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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (1293)	12/11/1998 2:51:00 AM
From: Doug R	Read Replies (4) \| Respond to of 99985

ya think??? There's actually a difference between your basic, generic TA and TA done properly. Tails wagging dogs is a world apart from using proper TA in a systematic risk/reward regimen with an eye toward supply and demand. One example; say a stock gaps down from 21 to 14...close to open (a 30% or more gap down is required). What can generic TA tell you? Nothing. What can proper TA tell you? Proper TA can tell you that such a stock is an optimal risk/reward buy AFTER the following occurs: First...wait at least 3 weeks after the gap. Then...track the price looking for the first day that it makes a new post-gap intraday low and closes with the bid at least one tick off the low on greater volume than each of at least the previous 3 days. Buy an equal dollar amount of every stock that does that. Set a stop loss 2 ticks below the signal day low and use a systematically proper signal in the 8, 3, 5 stochastics as a sell signal for the stocks that go up. You'll find that this system pays absolutely no attention to profit margins, shareholder lawsuits, contracts, sales, ROE, PE or anything else fundamental...it just makes money. I call it the Post Gap Dead Cat Exhaustion Bottom. I have a bunch of purely technical stuff that in no way is self fulfilling prophecy because there's only a tiny handful of people that know them much less use them on every stock. ASHW was the latest PGDCEB I played...buying on Tuesday and Wednesday. When you can develop TA beyond what is written in the popular literature on the subject, you can go beyond the dog's tail. Doug R