blackburn's pet peeves.) Another confusing, wild, twisting, gut-wrenching dogfight ensued. Suddenly six Tonys were all over Blackburn, who jumped into the nearest cloud. He circled inside it long enough to get his heart rate and blood pressure down, then nosed out of it. BAM! BAM! BAM! He was hit! An agonized Rog Hedrick pulled up alongside to see how badly he had shot up his boss. He and his plane were okay but by now all were low on fuel. They headed for the barn.