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Strategies & Market Trends : Three Amigos Stock Thread

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To: Ken W who wrote (20143)	6/5/2000 11:26:00 PM
From: Magnatizer	Read Replies (1) of 29382

Ken even went to your website and tried...lord I tried, to understand some magnets. hehe No need to understand how they are derived so that eliminated a majority of the work. Let me try to explain the basic use of magnets... Pretend the lines on the chart are walls. The thicker the line the taller the wall. As the market approaches a wall (from below or above) it must use extra energy to push itself over the top. The higher the wall, the more energy expended... Some times the market has a few "missiles" it can use to blow the damn wall up so it does not need to use as much energy going over. These are gaps over magnet lines. On the NDX (chart updated as of Fridays closing bar) you see the trading stopped at a very high wall (trendline A). This wall not only has height but if the market climbs over it then there are two other (albeit less daunting) walls to climb. The market did not have a missile this morning so it had to work very hard and ended up spending the night half way up the wall. If it's not careful it will roll outta bed and injure itself. Therefore requiring recovery time.... I really don't want to see it require recovery time. There are other aspects to magnets which assist in timing but the majority of the usefulness is in the walls. geocities.com "bottomless pit" to enter a futures contract you are required to have a set amount of capital in your account (margin requirement). For the CRB it is around 1500 at most firms. The S&P (large size) it is around 25000. Using the CRB: Each point move equates to $500 in equity gain/loss. After a 3 point move you either double your loot (initial margin) or loose it all. A 6 point move puts you up 3k or down 3k.... 10 point up 5k or down 5k. These numbers do not include your initial margin as part of the totals. There is no "bottom" to what you can loose short of when your broker calls and says, you need XXX in account or you are done. This is unlike options where you have a defined loss. I hope I explained things well here. I think I have used all the neurons alloted me today so I will stop here. Have a good one. ht Mag

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