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This is really basic stuff, but there are newbies and silent lurkers on RT
that this concept is new to. Basically pivot trading means buying at
support and selling at resistance. If either resistance or support is
broken, then the next level becomes a target. The gotchas are the tricks
the "floor", the "pit", plays on the off the floor traders. They will
often move the market into the logical stop zone, taking them out and then
reversing. In today's trading S1 held, infact the turn was slightly above
S1, when the buyers came in representing strength. The keyline, yellow,
was tested from both sides before a run to R1. Mkt backed off from R1,
then blasted through R1 taking out stops just above on its way to R2 when
the circuit breakers came in. Personally, coming into today my bias was
bearish so I avoided the buy at S1 and waited for a rally where the
stochastic momentum was overbought and Resistance was being challenged
before considering puts or going short. In addition I want to see some
divergences in flow rate and issue and volume oscillators. As of 11:08
advancing issues and volume are still greater than declining volume but
about to reverse. So the only short I would begin to take seriously is at
point A.
BobR
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