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Strategies & Market Trends : Technical Analysis - Beginners
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To: MechanicalMethod who wrote (11103)1/30/2001 9:28:40 PM
From: Monty Lenard  Read Replies (1) of 12039
 
I do short stocks in uptrends and go long stocks in downtrends but I don't tarry long when I am running against the grain and I have to be very very nimble. I do that more as a game just to let the crooks know I am reading their book. :-)

Now if the macds are at EXTREMES I just will not go long and vice versa. By extremes I mean EXTREMES and starting to roll over or where I KNOW the next bar or two will start the rollover. I have certain patterns that I look for that lead the rollover or upturn of the macds.

BTW, that crap in the books about waiting for crossovers is just that. The move is over when the crossover occurs. I want the icing and I use the candles to know when to go but all the time looking at where these macds are at the time. Now to do it this way you had better be willing to take a loss quickly. Many people say they do that but they really don't.

BTW, my friend Brooke sometimes accuses me of predicting but I really don't. I do anticipate what should happen based on a candle or a multiple candle pattern(usually only 2 or 3 scenarios). By doing that it helps me RECOGNIZE quickly that I read it wrong or that something has changed. This helps me get out quicker and keeps my losses very small.

But to say I have always lived by my rule of NEVER EVER going against the macds is not quite true. I do it occassionally just to keep my hand in at "making fool plays" as Jessie Livermore would say.

BTW, shorting in uptrends and going long in downtrends is different than going against the macds. I have shorted mostly for the last year but I also have gone long for those beautiful beautiful bear rallies we have had. I use a fast macd for that but the slow one keeps me aware of the BIGGER/LONGER TERM trend in play. Notice I said the fast one was saying one thing while the slow one was saying something different. When they are both saying the SAME thing it is definitely a fool play to go against them. I will say again that Brooke is the one that helped me fine tune this. She is one heck of a good trader!

I guess a book could be written on this kind of stuff and did not mean to get long winded but while the tools are simple ... the application is a bit difficult for me to explain.... I just see it. Only recently have I tried to start reducing what I see to writing.

Monty
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