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

To: aldrums who wrote (7447)	3/15/2000 7:53:00 AM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

Mr E, The problem with new high breakouts is that there are few reference points to tell where you are, how far the move might go and what the dangers are. Pullbacks are so popular because they offer one of the few easily-understood means of lower risk entry. Other times all you can do is shift down to the time frame under your holding period and look for support or congestion there to enter the trade. Momentum plays also require arbitrary stop loss because the market can go against you a real long way before you're "proven wrong", which is the best method to take losses. As for repetitive patterns, you're really talking about two different types. First congestion patterns in which you're placing a breakout bet, depending on which way you believe price will leave the pattern Second, trend, parabolas, etc have natural wave patterns most folks are familiar with through Elliott Wave. More simply, they'll respond to Fibonacci proportion in their movement, pop gaps where they are most expected and burn out according to schedule. Classic congestion patterns have developed less predictable outcomes the past few years because of their popularity. You need to be much smarter picking your spots on these things now. Remember to lag, lead or go contrary to the crowd but never with the crowd. This usually means waiting at the trigger point for their shakeout and then seeing which way the market really wants to go. One of the best trades happens when a pattern fails and moves in the lower odds direction. It traps so many "charts are easy" types that price rockets as they jump ship. Alan