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Walter
Good to hear from anyone on the RT list!
However, I am the worst numeric chap there is - promise!
BUT...
I can spot patterns and appreciate pictures and react accordingly.
Therefore, I hope you can open the attached .gif file for Friday's action on
the Bonds and will understand it all. In fact, I will post this to RT, so
that others may benefit and I hope that is okay with you?
The whole point about using the retracement tool (not in isolation, of
course) is that it is helping you to react to the market, as you are looking
at it. While it is only a tool, it is showing you what you ought to be
doing when the market gets to a certain point - which, as far as I am
concerned, is better than any of the many lagging indicators trying to tell
you what the market's going to do - usually after the event!
Once you use the tool, you will see that stop placement becomes very
logical. If it is sensible to let the market tell you what it is doing,
then you cannot have a stop in the way because someone tells you that your
risk/reward ratio dictates it! This is on the Bonds, of course.
Do you trade the Bonds? I am only talking the Bonds (and perhaps the
currencies which I have also traded). Generally, I would have thought the
Spoo is far too volatile to be able to use this sort of technique. An
intraday .618 retracement could cost a few thousand per contract to find out
it was a reversal, after all!! And, beside, the S&P moves too damn
quickly. The slippage alone can be the worth of a whole Bond swing! For me
the Spoo is big accounts and big positional play and while I am sure
Fiboncacia works just as well, I, personally, do not know how you trade it
and put the knowledge into practice, successfully, in that market. It seems
to me that it's big bucks when you win - and praying your your stop will be
executed somewhere near your price, on the losses! Actually, I shall
probably use this example within the manual - without, hopefully, any errors
and fully annotated.
I am nearing completion of the manual - written for the novice and newbie,
thinking about trading for a living - but it would or should be helpful to
anyone (how ever experienced they are) starting to trade the Bonds for the
first time. I'll keep you posted, but in the mean time, I hope it helps you
see where stops have to be placed, using Fibonacci retracements - on the
Bonds, if nothing else.
Good luck and hope this helps,
Bill Eykyn
Attachment Converted: "c:\eudora\attach\Fib Retracements and Stops.gif"
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