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Strategies & Market Trends : DAYTRADING Fundamentals
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To: David Lind who wrote (2587)8/9/1999 5:49:00 PM
From: TraderAlan  Read Replies (1) of 18137
 
David,

Every standard pattern is well-known these days and routinely violated and reversed (just look at YHOO last week) just to shake out those who jump on them. Traders these days relying on patterns (myself included) ALWAYS have to factor these violations into the decision making process. For me, it means standing aside on almost all common pattern breakouts (well some I don't <g>) and waiting for the fade to show up. The good thing is that a stock usually will eventually move in the direction predicted by the pattern. But the TRADE isn't "at the neckline" or "at the apex". It's jumping in when you see the shakeout has been completed.

I have this trade called the 3:30 F** Y** low. It's where a stock stands a classic breakout point at 3pm, plays with it for 15-20 min, pops a tick or two into nirvana and pulls back and THEN drops like a rock into 3:30pm. Find the right support/retracement and buy the stock (in a OK market) and it usually finds it's way back through nirvana by closing.

The bottom line is that there aren't any free rides in today's markets but serious traders (technical, LII and fundamentalists) already know that and are willing to take the game on its own terms. For every market edge that is no longer reliable, another one has just been created that will make you a lot of $$$.

Alan
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