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Strategies & Market Trends : DAYTRADING Fundamentals
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To: TraderAlan who wrote (9097)6/22/2000 9:13:00 PM
From: booters  Read Replies (1) of 18137
 
Alan,

I am looking forward to your book as is most everybody else it appears. I hope you spend some time on patterns and how to trade them. I am in need of some new insights and it sounds like you will have some.

In regards to the failed pattern in MSFT:
once the bottom of the final, in pattern, flag was formed from 1:30 to 1:40 I see 81 3/8 as the entry point for a buy. This gives you a pattern measurement that should break out of the top of the triangle. When a new flag pattern formed from 1:50 to 2:00 it provided a perfect opportunity to place a stop just beneath at 81 1/2. When the overall triangle pattern failed this took you out even.

You mentioned in an earlier post about trading failed patterns. I have never thought of actually making a study of that but it is obviously a great idea.

When the MSFT pattern failed it formed a bear flag from 2:05 to 2:15. This measures out the bottom of the triangle and I think offers a very good opportunity to enter a short with very little risk. You could enter in the 81 3/8 to 81 1/2 area and very quickly be able to move a stop down to 80 3/4 with an upside risk of less than 1/4 to 3/8.

I think these micro patterns have given the trader two different opportunities to make a stab at the potentially large move that could come out of this triangle. Either attempt comes with very little to no risk.

I may have over analyzed but would be very interest in how you might play this failed pattern.

Thanks

boots

PS. I use bar charts instead of candles. It is easier for me to see the formations. Old habits die hard.
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