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Strategies & Market Trends : Chart Formations -- Ignore unavailable to you. Want to Upgrade?

To: sean sanders who wrote (833)	7/30/2005 9:53:23 PM
From: Casaubon	Respond to of 967

the only real set up I see is to go short, on the move up to gap resistance, but the move gapped up and over the short entry point (at about 10050), which would have induced shorts to cover. Other than that, I would not tackle any other set ups, there. is it gernally 1 tick below the previous lows to go short? Don't forget; you need an uptick to get your short entry. That won't likely occur once that kind of breakdown occurs, I think. What's your opinion on entering trades near a trendline or some support? That's better than entering near resistance, unless you can detect breakout set ups <GGG>. #2 after the large red candle day with volume where is the new resistance? Definitely at the top of the large red candle; though there's nothing compelling price all the way back up. Perhaps you could put multiple positions on. Start shorting half way up the red candle, and then add another position at the top of the red candle. The breakdown from that congestion zone (just prior to the long red candle) should contain upward price action at about 10025. lets say we just ended the big red candle and made a nice profit would you sell near the close of that big red candle just to take a profit? If I were short, at that point in time, there's nothing compelling to close the short, IMO. However, as I noted above, the only decent entry would have been on the move up to gap resistance. But, that play would have been shaken out when price gapped above the resistance price. or would you put a buy stop 1/2 into the red candle and let it ride some more? I don't think the buy stop is a good idea there. I think you've got to hang tougher than that or you're going to get chewed up by volatility. Again, I don't see a compelling set up for any position besides the short entry at gap resistance (which would have been a losing trade on the gap higher). #3 If you held onto it would you consider #3 a exit meaning the close of 3? is that a tweezer bottom you think and the next candle being a hanging man type but its close above the previous white candle so its showing a possiable reversal? Yes, it's very close to a tweezer bottom (though not perfect). I think I would be uncomfortable holding the short at the close of trading this day. I would probably do an MOC (market on close) type order. also if you did sell (my bold) at that hanging man/white bodied candle would you reverse and go long at this point also hoping for a strong reversal? back to the previous resistance or the h&s there? I assume you mean buy (not sell), as you would be short, here. No, I would not reverse long. There is nothing compelling about the trade to enter a long position, IMO. I do not believe it's a good idea to jump back and forth between short and long positions. IMO, One should identify the main trend, and only operate with an appropriate trade in the direction of the trend. Hedging with options is my exception to this notion (but at least you earn time decay).