Thomas,
The reason I like the idea of buying when a declining stock rises above the previous day's high is because it gets you in early.
My only contention with Elder's strategy is a conservative one: I would rather wait until the beginnings of a continuation can be established.
This is ideal, of course, but since I can't watch the market all day, I have to improvise. Often, when the reversal is established, half, or more of the move is already history. That's the trouble with doing end of day trades only, they miss much of the move. By placing a buy stop at yesterday's high, I can go away and not be concerned.
BTW: what broker do you use to set buy-stops? None I've ever used have this feature.
My broker for this kind of trading is TRADING DIRECT. I found them from a post on Yahoo about a year ago. They are a division of York Securities, who have been around forever. I pay $9.95 per trade for any size, limit orders OK. Pretty fast execution, usually, and no hassle. They are also pretty responsive to queries. So far, I don't have any major complaints. I moved here from Ameritrade, who seemed to not know what the hell they were all about, all the time.
They can be found at tradingdirect.com
I think they will allow almost any kind of order you may want to place.
KLA
BTW: what broker do you use to set buy-stops? None I've ever used have this
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