Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Swingtrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Brandon who wrote (32)	10/4/1999 4:55:00 PM
From: Brandon	Respond to of 551

Gaps can present a real danger to your account. If we say buy XYZ above $30 and it gaps to $30 1/2 on the days first trade, it has obviously set up. But many times if you buy a gap you end up getting in it right near the high of the day. So we have some special rules and precautions to take when dealing with gaps. The gap rule is fairly simple, here it is. 1) Whenever a stock gaps up 1/4 or more above our the recommended buy price do nothing at this time. You must wait 30 minutes and mark the high for a buy, the low for a short. This 30 minute high or low marks the price you want to see broken. So, for a long XYZ was stated as a short above $55. It gaps to 55 1/2 so you do nothing. After 30 minutes of trading the days high is 56 1/16. As soon as 56 1/16 is BROKEN your buy alert has been hit. A short example would be we are looking to short ABCD if it trades below $25. It gaps down to $24 11/16. Again, no action is taken but we watch the stock trade for the first half hour. Say the low is 24 3/8, this marks the price we would want to see broken before we take any action. If this price is broken we will then look to go short. 2)The second gap rule has to do with selling open positions. If an open position gaps $1 or more above the prior days high, actively look to get out. I am going to use the example of a long, just keep in mind that a short is the same but in reverse. When you have a stock that gaps open by $1 or more, mark the low of the first 5 minutes. If this price is violated, sell half of your position. The next price to watch is the 30 minute low, if this is broken sell the entire position. 3) In the case of gaps we use a modified stop. For longs a long the stop is 1/8 below the days low at the time we enter a position. For a short the stop is 1/8 above the high of the day as established before we enter a position. Brandon www.mtrader.com/swingtrade

To: Brandon who wrote (32)	10/4/1999 5:08:00 PM
From: Brandon	Read Replies (1) \| Respond to of 551

MINOR SUPPORT: Minor support is the general price area at the peak of a previous rally in an uptrend. Any time the core setup brings a stock to an area of minor support you have a higher percentage setup. Meaning the potential reward vs the risk is greater. I have provided a chart illustration of minor support at mtrader.com. MINOR RESISTANCE: Minor resistance is the general price area of the bottom of the last selloff in a downtrend. Any time the core the core setup brings a stock to an area of minor resistance this will setup a higher percentage setup. This means our risk to reward ratio improves. I have provided chart illustration of minor resistance at mtrader.com Brandon www.mtrader.com/swingtrade