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

To: First Last who wrote (5416)	11/14/1999 1:31:00 AM
From: First Last	Read Replies (1) \| Respond to of 18137

"Top down trading" and "Bottom up prediction" After Richard mentioned the important rule to follow the individual stocks, not the "Market", I would like to add my observation. It is almost impossible to "Trade the Market". "Trade the market" means trading individual stocks according to your prediction or reading of the market.'cause you don't know what stock will take the most advantage of the movement of the whole market. I also call this "Top down trading". "Top down trading" is not a good idea, but "Bottom up prediction" could be very accurate. "Bottom up prediction" means predicting the market by watching individual stocks. Let's say the market is moving up, but a lot of stocks in your watch list start tumbling. This means a correction/reversal of the market is on the horizon. Vice versa, if the market is moving down, but a lot of stocks in your watch list start pulling themselves out of the mud. This means the market will start up trend pretty soon. So, Tom Dorsey said the "Bullish Percent Index" is the most important market indicator. "Bullish Percent Index" simply keeps track how much percent stocks in the market looking bullish. F.L.