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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: KymarFye who wrote (80720)	7/22/2001 3:27:13 PM
From: eichler	Read Replies (1) \| Respond to of 99985

Kymar, Thanks for that. A very enjoyable read to tickle the old brain bone. For that matter, quite a series of stimulating posts on this thread. An extra pleasure to read this morning. Have to admit though, a bit of a chuckle when you mentioned "over-simplifying" near the end..........over? Not! Good stuff. Regards, Eichler

To: KymarFye who wrote (80720)	7/23/2001 1:25:20 AM
From: ig	Read Replies (1) \| Respond to of 99985

"I believe that the case for awaiting an actual breakout rather than going long aggressively ahead of it is stronger even than it would have been, say, a couple years ago." That makes sense, and if a decision were to be made solely on the falling wedge, I'd wait. However, taken with other reasons I've mentioned recently, the wedge is merely a supporting indication. I've taken a small long position here, with very tight stops. I have almost nothing to lose, yet quite bit to gain if the move starts soon. If I am wrong, I will exit with a small stop. If I am right, I'll expand my position when the continuation traders are making their initial entries. There are many experts who will swear that the best way to trade is to Trade With The Trend, avoid trying pick tops and bottoms, wait for reversals to confirm, and blah blah blah. There's truth to it, but there's also such a thing as successfully trading reversals rather than continuations. A good reversal trader makes more money and makes it faster; a bad reversal trader loses more money and loses it faster. A successful reversal trader also has another obstacle to overcome: he trades alone. That is to say, he trades with very few signs that he is right, when the continuation crowd is saying, "I'll wait and see what happens before I commit. I don't see enough confirmation. I'll move in the new direction when the new direction is formally established. Until confirmation is seen, it's too [risky, foolish, dangerous, whatever] to make a play." For his trouble, the astute reversal trader enjoys a superior risk/reward ratio. His stops are much smaller (though more frequent) and his rewards are greater. ig