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Someone asked what techniques I used and what time frame I trade. First
the time frame. Finding a time frame that suits your own temperment is
important. For me, some markets are very good for day-trading. I am
short-term trader in the US bond markets and t-note markets. Most days,
I'll make trades in several directions in the bond markets [if they are
moving in an ordered fashion] and there are many days when I will carry
home a long or short position in these markets and let these markets
play themselves out the next morning. I do try to let these short term
trends play themselves out before exiting or reversing my position.
Many other markets now only suit me as longer-term positioning markets.
I used to trade currencies extremely actively during the day. These
days, my currency trades are smaller in size and much longer in duration
[from a week or so to several months in duration]. And I don't usually
reverse positions in the currency markets. I tend to take my profits and
walk away and wait for the next setup. Copper is another great
longer-term market for me and so is heating oil and natural gas. I'll
even add eurodollar furues to this longer term list. I do watch and
trade the grains and softs, but I don't trade the meat markets very
often.
In the past year or so, I have stayed away from the foreign markets. My
BMI feed doesn't have live feeds, and as I have become so accustomed to
seeing a live quote when I wish to see one, I have found myself seeing
setups for trades in these markets and just passing on them. That's one
area I'd like to improve in my trading in 1998. If I can see the setups
on a daily chart and have stops and profit objectives that fit my
parameters, I should take the trades. But, everyone is human.
For techniques, like my charting, I don't use anything fancy. I draw
lines. I look for tested trend lines and tested support and resistance.
I love to trade breakouts from congestion. I hand-draw Andrews
pitchforks on my charts and I also hand-draw in fib retracements and
projections[Ok, I'll admit I do use a piece of software to help me with
projections and fib support...Fibnodes, by Joe DiNapoli]. Again, none of
this stuff is new or sexy or complicated. But it works for me.
I start out each afternoon by updating my hand-drawn charts and then I
update my daily data on my computer. Then I'll page through the
thirty-odd markets I follow on my computer charting screen and look for
simple setups like congestion[where would a breakout occur?] or test of
a trendline or test of support or resistance or the testing of an
important Andrews line. If I like the setup, I print a copy, write down
my opinions on the trade and where I'd get in and out of the trade[stops
and profits]. Then I let it sit overnight. I re-read it in the morning
and if I still like it, I get a morning call and put the orders in the
markets.
Tim Morge
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