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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: horsegirl48 who wrote (31902)3/9/2002 10:59:56 AM
From: Chris  Read Replies (5) of 52237
 
the amateur's will buy on dip on every dip we get.. but the pro's will buy on dip only when market indicators show "strength".. (which is what i did tues-wed).. market was basing after big breakout on monday and still showing strength.. so, I bought on the dips on tues/wed.

HOWEVER, now that the market has moved up (amatuers have missed the departing boat), they will be waiting for the next dip to "join in"... however, with my 120 min indicator showing "toppy" signals (did anyone notice it?), the pro's will be selling into strength as the amatuers will be "buying to play catch up"..

That's why i always like to use indicators rather than looking at price alone. Indicators can tell you the underlying strength/weakeness that price action alone cannot.

ie: price is hitting resistance for 2nd time. However, perhaps indicators are showing divergence or weaker momentum/strength on the 2nd attempt. Those that look at price only will only see price hitting resistance (they say: "no big deal").. Those that look at indicators might see some "cracks" in the armor on that 2nd attempt.

hope it makes sense.

right now we are all guessing on next week's action. Important thing is HAVE A PLAN IF:

scenario A) we hit those resistances and back off and sell off. what do you do? If long already, do you sell?. If not long, do you buy on the dip?

scenario B) If we break above those resistances: if already long, do you buy more? if not long, do you buy?

these questions and trade planning are for the trader to decide.. the bottom line is.. WE HAVE AREAS OF CONGESTION, WHAT ARE YOU GOING TO DO? HOW DO YOU PLAY IT?

Trading is all about planning.
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