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XU, b.,
Stops are my triggers for action. I execute Mental stops by putting a sell at the Bid price or Buy at the offer price. I have resorted to a market order if a fill has not been executed within 5 minutes of the close. Give yourselves at least 8 minutes and I do not see a problem with execution. I like mental triggers vs giving your card to someone else. Trading in NYSE with stops can be hazardous since you are basically giving your order to the market maker (the Specialist). Many firms will not allow Stop orders on the Nasdaq. Their are many market makers. In fast markets I have seen AAPL trade one dollar apart at the same time. Some firms do give Stops to a Market Maker but remember that they become market Orders and .25 slippage is very common. Stop Limit Orders are always (not held). Meaning that the market maker is not held to the fill. The Specialist in New York knows where all the Buy and Sell orders are in his BOOK. He paid over 1 million to be able to hold the BOOK. He will make sure he makes money. I am against GTC (good til canceled) orders for this reason. It is important to reevaluate everyday if anything has materially changed. Though I am a small fish I feel unconformable showing my hand. This is my personal view. It works for those that aren't price sensitive. I get prices at the open, mid day, and the close and react accordingly.
The SOX is the most sensitive indicator in the tech sector. Yes you could look at the XCI. The computer Index which AAPL is in. You will see the similarities. The SOX made highs before the XCI. It is more sensitive. Because the market is all interrelated it is good to be aware of the major trends. That is the art of Trading. It all depends on the time perspective you have. You are right that the XCI has a stronger correlation to computer stocks and AAPL than the SOX. But then again AAPL has been on its own with very little correlation to anything. I am here because I see a chart pattern that interest me. APPL so far has a negative correlation the Dow. The week of the 3/28 the Dow began its decent. So far it coincides with AAPL beginning its accent. Time will tell.
Its interesting that you bring in MESA. I used it but could not feel comfortable trading the waves. I was drawn into the FFF (Fast Fourier Transformer) since it was closer to what I was using at the time. The moving averages. Basic yet powerful. I was big into all sorts of moving averages and wanted to use the optimized wave lengths. What was the prominent time length (Cycle) in a particular instrument? The more I optimized, the bigger the profits became when back testing. But in real life, it was the amount of losses that increased. I saw that in reality it became very confusing since 3the trigger points2 changed as more data was input into the algorithm. You can not get away from this since new data is created every day. And it will optimize.
The conclusion:
70% of mayor waves fell between 14 -21 time units.
So when doing moving averages use 14 - 21 units (minute, days,week,months)
For the trigger use half of the mayor wave. (for example for a 18 day moving average use the 9 day as your trigger) ( also always use exponential MA)
Draw a x,y chart and cycle length of 2 . (time unit) Where does this cycle peak? It will peak at 1 (time unit). 1/2 of X cycle.
We can discuss moving averages later. They are excellent tools.
As for fractals I have noticed that chart formations can be seen to repeat themselves in higher and higher degrees. You see an hourly formation turn into a similar daily formation into a similar monthly formation.
Mutual fund mania has had me cautious for many years. It seems to be getting more intense. I can not see a total meltdown. It would scare all the players cash away. You will see the market come down in sectors. I noticed last month that Index Funds, those specializing in the SP 500 were big winners in funds inflow. It is the general believe that it is hard to do better that the SP so why pay a manager. Index funds are probably going to be the worst performers this month.
I do believe in the sector rotation. Also that this is the top. But people have to have a place to store value and it sure is not going to be paper financial assets. I do not think it is going to be Gold. I believe money is going to flow into commodities. My choice was to trade grains or semiconductors. I liquidated all my gold and gold stocks and rolled into Semis. I chose this area since many consider semiconductors a commodity. Stupid as this may sound. It fit into my personality.
Right now Futures do not . I do not have the luxury to diversify either. Diversification is for those that want to store value, I would like to create value throught the risks I take.
I am rambling again, it is therapy to put your thoughts on paper........ patience........
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