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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Monty Lenard who wrote (11413)	2/6/2001 11:21:06 PM
From: Michael Watkins	Read Replies (2) \| Respond to of 12039

Monty - yes, and its also a question of time frames. The bulk of my trades are intraday futures trades - so all I really care about is the overall direction for the day and the 'good' enough read on the daily chart is ample. So all this talk about trading, thought I'd post a chart or two over the next few days to spark discussion other than Hammers! :) I only had one trade today and had to take off, marked the trade on the following chart: intelligentspeculator.com Basically it was a three inside up combination pattern, and on the 15 minute chart (not shown) the swings were still in an uptrend so I took the trade. Had to bow out for a meeting; closed the trade late in the morning. Once filled I just move the sell stop up to break even as soon as possible and then up using a combo of a tight moving average and swing lows. I'm getting better at letting them run than I used to, plotting the swings on the chart helps a lot. Although an extreme ADX reading will see me exit on the first contrary move. On the right side of the chart, a setup I would have taken in a flash, since the trend in the 5 minute time frame had changed and was moving with some speed. The swing lines on the chart illustrate that it actually is in a downtrend already by that point - lower high and lower low swings. Chris if you are around, that 'trend line break' discussion we had - frequently in shorter time frames I see trend lines violated only to pop back to the other side within a bar or two. Most of the time I'll wait for a retracement back to the trend line and lurk underneath. With futures (and you too on the QQQ) its very nice to lurk underneath since we can set sell stop orders underneath UP bars. The thinking here is that the market has to PROVE that it wants to go down, and thus will take me into the trade. Looking at the chart then, price retraced to underneath the uppermost consolidation zone and we know that support will frequently trade places with resistance, so my plan would have been to lie in wait, banking on a successful retracement in this newly found downtrend. EDIT: By the way, when I place a 'lurking' order, I always make it a LIMIT order. I.e. in this example a SELL STOP LIMIT order would have been placed. Especially in the futures, this is required to protect myself from the infamous 'death spikes' that occasionally occur. More than once I've seen a big move go through my stop limit and move down 3,4,5 or more points, only to instantly reverse. It doesn't happen as frequently as it once did, presumably thanks to liquidity, but I still place the protection. Rarely am I not filled on a valid move. And if I'm not and it moves big in my direction, oh well, another trade is always around the corner. cheers mw