DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: wallstreeter who wrote (2779)	8/14/1999 9:09:00 AM
From: TraderAlan	Read Replies (1) of 18137

wall, NITE At first glance, not a bad 5-min chart visually (although it actually was a bearish one). Looks like you were trying to buy the top of an ascending triangle-looking thing. It broke down on the next tick. Two major warning signs: 1 - that shooting star thrust to 37 on the 2nd 5-min bar of the day. While your pattern looked like a decent triangle ready to breakout, that star was a very big deal and filled with traders caught buying an opening top. 2 - look at the time of your execution. Lunchtime is usually a very bad time to try to buy breakouts. Personally I avoid them like the plague as you can't trust anything you see until at least 12:15 to 12:30. 12:00noon exactly is also used as a trigger point sometimes start selloffs or fake breakouts. The MMs will watch each other closely at this time and jump on board if they see a game in progress. AOL Naughty, naughty. You sold the support of the first hour low at 96 rather than buying it (although that's a good thing to do if the right conditions are in place). It was successfully tested once at about 10:45a. NOW the third time price comes down to an intraday low, odds increase for a bearish break. But it's your job to short the actual break or first confirm a very bearish short-term congestion pattern (1-min, etc) near the low and short the low before the break. AOL bounced the low you shorted in one bar and moved up a half. BTW there were a few good reasons to short at about 96 1/4 20 minutes after your trade. ATHM First new traders should avoid taking any positions after 3pm on a summer Friday. I personally stopped doing it a long time ago as moves are very undependable at this time AND if I've had a crappy day or week, I just can't trust myself with the last open market hour of the week. Other than the time, I see two things that would have kept me out of the short trade: 1 - a hammer reversal on the 13:05p bar. Not sure this shows on your charts as everyone draws 5-min periods a little differently. 2 - related to the first, the reversal caused my 5 period stochastic to form a double bottom and cross over the fast line. This is a buy signal, not a short signal. The long trade you made occurred right at a major intermediate resistance point (13-bar). I buy breaks of these points, not price pushing into them. Alan

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