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Friday was an excellent day to profit from information available, prior to
the event, for when the event happened.
If that sounds double Dutch, look at the attached .gif file and you will
see what I mean. You will see what reading the tape means. While Stig's
kinda' H&S formation may have led you to believe that the market was headed
down (or through some other means), those that day trade this instrument
will appreciate that the results of the 7.30 Report and the breaking of
Yesterday's Low was what actually counted.
Stopping on the Contract Low would have had most people exiting and taking
the subsequent reversal pattern straddling that line. They would have
then had to admit that it was a false move and exited with a small loss,
probably. But seeing the next pattern to continue the down move, the final
question was where was the market going to stop (and reverse).
The move down gave all the time in the world to seek and find out. The
actual stall for 25 minutes just one tick above this crucial line - and the
actual touching bar - would have heralded a good trade to any tape reader.
While I would not presume to predict what the market is going to do Today,
the stall on the previous Contract Low will probably be significant and set
up a trade with a good r/r/r and stop cover. The Nearby Resistance will no
doubt tip the scales...
This sort of trading does not require much more than Norm's "thumb and
finger" method, but it has to be said that a computer for drawing lines and
measuring accurately is a blessing for those who are not very numerate.
However, the best computer of them all, for day trading, is your eyes and
brain and its reaction to the price action. That's it!
Best of trading
Bill Eykyn
www.t-bondtrader.com
Attachment Converted: "c:\eudora\attach\0514 - Gotta Reverse on Summat.gif"
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