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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: heehee1 who wrote (2624)	8/31/2000 2:24:45 AM
From: FLACK	Respond to of 100058

heehee "...isn't the low 2ema at 235 which occurred at about 2:50? Or are we still talking about the first two hours of trades?" We're talking about the high and low 2 ema within the first 2 hours of the day. Actually, this time frame varies with different stocks (yet another reason to follow just a few stocks at a time and really get to know them) and some will enter their private desert earlier or later. In other words, a stock may as a rule (pattern) attain it morning high and low within the first hour each day before leveling off while another may generally take 1 1/2 hours. Two hours is merely a sufficient time frame for most stocks. The basic idea here is to mark the highs and lows of the first 1 1/2 - 2 hours (some people do this on a 5 minute chart but since I only watch 1 min. and 15 min. charts, I do it on the 1 min. chart and smooth it out by using the 2 ema instead of the actual high and low prices)and buy when/if the price breaks above the morning high or sell short when/if it breaks below the morning low. This is not a new idea, nor is it my idea. At the moment I can't recall where I picked this up but it's an interesting strategy (though not an entirely scientific system) and seems to work well for swing trading and pretty darn well for day trading. As always, it's best to wait until we are out of the desert before acting on this. Many days the extremes of the morning highs and lows will not be breached, but that's the way it goes in the market.