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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Webb B Blackman Jr who wrote (8942)	11/20/1998 9:26:00 PM
From: Brian C. Lund	Read Replies (2) \| Respond to of 12039

Unfortunately, I did not get to Cleveland this year and I would have loved to have seen Dave's presentation. However, and I'm sure Dave will step in and correct me if I am wrong, I think I can fill you in a little as to how he does it. Dave has certain indicators that he has set up to enter a trade. As each progressive indicator goes long, he adds to his position. For example, as each of his MACD's goes long, he adds to the position. Obviously, there are many different variations to this. One that I have played with, is to follow Dave's MACD system this way. Break my capital (for this particular trade) up into three equal parts. As the first MACD goes long, I take a 1/3 position. When the second MACD goes long, I take a OPTION position with 1/3 of my capital. Then when the last MACD goes long, I take the final 1/3 position. One of the benefits of this system is that it makes the first position fairly conservative (only 1/3 of your trade captial, and a straight stock position). Then, when you have some equity in the trade, you take the more risky positon, being the options, which, if the trade goes south, allows you to give it room or exit with a break even. You could vary the % that you put in at each stage of the trade based on how much each stage is expected to move. For example, if you find (in this example) that the most price appreciation happens in the beggining, when the first MACD goes long, you might want to put 50% in at that time, and then perhaps 25% and 25% when each of the other MACD's go long. Henry Brookins takes a 1/2 position on a stock breakout and then the other 1/2 when is pulls back to support. The variation on these or your own systems are endless. BCL