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Strategies & Market Trends : Trading the SPOOs with Patrick Slevin! -- Ignore unavailable to you. Want to Upgrade?

To: Matthew L. Jones who wrote (1638)	12/1/1999 3:09:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 7434

I do not know why ISpec uses 45 minute. I know she trades to some extent using LBR's methodology and I think LBR watches 45 minute for some reason but I do not know why. Whether that is part of the reason or not I suppose one would have to ask ISpec. I mentioned it because some well-seasoned SnP traders told me that years ago. To be honest, I do not use it much myself.....I'm in and out sometimes during the same one minute bar, usually my average trade takes perhaps 12, 15 minutes so I do not focus much on longer than 5 minutes except for trend. I thought it might help, but I've never tested it out except for to see "when" the moves are more likely (and predictable) and the results at the time were as I mentioned, the first three and the last three. Well, I'm in a foul mood. I was trying to Sell this recent spike and my screen would not XMit the Order and now down it goes, I see. I cannot reco a good book, sorry to say. I have quite a few of them but none stand out as spectacular. I would be less prone to read one these days anyway. There are so many on the market I get snow-blindness just thinking of them all. Tom Trader may be able to help with a specific book on system development. There are a lot of rules and theories about crowd psychology I've learned either from others or by experience over the years but every situation has it's own parameters. <that the only support or resistance points that seem to have much viability are the previous day's high and low, and the intraday high and low. I've looked at every possible MA on every possible time frame and have found no more than very minor support or resistance. Same for Bollinger bands which are really just a derivation of the MA's. Are there any other support and or resistance levels that you have found to be consistently honored?> I've often been told of Pivot Methods that floor traders use based on the previous OHLC, but they rarely seem to work for me. One tidbit I was taught was to look specifically for a retrace of 0.618 and a pinprick. Evidently, traders know that many Stops are placed on a Fib number 0.618 back from the action and, if given the chance, they will blow through the 0.618 retrace by just enough to flush the stops and then resume the original move. This, however, may not work late in the day when Momentum takes over as people are looking to shut down by the Close.....but it's something to think about otherwise, at least to watch for. Myself I've always been partial to 8, 34, 55 MA's and I glance now and then at 200 because "everyone" looks at 200. I use 55 instead of 50 because "everyone" looks at 50 and so I want to see if it's a pinprick just to run Stops or if it might be the Real McCoy. The 200 is a tad more severe than the 50, plus it takes a heck of a long time to get to it, so I stick with that. Generally, I find myself looking at MAs less and less in terms of importance these days, however. B Bands I do not look at at all, but only because I think the move has already stated once they react and I have stuff that I believe is faster. A trader stopped by before Thanksgiving and worked with me on Sto's and a few other things for a day and I have only lost on one trade since, so I've been sticking with those things for the time being (Normally, I trade 3 to 5 times a day....rarely more). I find that over time one has to change indicators or modify existing indicators simply because nothing works all the time or for indefinite periods of time. One indicator that jumps to mind that works very often is a combination of the 8 and 34 MA on the 5 minute Chart. It's quite striking. I've noticed that when the Price bar moves sideways to an extent where the Price, 8 tick, and 34 tick all merge together there is a sharp move afoot. Merge in the 55 and that move might be 8 or 9 points suddenly. Could be that almost any set of averages would work with that, but Scott and I backtested that once last year, I think, and the results averaged 8 or 9 point moves on the merge of all 4. In retrospect, a Fib or Pitchfork or most other traders might infer that is the "natural" result of what is often called "channeling". My averages are all Simple, as opposed to the Exponential that Bob mentioned. As far as OHLC, many people look to those numbers to infer Inside Days, Outside Days, Gap Buys/Sells, Breakouts and the like. I would think it's important to keep those figures in mind so as to determine the likely Mass Psychology that would hold some sway as such points are breached or not breached. Then of course is the need to be aware of Intraday Double/Triple Tops, Bottoms, and the likely result as those points are moved to. Et cetera, et cetera, et cetera.