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In a message dated 3/9/00 10:25:59 PM Eastern Standard Time, whs@xxxxxxxxxxxx
writes:
<< 1. In a bull market:
- most oscillator indicators that are in overbought territories ARE NOT
short signals
- to try to short futures/indices/stocks etc is not very wise, in
general
2. In a bear market, the reverse is true:
- most oscillator indicators that are in oversold territories ARE NOT
long
signals
- to try to go long is courting disaster, in general (ah ha! I may be
guilty of this,
because I'm a perennial bottomfisher - but then I have my averaging
down buy
strategy, which over the years has benefited my trading a lot, so far)
3. In general, whether in a bull or bear market:
- when the oscillator indicators are in the extremes (overbought or
oversold areas),
the investors are alerted to a possible (though not necessary)
reversal
in the
future - the wise move is to UNLOAD whatever you are in (for long,
get out
of the long position and stay flat; for short, get out of the short
position and
stay flat). unless this temporary reversal is PRECEDED by a DEFINITE
and
CLEAR-CUT
indication of a LONG-TERM reversal in trend.
- unless one has almost perfect timing, it will be quite risky, for
example, to
go short on NASDQ futures, for example (day-trading is a different
story)
I don't have statistical proof of what I've said, but I get the idea from
reading a number of books on investment. And I do believe what I mention
here is slightly better than flipping a coin.
So, I agree that with an overheated stock market as we're in now, any time,
we're due for a correction, maybe pretty substantial.
What I can't understand is why any impending correction or crash HAS TO BE
similar to the 1929 crash.
Regards,
Wong >>
if you trade long enough you learn how to design you own indicators,
which overbought and oversold do work! ,
and many are LEADING indicators
i have shared with the group a few,, and bob R was nice enough to
show them in a GIF format to the group,,
trading is a job
you take as seriously as having very strict boss.. i.e. your pocket book
and with long enough time trading you develop an eye for a chart pattern
this one has VERY high correlation
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