Also, if I remember correctly, Richard suggested only putting 10% of
your trading capital into a stock. Then you can allow up to a 10% loss put still only loss 1% of your total trading capital.
In reference to what Richard said about stocks and making money this
week, as I scan through the charts, there are A LOT of stocks with pattern similar to those that we saw around the genesis of the TA board on Prodigy. And that was a very good time for making money.
One of the first things Richard posted to me, and Dave E. confirmed was buying on extreme volume dry-ups on pullbacks. Take a stock with a good, solid up trend, and look for the peak, and then a nice gentle
curve back into a basing pattern. Should look like a smooth slide, and the volume pattern should slide with it. Then look for volume to go to less that 2/3 of it's 180 MA (correct me on this Richard), as a buy point. This is telling you that all the sellers are almost gone, and it might be ready to resume its up trend. Buying here can be good
because it gives you a little cushion (read:profit) for making the decision for what to do as it approaches the breakout point (i.e. recent short-term high or peak of the slide).
Smaller version of the "slide" method applies at times after the break
as price pulls back to what was resistance, and now is support. Henry
seems to use this a lot as an "add" point.
There are a lot of stocks around with these patters to look for, but you need to visually scan for them, as I don't know of another scan
to pick them up acurately.
Tops and Bottoms are hard to pick (for me at least), and most of the time it comes down to buy "the Base" or "the Break", each has its pros and
cons, but there are a lot of them out there to choose from.
BCL |
