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: rocklobster who wrote (27714)	1/15/2002 5:46:28 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 52237

Should probably take this back to the IB thread but perhaps there are lessons useful to all in the discussion. >> got any suggestions.. Theresa Lo has suggested that I not have my stops in such stupid places as right over the high of the day...but I've done real well for six weeks now fading these spikes << The problem with the high of the day is that everyone and their dog knows they are there. If you are short and place a buy to cover stop at the high end of the day, then you are going to extend your loss. While some were already short and preparing to cover; some were getting ready to go long, knowing full well that there would be a rash of covering if price moved back up past the high of the day. The song is as old as the hills... The better move would be to prepare to go short if price moves back down after a test of the day's high. You wouldn't have gone short at all then, and would be sitting by the sidelines watching other people's pain. So right at the cursor, within this small triangular consolidation zone on the 1M chart, there was a tiny little doji. The opportunity to take a very quick scalp right there presented itself. trendvue.com With the day's high only 5 points overhead, and the buying impetus presented by 'breakout buyers' of the triangular consolidation (breach of the trendline) its almost a given that there would be a very quick pop to test the day's high. Under normal conditions the day high plus a few points and that's it. You exit with a market order and take your 5-10 points and say thanks. And so there was a pop to test the high, only this time there were far more buyers than sellers, than normal, which propelled it up very quickly. So what can you do to protect yourself? Hard to answer, I don't know when you went short. Would be easy to answer that question knowing where on the chart you went short. Personally I see nothing in the chart before that ramp that said go short, at least not since the opening 10 minutes of the day..