Depends what you think of your friend I suppose. Bottom picking is hazardous. I don't think it's because it can't be done but you will not nail it every time. It does seem though that bottom pickers and top pickers are at the firmly entrenched in their opinions end of the scale. I know because I tried it for years. It can work but like any system, the danger is in admitting that you are wrong and changing course. Easier said than done.
Yes it is possible to pick bottoms and it can be very profitable~ I cannot tell you if this is the bottom bacause I will not know until after the fact~ Publias
The wise trader will entertain the possibilities of both directions without becoming attached to them~
I'm the only one that answered yes its possible, and yes this is the bottom. i wonder if thats good or bad? I can see i'm gaining in popularity on ET.
Yes, Lundy, you are gaining in popularity here....Daytrading is essentially a zero sum game, and we are taking your money!! P.S. The Dow was down 266 today. I thought we were at the bottom weeks ago? What happened?
Just keep putting in your stabilizing bids so I can whack the shit out of 'em! ________________ Bears, Let's Rock the House!
It is definitely possible to pick the bottom. Everyday just predict that this is the bottom, at some point you will have "PICKED" a bottom, so this would prove it is definitely possible. Can bottoms be picked consistently enough to make more than you loose attempting to do it? This might be a better question. It may depend on the time frame. Every day, as a directional trader, (using 1, 5 & 15 minute charts with various indicators and averages and many of the relationships also mentioned by "Super Ego" [as he points out the angle/direction of the five bar moving average is very important, and I find this to be true on any timeframe] I make decisions that could be considered attempting to pick bottoms or tops on a short term basis. I use a money management approach of normally three incremental entries and normally one or two exits for a position. Depending on the setup: this &, this &, this &, etc. I reach a confidence (PROBABILITY) level that I will be able to exit the trade with a profit (given a reasonable stop) I take 1/3 position. I will add fairly quickly as my first position becomes profitable. I use a two stop approach. The furthest away that is in stone and will not be changed, which generally gives me a reasonable expected risk, and the nearest which I can and do change depending on the development of the conditions in the setup. By doing this I am able to exit many positions with a very small loss or even a small profit even though they do not follow through as expected. Many of my entries are at pivots, extensions, retracements and other "POTENTIAL" bottoms or tops based on the intraday time frames I am trading. These are at the same time both my most profitable and least probable entries. The setups which require confirmation are less profitable but much more probable and make up a much larger portion of my profit. I am only comfortable doing this intraday. I have learned from experience that there is much greater risk with this (bottom picking strategy) when carrying overnight. The last time I tried to pick a bottom overnight I had sold my WMT in August in the low forties as I recall. Late one Friday three minutes before the close it broke under $30. I bought back in at 29 7/8 (what a bargain, lots of things told me this was the bottom or at least close enough) The first trade Monday was $20. This was October 1987. Lundy, I am interested in your indicators and approach. I was interested in Super Ego's approach and indicators also (and still am). I think anyone attending a seminar by Oliver Velez, Tony Oz, Chris Manning, Larry Williams and many others who learns nothing is either asleep or ONE SMART SOB. I have learned almost everything I know about trading by standing on someone else shoulders and peeking in. Most often I take what I have seen and adjust it to fit my (current/changing) style. There are definitely many ways to skin this cat called the market. I enjoy elite trader (especially darkhorse) and don't post my fair share but I do learn from this site (some threads at least). Good Luck Everyone (especially Lundy you're going to need it just kidding you) If anyone wants to help me become a better more profitable trader I am all for it!!!
sigh⦠it's possible to win big money at russian roulette. it's possible to safely piss on an electric fence if the current is turned off. it's possible to stroll Harlem in a KKK outfit and not get killed. so what. if an eighteen wheel semi slams on the brakes, how many feet does it skid? depends on the brakes. depends on the tires. depends on the load. picking turns is an information game. how much room do you give it? plenty. some things are simple. macro analysis is NOT one of them.
4 ways it's likely to occur. 1. A spike technical reversal on some chart parameter. Likely to be obscure, so need to watch BIG chart patterns, log trendlines, 2. A congestive bottom of some sort at low prices. 3. When it gets soooooooo oversold, just gotta be value NOW. 4. When some external event causes a shift in psychology. That used to be interest rate drops. If it's #1 or #2, we all have a chance if we're paying attention. If it's #3, or #4, gonna have to be really lucky at calling it. Pray for #1 or #2... like my grandpa does every morning. (He doesn't like to get backed up, if you know what I mean.)