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<DIV><FONT face=Arial size=2>The last few days have highlighted, for the day
trader, how patterns point the way. While clearly there are other
important factors to be taken into account, it pays to take note of what the
market it saying to you, rather than listening to the extraneous talk of
pundits and gurus on CNBC, for example. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Look at the 'daily' chart below and you will see
that the false breakout of the wedge was very clear, with the 2-bar
reversal. The next bar was a dead ringer to be a down
bar. The odds were in your favour. It might well not continue
the day after or start a trend, but it was good for the day you were about to
trade - and that is what you are interested in. We then had a Doji
Sandwich, so that following bar was another dead ringer - this time to be an up
day. On either occasion you could not blindly sell or buy at the
open and know you would collect at the end of the day, but, you did know the
odds were in your favour and that the day was going to be the sort of day it
turned out to be. Not so far or furious, perhaps, or that Mr G's comments
were going to turn to gold for you - but you would have been long and going the
right way, ready to collect.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>I am not saying it is simple and there are, of
course, other vital bits of information that you need in order to confirm what
you are going to do in real time; and how you are going to get into the
trade, manage the trade, exit it, etc. But looking at what is in
front of you and gearing yourself up accordingly, is what day trading an
instrument like the bonds is all about. You only need very simple
tools applied in the proper way to read a market that mostly takes a measured
tread, as it wends its way through the trading day.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>At the end of the day, it is all a question of risk
reward ratios. If you stick to a minimum of 3:1, but often do 4, 5
or 6 to 1, then you can be wrong quite often and still put bread on the
table. Yesterday, you would have started with quite a modest r/r/r, but as
the market moved, your end result was massively in your favour. Such a day
people might say was luck, but the fact is it was a windfall - but you had to be
standing under the tree with reasonable expectation to gather the fruit, without
being bruised...</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The price action to day would most probably be a
follow through, from such a big bar. Logically, it might well get to
98^27 and it might go further or come off. What will tell you will be the
price action, as it is shaping up. You won't need, nor probably get, more
than that in terms of accuracy or in time. The market will set itself up
and it will probably be the way the stock market opens which will dictate what
happens... but it is the price action, the price pattern and where
it forms that counts... after that what you have to do is look at the
r/r/r of the trade you are considering and act accordingly.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Hope this is of help...</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Bill Eykyn<BR><A
href="http://www.t-bondtrader.com";>www.t-bondtrader.com</A><BR>"Learn to read
the tape"</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV></BODY></HTML>
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