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Brent:
Surely you would be buying on a pullback of an existing intraday trend
as a day trader. But you can also buy on breakout of congestion area and
buy or sell during points of exhaustion.
If you are a daytrader, why do you need to look back a month to see
that the trend is up. All you needed to know is the we were making higher
lows in the last few days. In addition, outside of the abnormal spike-up due
to the Fed announcement on the 17th, today we managed to exceed the highs of
last three days.
As to your question why someone would go short today on the S&P's ? At
2:30 pm which is very high probability time for reversal, some call it "Gann
Time". We were approaching 1157 on the Dec S&P which is the spiked high we
reach on Tuesday. A reversal at that point would make a double top. Plus
1155 was a pivot point. A lot of times during lunch hours, the floor
brokers in the S&P pits love to take the market to a previous high or low to
take out the stops, then the market would soon reverse. But of course with
hindsight, this would not turned out to be a good trade. Nevertheless, this
would have been a high probability trade, because when we are wrong we can
cut our losses quickly, but if we are right, we get to ride the big trendy
move that usually occurs during the last hour of trading.
Regards,
John
>At 08:47 PM 11/19/98 -0700, you wrote:
>>Hello RT's,
>>
>>I've been reading a chat channel for a few weeks that has a number of day
>>traders on it mostly trading Spoos and Boos. It has been interesting to say
>>the least. It appears to me that most of these traders trade off of Support
>>and Resistance, Fibonacci levels, or pivots within that intra-day data. Most
>>of these traders put on both long and short positions within the same day. I
>>have read a significant amount of grumbling about their trades and the
>>quality of that day for day trading.
>>
>>What I don't understand is not using the prevailing trend and the developing
>>intra-day trend to simply buy/sell pullbacks. For example going into the
>>Spoos today we have a super strong upward move that has lasted more then a
>>month. The fed cut rates. The trade is still within an ascending channel
>>etc., etc. So why were some of these traders shorting today?
>>
>>I tried day trading once some time ago and took a beating but with some
>>research and careful observation I was thinking of trying it again. Am I
>>missing something or is what they are doing an ineffective thing to do?
>>
>>Brent
>>
>>
>
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