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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (3604)	5/5/2005 3:24:07 PM
From: kodiak_bull	Read Replies (1) \| Respond to of 13449

DB & board followers: You could spend $3,000 for books and another $6,000 for dvds, cds and yet another $15,000 for seminars, airfare, meals and hotels and not find a clearer, more succinct statement of purpose, strategy and practice than this: "The very first thing you must do ..... and nothing else has priority over this ..... is to determine the time frame you wish to hold a position. Once you determine the time frame, whether it's an intraday trade, swing trade, intermediate term trade or long term trade, you then pull up a chart for the time frame in which you wish to trade. Your buy and sell strategies should be designed around your time frame and then the trend within that time frame." There it is, in a nutshell--timeframe and trend. Now DB goes on, again in succinct, easy to comprehend prose, to illustrate exactly what he means: "[TIME FRAME] I'm a swing trader. That means most of my positions are to be held for a 2-5 day time frame. With this time frame in mind, I must look at hourly and daily charts for my set ups. If I were swing trading XLE, the first thing I would notice is that price is in a down trend. When in a down trend, I look for shorting opportunities, not long opportunities. [SET UP] So, keeping that in mind, I would be looking for a short set up. The 20 day moving average is declining, it is also below the 50 day moving average. This confirms your down trend. In a downtrend, I want to short into major resistance. That means shorting into the 20 or 50 day moving average. [ANALYSIS--it doesn't have to go on for pages] You bought your position going into resistance. This is a high risk, low probability trade. Well done, and oy vey, vot a good price for those who want to learn. Kb

To: chowder who wrote (3604)	5/5/2005 5:35:48 PM
From: ridingycurve	Read Replies (1) \| Respond to of 13449

Bum, thanks for the critique and the advice. Just goes to show how inexperienced I am at trading. I knew XLE was in a downtrend, but thought that the risk/reward was in my favor. My thinking was that if XLE could break through and hold above the 20-day MA, it might go even higher. This was intended to be a short-term trade, with stops being continuously moved up as warranted. Obviously it was a mistake. Lesson learned. Hope not to repeat the mistake. Now a question. Once it became obvious today that a downtrend was in place on volume, should I have sold rather than have lamely watched XLE go through my stop? A couple bits of information. I am primarily an energy and MREIT investor. Currently 100% cash, waiting on the energy sector to turn. Probably won’t be back into the MREIT sector for a long time. My primary focus must necessarily be longer term than many here. I am managing 14 accounts, inclusive of those of my adult children, and it is impractical for me to attempt short-term trades in all of those accounts. What appears to be a better plan is to capture the heart of major moves such as the one that occurred in the O&G sector from early January to early March. I don’t intend to buy until the technical indicators are aligned, and don’t feel it necessary to squeeze the last drop of profit out of a run. I would appreciate very much any comments you might have regarding this strategy, which MA’s and technical indicators I should focus on the most, assuming the plan makes sense, and where I should attempt entries and exits. Would also appreciate advice on alternate strategies. BTW, what is a Stage 3 uptrend, such as you describe the last run up in the O&G sector? Can’t find a definition at StockCharts. Thanks again for all your help. ridin