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Paul,
It amazes me to see the huge variety of "packaging" methods and hype
associated with so many of the systems and strategies being offered for
sale. But it has to be that way because if most traders knew that there
really is less than meets the eye to successful trading then how could
one sell this stuff.
Please correct me if I'm wrong but it seems to me that every profitable
trader does the same thing:
1. finds a trending market and enters on a pullback
2. or finds a trading range market and trades the swings
3. or finds a potential breakout situation and goes with the
flow
4. or finds what looks like a top or bottom formation and
climbs on for the return trip.
If a trader doesn't know which of these 4 things he's doing then he
doesn't know what he's doing. I'm probably slower than most but all I
know is that, over the years, I've tried many different methods and lost
a lot of money with some of them because they were not applied under the
proper market conditions. For me, identifying that market condition was
the real key (along with good money management).
We've discussed several books/articles about trading strategies recently
and most if not all of them, while utilizing different indicators, come
to the same conclusions; whether its entering a breakout after a
pullback to a 20-period moving average, or a breakout after an
overextended %R against weekly macdhistogram in the opposite direction,
or when 7K meets 10D on the Fast Stochastic etc. etc. DON'T trade
against the next higher time frame! That's item (1) above.
Item (2) might include Charles Lindsey's arithmetic trident method, or
Taylor's 3 day rules, or Linda Raschke's proprietary Momentum Pinball,
or Larry Connors proprietary 80-20's etc. All saying essentially the
same thing but just in a little different way - get in, get out, this is
only a quickie!
Item (3) might include inside days, narrow-sideways channels, triangle
and flag formations, range expansion - ENTER ON A STOP; DON'T FADE.
Enjoy the ride.
Item (4) top and bottom formations - well, I guess everybody knows what
they are - no need to elaborate. (grin!)
Don't get me wrong. I love the work and important contribution that all
of the authors of all of the books on trading, and their seminars have
made, but it still boils down to the fact that no matter how many ways
you look at the same market, it is still the same market and must be
approached in a certain way under certain conditions. To do otherwise
is to try to impose your own will on it.
Thanks to all the RTs out there that have been so helpful in their
contributions to the cause of identifying market conditions and how to
approach them.
That's it. No big deal. Let's all just get out there and do it.
Pete
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