Superegos trading posts

Discussion in 'Trading' started by birddog, Aug 29, 2002.

  1. birddog

    birddog

    Well I read with much interest all the fuss about SE. I went through all the posts that he made and found out the following (amidst all the chatter and dribble from everyone else).

    use daily and 15 min chart for daily and intraday trend - trade on the same side as that trend

    do the above for the stock, industry group and the broader market.

    Once the trend is identified and confirmed, trade in the direction of the trend until the trend changes.

    Use volume and stochastics to help time the trade along with the 2 min and the 5 min chart.


    All of the above, is actually a synthesis of the same things that I see written everywhere i.e there is no holy grail, but paying attention to the above really helps.

    I was just looking through a copy of "the market makers edge" by Josh Lukeman - a market maker for Morgan Stanley. He had a chapter in the book that spoke about the exact same thing.

    So in a nutshell, if the stock is below the 5 day ma on a daily chart don't be buying. same thing on a 15 min chart.

    Then use a short term chart like 5 min or 3 min to see the "micro trend" and trade with that.

    Another thing he speaks about is the open index ie short a stock that trades below it's open and long a stock that trades above it's open (for trend confirmation).

    Today, cisco opens at 13.48 down form yesterdays close (13.72). form the open cisco is trading up and at 7am (pacific) trades through the 15 period ma on a 3 min chart (trend change). That is the signal to be long and not think about shorting the stock (I was shorting it the last 3 days). Trade rides all the way to 10:40 am when the stock is at 14.30 and then trades back through 15 period ma to change direction once again.

    Now, if you were thinking about shorting cisco (I was) you stopped thinking that when it traded through the ma. On any pullback the stock should have been bought - by the way exactly what SE was saying about the longer time period ma (in his case 20) being used for support and buying the pullbacks.

    :)