This is two pics of the same stock that i was looking at today. At the end of the trend , i noticed that there was two long bearish candles(bearish here means blue) with a really long wick which indicates to me that the bears wanted to really push this stock downward but couldnt, making me believe that this stock has a lot of potential to go past the resistance. Do you guys (just on the thinking part) think that my thought has some validity or is this a really dumb way to think?
[QUOTclay, post: 4157061, member: 489057"]this is what ive been doing. Ive been mainly watching for a consolidation toward sideways and if i start to see a slow gradual move upward i then start to look for signs that it will breakout.[/QUOTE] The ametures buy the breakout, the people who know are in before, and the people who think they know buy the pullback after the breakout and get caught out
What do you mean by getting caught? And the two charts that i just posted i did buy into it. But now im wondering whether this might have been a mistake.
Personally, I find BO's too risky, to many spike and reverses you just end up paying a stupid price and having to have a huge SL so it could retest previous low, which can be a way down so exit on a trap comes kinda tricky. You need 2 variables :- 1.underlying momentum so longer term but not so long as to be irrelevant. Only trade with this ofcourse. 2. short/immediate term moment, if 1 is up then 2 goes down, flattens out then buy near the low's tight SL or buy on the turn up same SL under the prev low. If the up move works, you'll get to prev high or a 00 number, then it's either take your profit at the risk of missing a large move, or let it run at the risk of a quick reversal. That's my current working and thinking on the subject anyway.
amazing the first that i bought into jumped up and i sold it right when it did at the 3440 (3.40$ in dollars) mark. made 33$. the second i never bought into and thank god cause it went down, but not by much.
Trendline breakouts I seldom every due as risk is too great and often times false, now longer amount of duration and number of touches of the trendline, has to be at least five hits of trendline would I ever consider. But I prefer the breakout for confirmation then retrace to shake out weak traders, then get in with tight stop. If it doesn't retrace, many other stocks or markets to wait for.
Handle rather than trendline trading i look for patterns mostly or atleast starting. I made about 10$ today on a bullish flag that i traded and was pretty happy. But you said you prefer the breakout,retrace and then buy but couldnt it go back down again and not breakout?
thats what i worry about. i think all my worrying though prevents me to becoming a better trader. all the what ifs and oh craps. i really wish i had the confidence to see a trade and just go okay this is good. i guess that comes with experience though