Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (27110)	1/7/2002 1:12:50 AM
From: Robert Graham	Read Replies (5) \| Respond to of 52237

My response to you would be not to aim for anything except that event you are anticipating, which may be a breakout. And then allow the rigorous application of your trading discipline and the price action of the market determine your exit. Simply put another way, there is nothing to aim for in a trade, except to properly execute trade itself. Just follow the signals provided by your trading system. If you have adhered to your trading rules, and properly executed the trade, then consider yourself successful, even though you may have not made a profit. If your trading approach is a successful approach to trading in the market, then over a series of trades, you will have made a profit. And this profit will be repeatable over the longer time frame. If not, either you have not had the focus and discipline to follow your trading approach successfully, or your trading approach itself is flawed. For myself, I find that price action and sentiment are the primary market indicators for the short time frame of a trade. This does include patterns as a key component. But the price patterns themselves do not predict success. They just provide points in the market for me to access the probability of a trade, and then determine the entry point and my initial stop loss. It is the price action leading up to the entry point, and particularly what follows after the entry point, that will determine how I will proceed to execute a successful trade. And if sentiment is high, this can alter how I manage the trade. Also the market can have a "bias" that is worth noting. Some approaches to trading do utilize price targets. But these price targets are not set in stone. A trader may wisely exit before their first price target. Or stay on past their first price target to collect exceptional profits. It is this ability to stay on for the exceptional profit that allows the trader to be profitable over the longer term. This is one key skill that the professional trader needs to develop, along with other skills like knowing when not to take the trade. The determination of "bull" or "bear" market is replaced by evaluating the character of the market in how the market is trading that day. There are different styles of markets in the type of price action that dominates. And a particular type of market may last only a segment of one day, to multiple days, and sometimes weeks. I especially watch out for congestion trading regions where profits need to be made in terms of scalping, if there are any trades to be taken at all that meet my risk profile. Sometimes it is best not to trade in some types of congested markets. This way of mentally framing the market can be applied to different time frames. But as you see, it does not involve thinking in terms of "bull" or "bear" market. For that matter, I can make a profit by placing a trade in either direction. I do not need to go long. So what do I care which direction the market goes? I do not need to make a profit in one preferred direction. And I do not trade retracements in the context of an established trend in my time frame. This ability to profit from moves made in either direction has helped provide me with a healthy perspective on the market. That and trading the SPOOs, which sometimes can have a diabolical nature to how it can behave. If I were to make one statement I feel is the most important to trading in the market, it would be the following. Do not try to predict. Anticipate price action, and execute the trade properly based on the intelligent management of risk. Predicting the market is for fools. And trading in the market is no game for fools. Bob Graham