|
PureBytes Links
Trading Reference Links
|
Robert,
Thanks for your tips and comments. They are very much appreciated. A couple
of ?s How are you establishing a base? a trendline,support or what? Could
you use intaday stochastics to time the reversal also?
When just starting out and with limited funds could one just use a
synthetic future(either a put or call ) instead of a stop to control my risk?
ramon
Robert Doeden wrote:
> A key reversal day on an uptrending stock or commodity is where a stock
> hits a new high yesterday, Goes higher today and then closes today below
> yesterdays low. The opposite is true for a key reversal day in a
> downtrending stock.
>
> I'll give a tip to those looking at commodities: I look for a commodity
> that is downtrending to establish a base. Then if that base is broken on
> the downside I watch very carefully the day after the break down. If that
> commodity begins to turn the second day I buy. You can do the same with
> an uptrending commodity but of course you look for an upside breakout than
> won't hold the second day and sell.
>
> The rational is very simple. It is highly probable that the breakdown or
> break out is the result of the floor traders hitting the stops. If there
> is no followthrough it is likely the situation will reverse direction.
>
> When I first started I tried using stops to control my risk. Didn't make
> any money. I decided that that wasn't the way to make money so I stopped
> using stops. I then started making money in commodities. At the time I
> was only trading a $10,000 account so the risk I was taking was
> substantial. Before anyone else tries this you better do some thinking
> about your trading skills, you ability to handle loss, your overall
> financial situation, ect. You sure don't want to risk the rent money on
> commodities.
>
> As I built up my account I found out that the more money I had in my
> account the easier it was to make money. The reason is very simple. I
> could use much better money management when I had more money. There is
> not a lot of money management you can do with $10,000. With that amount
> you can only trade 1 contract at a time. With a large account you can
> spread your risk among several positions and you can take meaningful
> positions with only risking a small portion of your account. Presently my
> maximum position in any one commodity is 10 contracts. I don't go out and
> buy 10 contracts at once. I scale in and if I hit the trend right will
> continually sell on spurts and buy on dips keeping a maximum position of
> 10. By using good money management I reduce my risk.
>
> Someone else wrote an excellent post on money management recently. Money
> management is the key to market success.
>
> Bob Doeden
> ===========================================================
>
> Harley Meyer wrote:
>
> > I had posted this guestion before. No reply so again. Does anyone know
> > how the 'key reversal day' is defined?
|