Tom,
Thanks. I'm sorry if I confused you, not intended...I thought about your post where you said you were trying to understand my method, let's see if I can't make some sense out of it.
In some ways, it's like trying to explain how to ride a bike, it's easy to do but tricky to verbalize.
One thing I do is I rely on the over all chart pattern, including cycles, but there's no recipe or checklist that must be met, except that when several indicators and/or patterns emerge, the risk appears less.
I could be wrong, but I think one distinguishing feature that compares what I do with what I think you do is that your system is designed to detect when the market has rounded the turn and is in the straightaway, then you'll take the trade. I have an indicator that performs the same/similar function. But the main distinguishing feature between yours and mine is that I place top priority on fork patterns when the market sets up for it. In this way, rather than taking the trade on the straightaway after the turn, I look for over bought and over sold conditions before the turn.
Now, I agree that markets can get even further over bought and even further oversold, and this alone must leave a trader to make a subjective decision, this can be foolhearty. But, I avoid that amateur pitfall by letting the market perform and conform to a fork pattern which I already overlaid (visually) on the chart, and if/and when the market behaves according to my expectations at those extreme price points and time, I'll take the trade even though the market looks like it's in the middle of a free fall, or blow off rally. Those tines are there and when prices react to them, the trade is low risk. This is very different that a random choosing of over done market conditions.
The fork is only one tool, but a major tool, I think I could talk about some of the others, particularly the one I have that confirms that the market has rounded the turn, it might be interesting to you.
Also, I use an indicator that measures time, not price. Time is as important as price, and a modification of the pitchfork which Andrews never mentioned in his work, is how to use the fork to calculation the mostly likely time for a market turn. This is something I've developed using the fork over the years, and sounding a bit like Gann, but probably not Gann. When time and price intersect, the trade is pretty low risk. Gann was right about that.....
I agree we could trade lower today, but I have several reasons to believe that we've seen a cycle low yesterday, and also a momentum low as well.
Now, for the a/d..... When the a/d turns positive, the selling pressure will be dried up and I'll add to my positions.
There's lots more, but I think this will give you a broader introduction to some of my trading madness.
As Always...
My Best Regards.
GZ |
