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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: ynot who wrote (3130)	8/22/1999
From: Dominick	Read Replies (1) \| Respond to of 18137

ynot: There are certain principles traders need to be aware of: 1-Supply & Demand. 2-Effort & Result. 3-Cause & Effect. They appear on bar & point & figure charts. Supply & demand and effort & result can be seen on bar charts be observing volume, price and price spread,(range or high minus low). For example, if a stock moved 1 point on 1 mil share volume yesterday and moves 1/2 point on 2 mil share volume today the effort,(volume), didn't equal the result,(price or price spread). These principles are applicable to any market or time period. Supply is expected at resistance areas,(bar and P&F charts). Therefore a respectable break through should have more than ample effort and price spread to clear it. The pullback should have significantly less volume to indicate the lack of supply and sellers. If the price re-enters the trading range ,(even on less volume), that indicates a weakness,(no supporters). Better to wait and watch. On a level 2 screen, you can observe the total number of shares at bid & offer, the number of MM's appearing on either side or who's not leaving and what's happening to price movement. With regards to cause and effect. Stocks go under accumulation and distribution in trading ranges. The effect,(up or down trend), was due to the cause, (the accumulation or distribution within the previous ranges). These principles are always in effect. IMHO, it's not the pattern,(i.e. head & shoulders), a chart makes that's important. It's the price action, price spread and volume measured by your trading time horizon. Hopes this helps, Dominick