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I have yet to see a chart that already didn't have a sell signal when the price shock
hit. There is always a signal that fortells Either up or Down. You have to always
note that at any given time there is always and up trade and a down trade. The
problem is that many inexperienced traders seem to get caught up in direction, trend,
and lose the perspective needed to be a trader. Your chosen vocation, profession, is
to trade, not guess. Just change your time of reference and you can change the
trend. No big deal. You just have to understand how to trade it. A moving average,
ADX, CCI or any other indicator is not going to tell you where the top is. With
astro, Eliot, Gann you are guessing that an event will happen about a certain time or
a certain line. The law of probability will give you that because so many things
happen on lunar or astro dates. Planting, harvest, breeding, quarterly reports, labor
contracts and dozens of other things. Before I short, I want to know the top is
in. Before I go long, I want to know that the bottom is there. I never guess and
buy bottoms or scale down hoping that something that happened in the past will
reoccur. I never sell a top because it is a volume reversal, some lunar event or
short scaling up because some phenomena says it is the top. Some one else can have
the top 10%, and the bottom 10%, I am interested in the sure 80% in the middle.
I keep reading the sky is falling and then when it starts to fall all I read about is
support here and support there. It appears that many are in a guessing game and they
are interested in being right . I am not interested in guessing tops or bottoms, my
only concern is extracting cash money from the markets, not kudos from the easily
impressed. Have a good week end. Ira.
Joe Frabosilio wrote:
> Wong,
>
> All this is IMO, playing the news. Nothing new, just a fancy name. Being a
> trader who uses TA and some type of rules, I do have to question the written
> passage.
>
> "Price Shocks have No Rules or patterns that can be applied in advance." --Just
> roll the dice.
>
> "Because they are always unexpected, then can occur anytime during any
> market"--So, he thinks the markets are random????
>
> IMO this will hurt you. A stock that shoots to the moon, example: from 2-50 in
> one or two days. This is something you short. That day or the next. A blue
> chip stock comes in with bad earnings and the price drop in afterhours, you need
> some type of rules for entry and exit, for that day or next. Otherwise the stock
> chart can look like : S, KM, GT, MO.
>
> Just my thoughts,
>
> Joe Frabosilio
>
> wong wrote:
>
> > Hi All:
> >
> > Though this is a general topic, for me, it's more for the stocks than futures.
> >
> > Here's an extract from Kaufman's "Smarter Trading" on price shock. (It
> > runs on for a number of pages more.)
> >
> > We've witnessed a number of high-flying stocks like QCOM, LU, EMC, AMGN...
> > that have quarterly reports or other news and then ... wow ...
> >
> > I don't know how to read charts accurately, so I'll leave this to the
> > experts here.
> >
> > If we can identify which stocks have the type (c) formation (cf the
> > attached file) - a "false" shock, and be ready to enter long on some of
> > these "fallen angels", either stock or leaps/calls, we'd stand to gain a
> > lot....
> >
> > Any follow-up?
> >
> > Regards,
> >
> > Wong
> >
> > ------------------------------------------------------------------------
> > Name: price shock.JPG
> > price shock.JPG Type: JPEG Image (image/jpeg)
> > Encoding: base64
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