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Strategies & Market Trends : Technical Analysis - Beginners

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To: MechanicalMethod who wrote (11840)	4/5/2001 4:08:31 PM
From: Michael Watkins	of 12039

I see what you are refering to... well in a trend, its not an issue typically. The movement required to generate a swing doesn't have to be that big. Sometimes its 1 point on the futures. Or a fraction of a $ on a 65 min stock chart. As I mentioned before, its not based on percentages... The best use of swings in my opinion, for most folks, is to exploit a trend. Of course, there's the minor problem of detecting when a trend has started - myself I prefer to use some straight lines and simple rules for that. Once the trend has been detected, lets assume long since I think that's where things are more likely to head right now, then we wait for a down swing to start and follow it down with buy stops above. I always want price to prove to me where it wants to go. For exits - I use a combination of average true range and or the swings to exit a position. If conditions are set for a good move (not trading in a range) then I will keep profit taking tops a little loose but follow the swing up on the daily (or perhaps a 135 min chart for stocks) to capture profit. After 3-4 intraday swings up I tighten stops up a lot more and let price stop me out for hopefully the lions share of the move. But first we need a trend, right now this move is just a bounce. I think its a very important bounce myself and therefore I'm playing it - yesterday early morning I posted somewhere here on SI my first long entry at ES 1103. So far, so good. I bet we hear tonight stories about low volume rallies. Maybe I'll listen to Pisani for a change on CNBC and see if it comes up. Friday or Monday I think the volume "problem" will be gone, assuming price can move up some more.

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