|
PureBytes Links
Trading Reference Links
|
I've already posted my observations on the S&P so the only comment I would
add is that trying to buy/sell breakouts from this kind of consolidation is
likely to prove a losing game and very troubling to those who like to
position trade with reasonable stops. Generally, consolidation patterns are
best traded by buying at the bottom of the (alleged) pattern and selling at
the top until such time as the momentum from top or bottom is strong enough
to carry the trade through a true breakout.
Formations which can be detected in March S&P: daily double top, daily
symmetrical wedge, daily bearish triangle, weekly bullish flag, not to
mention all manner of intraday wedges, triangles and H&S.
Earl
-----Original Message-----
From: Bill Bancroft <bbancroft@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Monday, February 22, 1999 7:01 AM
Subject: S&P
>Group,
>
>Last week was a ID/NR7 (inside week/narrowest range of the last seven
>weeks) in the March S&P futures contract. Obviously, the market has
>been consolidating in a trading range. The daily ADX is down to 11.
>Many large moves start from such a consolidated position. Question is,
>how do we trade this pattern?
>
>Well, there are many ways to trade breakouts: one could simply buy
>(sell) if the price takes out the weekly high (low);
>one could buy (sell) if the price takes out the previous week's high
>(low);
>one could buy (sell) a breakout from a percentage of the recent range;
>one could buy (sell) a breakout from Friday's close or today's open;
>OR one could buy (sell) a breakout of the trading range;...The
>possibilities are endless.
>
>It is just as important to know what NOT to do. LBR has pointed out
>that swing trading does not work in low volatility enviroments. I can
>vouch for that---my 3/10/16 oscillator is useless right now because
>there are no oscillations to measure. I did not talk about what
>direction I thought it was going to go, because I do not see a bias one
>way or the other, but I hope to be prepared either way it goes.
>Thoughts/observations?
>
>Bill Bancroft
>
>
>
|