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Strategies & Market Trends : Candlestick Charting--The unknown indicator -- Ignore unavailable to you. Want to Upgrade?

To: Esteban who wrote (663)	11/20/1997 4:26:00 PM
From: MonsieurGonzo	Read Replies (1) \| Respond to of 1589

Esteban, I was trading today and lost my nerve - so got out. Doesn't happen often, but sometimes you ain't got it, so I left the trading station and played with the wife. It's Nouveau Beaujolais celebration day in France (^_^). The intra-day candlesticks are intersting, indeed. On the indices, I've found that one must be aware of the various support/resistance levels, because they are so volatile, compared to stocks. That is the first trading rule I would recommend to you: look at the daily charts and have in your mind what the "bigger picture" is when you go down to the micro-level. Hammers, Dojis and such are just as valid intra-day; But I flip around to different time scales because, a "reversal" may consist of just a few ticks on an index. My second trading rule (suggestion) to you is, "to know which way the market wants to go", as the SI poster ANOLAN told me the other day. This is terribly important, Esteban - I made several mistakes trading on turning points that, although they happened, they didn't amount to much because the index "wanted" to go Up or Down, and I was "trading against the trend". Regarding "waiting for confirmation", it depends a lot on what time scale you are using, and how big a position you are taking. If you are trading the OEX for a 5-point swing, the only way to make money doing that is to trade at-the-money CALLS or PUTS, and be prepared to execute them really, really fast; ie., "scalping" the market. I have not had much luck with 5-point swing-trades so far - I'm looking for 8-point OEX trades now as my minimum tactic. On swings smaller than that, by the time you enter your order, confirm, and all that - the movement can be 1/5 to 1/3 way completed. After studying some of the "real" pros (here on SI) who hang out on the Tech Stock Options thread, I get the impression that they are "momentum" traders, and they get buy or sell "signals" when the OEX passes a certain level... ...for example, today - they bought OEX CALLS at around 913, after the resistance at 910 was broken, and it held up after the first hour of trading. Bookmark these people on SI, for info about index trading: TOM TRADER ANOLAN KEVIN JUDY IQBAL LATIF These are the best SPX traders that I know of, and they hang out on the "Tech Stock Options" and "Idea of the Day" threads. Good Luck! -Steve