Some comments:
The trend is your friend. Don't try to buy at bottoms, wait til the trend is established. Dahl and MACD(13,34,89) are good trend indicators with o triggers. Even if you don't use them for entry/exit make sure they have idenified the trend.
In a short trade, you still want a trend, only a down one. E-wave can give a total picture tied with Fib and Gann to provide a "prediction" setup. Break of major support is the key. Channel analysis is a good way to play a short. Why do most shorts fail? the difference in speed, stocks go down faster than they go up. a stock going from 25 to 10 is 60% move, a stock going from 10 to 25 is a 150% move. There just isn't the money in shorts. You have quick moves for small percentage moves.
The state of flux in the market since august brings a "point" mindset into play. We look at a stock moving from 50 to 60 in a couple of weeks and think that higher priced stocks are moving. 50 to 60 is same as 2.5 to 3, 5 to 6, 10 to 12, 20 to 24, etc. I think if anyone checked the top 100 % movers for past month, 6 months, or year, you would see only about 30% fall into high cap stocks. It requires some stock selection where I think canslim is best method. Everyone should reread the "book" by O'neil. and get rid of yellow dresses. |
