PR,
My first recommendation is to learn PnF by reading Tom's book and subscribing to DWA's service.
I have reviewed your posts, the charts, and the responses.
On MYL, the stock was extended and the risk vs. reward was not in your favor. As far as the stock being in a downtrend, it was not. The momentum and relative strength were negative. The RS has since reversed. The right call was to avoid. Waiting to buy a stock a positive RS alone is wrong. When evaluating a stock to buy using PnF, one should write down all the reasons to buy and all the reasons not to buy stock. If the reasons to buy the stock are more dominant than the reasons not to, then buy.
On GIFI, once again the right call was made, the stock didn't give a buy signal until sometime in April when it broke a double top at 20.
Depending on all of the other factors, 20 might have been a good buy for a trader.
In both of the above you might have missed an opportunity. So what, that is all that was missed another one will be along shortly. If your technical indicators were telling you to buy, why take action based on PnF a form of TA that you do not have a grasp on as of yet? Once again, if you read the book and subscribe to DWA's service, you will be on your way to a better understanding of PnF. However, if you have a great understanding of your TA go with it and do not confuse yourself with PnF. If you do not have a firm grasp of your TA then I encourage you to learn PnF as it is easier to learn than most. At a seminar I attended, Tom said that most forms of TA work well when learned properly. He likes PnF b/c it is the easiest form to learn.
I agree with you to an extent that PnF is confirming. It confirms whether supply or demand is in control. I disagree that it is not an effective tool for short term trading. However, you must learn to read the charts and the other indicators b/f you can trade the trading ranges that you referred to in your last post.
Later,
Lobster |
