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To: AllansAlias who wrote (28939)	9/2/2000 10:52:23 AM
From: dennis michael patterson	Respond to of 42787

What an excellent post! TA IS about probabilities vis-a-vis the charts. Thank you.

To: AllansAlias who wrote (28939)	9/2/2000 11:13:43 AM
From: AllansAlias	Respond to of 42787

As a more personal addendum to the post, I often have to remind myself of something that is written about in almost every book that one can read about trading/investing. When I am riding a winner, the clutter in my head, which often includes hope and fear as well as other indicators and peoples' opinions, will often lead me to exit the winning position. It is so simple to say, but so hard to do. If a position continues to win then let it ride. I will often take a profit because I convince myself that it can not go higher/lower. There is no end of sage quotes regarding this situation, but I tend to fall back on the work that is perhaps more commonly quoted than any other -- Livermore: * [Prices] are never too high to begin buying or too low to begin selling. * After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! * They say you never go poor taking profits. No, you don't. But, neither do you grow rich taking a four-point profit in a bull market.

To: AllansAlias who wrote (28939)	9/2/2000 3:29:39 PM
From: sam_o	Read Replies (1) \| Respond to of 42787

Hello Allan: Looks like your thinkin again and not out enjoying your Holiday.... Looking at my NDX chart, I am not seeing something, it appears to me that we did take out and close over July highs?? Please inform me correctly.... siliconinvestor.com

To: AllansAlias who wrote (28939)	9/3/2000 9:00:10 AM
From: donald sew	Read Replies (2) \| Respond to of 42787

AllansAlias, Good post. A common sense approach. Theres too much talk that the market "WILL" do this or "WILL" do that. especially from the analysts. Timing/predicting the market is simply a study in probability, and is NEVER 100%. But so many still use words like "WILL" and "MUST", etc. As I have stated several times, making the big call, as so many do, has no more than 62% probability, at best, of getting it right based on mathematical studies, which is only slightly better than flipping a coin. What I consider a big call is trying to predict a huge price movement more than 2 months out, like the NAZ to set new highs by the end of the year. It doesnt mean that they cant be right, just that the probability of calling it has high risks. seeya

To: AllansAlias who wrote (28939)	9/3/2000 9:49:09 AM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

There is the mistaken impression in general that TA is about predicting the future. I agree here. I use TA to help me anticipate what price can do in the next few days. There is a significant difference between anticipating a move and predicting a move by using TA. But when I look at some of the threads here at SI, I find many do not seem to understand this important difference. TA is about defining probable outcomes and assigning risk and reward to these outcomes. Actually I use TA in two different ways. The way you mention here is what I use in the time frame I trade in. The other method I use is anticipating market direction using the longer time frames like 45-min or longer. If and when it happens, I will be then ready to look for a way to capitalize on it in the time frame that I am trading in. For example, when the NDX broke the downtrend line from Mar-00 on decent volume, we had a nice situation where going long was less risky Another common setup along these lines is when we get a breakout through such a downtrend line followed by a pullback to the line -- this is an excellent low risk setup. Both excellent observations. I want to note that volume analysis is more worthwhile on the daily charts. On the intraday time frames that I trade in, I find volume to be meaningless much of the time. Also you mentioned in your post that it is worth paying attention to low risk situations where you can quickly know when you are wrong and lose an abnormally small amount of money. This I agree with too. Except in the intraday time frames, if I follow price action in the wrong time frame like one that is much too short for the way the market is trading, I can be whipsawed two or more times before the actual breakout occurs. So I have to be careful here. Also that breakout followed by a touchback is a very powerful setup. Not only does price tend to move rapidly with strength in this situation, but also a breakout and touchback actually confirms support which makes this support more significant to the trader in their placement of their stop loss order. Where does NDX go from here? I have no idea, but I do know that this is another low-risk opportunity. If we close over this level with vigor, then I am eager to be long, if we fade back, then protect longs and look for shorts as there is a better than average possibility that the rejection at this important resistance level will lead to more down. A agree with you here. Sound reasoning on your part. I do not think traders spend enough time looking for those low risk setups that still can yield good profits, and in some cases like the touch back of a breakout point, unusually high profits despite the very low risk point of entry. This includes me! :-) Good post, AllansAlias! Bob Graham