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The days of using pivots and fibs is not gone - the noise level has simply
risen to the point where it is far more difficult to use very short time
frame charts such as the 1 & 5 min which I use. Pivots and fibs are still
working fine in higher time frames. The noise, as indicated by the extremely
deep retracements and lack of follow-through on thrusts which show
exceptionally strong initial strength, is an indication of greater fear and
lower liquidity. One has choice of standing aside until noise level
subsides, or using wider stops and higher time frames. Once my win/loss
ratio suddenly shifted for the worse, I evaluated the reasons, reached the
above conclusions, printed lots of screen shots for my trading manual, and
stood aside.
Earl
-----Original Message-----
From: Michael Guess <mjg@xxxxxxx>
To: eadamy@xxxxxxxxxx <eadamy@xxxxxxxxxx>; RealTraders Discussion Group
<realtraders@xxxxxxxxxxxxxx>
Date: Friday, November 20, 1998 9:28 AM
Subject: Re: Day Trading aspects.
>Earl & others:
>
>Lately I've noticed that what had been working for me before (entering w/
>the trend on pullbacks on a 3 or 5min chart) has lacked "follow through"
>for the last few weeks. I'd get a signal to enter, the mkt would move in
>the expected direction, falter or go sideways, then fail. It would often
>retrace back to the .618 level & then resume the move I'd originally hoped
>to catch.
>
>I've chatted w/ some other SP daytraders & it seems to us that as newer
>money/traders come into daytrading lately, the pros have adapted to this
>by curtailing moves off pivots; i.e., because of their experience &/or
>deeper pockets they can stand the heat down to nearly a previous swing
>level before riding a move back on up through their entry and beyond. Also,
>it seems this has been happening on less volume.
>
>Are the days of entering correctly & having the mkt prove itself almost
>immediately gone? Extracting $$ from the SP has never been easy but after
>the bout with heavy volatility (fortunately now it's better behaved) we now
>seem to have a "wishy washy" mkt that won't follow through on moves.
>
>Opinions?
>
>Michael
>
>
>At 07:21 AM 11/20/98 -0700, Earl Adamy wrote:
>
>>As for trend, it's always relative. Because a day trader is focused on
>>shorter time frames, it's possible to trade counter-trend moves using say
>>30/5/1 minute charts which one would not see on w/d/30 charts. That said,
I
>>still generally use short term counter-trend moves to enter in the
direction
>>of daily trend. That is if daily trend is long, I will use 1 and 5 minute
>>charts to enter trades against an intraday short trend so as to position
>>myself for next move with the long trend.
>>
>>Earl
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