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There are different ways of trading volatility breakouts..
Be careful not buy very overbought, or short very oversold charts.. To do
so is to play with fire.
Charts have a habit of making strong reversals when extremely
overbought/oversold.
One strategy I use is to wait for the reversal to begin at a significant
Fibonacci level, then enter
in the direction counter to volatile thrust... This entry can be some
time after the initial breakout.
-Neal.
At 08:50 PM 2/10/2002 -0500, you wrote:
Ric,
I want to learn more about the volatility breakout trading method
you mentioned in your email below. I went to your website and could
not find anything on it. Could you please send me more information
about it, or direct me to find such info. Thank you.
Sincerely,
Bill
In a message dated 2/10/2002 8:12:59 AM Pacific
Standard Time, ringram@xxxxxxxxxxxxx writes:
Subj:[RT] A mere student speaks
Date:2/10/2002 8:12:59 AM Pacific Standard Time
From:ringram@xxxxxxxxxxxxx
Reply-to:realtraders@xxxxxxxxxxxxxxx
To:realtraders@xxxxxxxxxxxxxxx
Hi,
I am a student of the easy, still learning.
I do not claim to be a master of anything, let alone a master of the
difficult act of trading with the trend.
I am not a good enough trader to make money trading the trend - I leave
that to the masters of the difficult.
One of my personal problems, which I am actively working on, is a
tendency to look for others motivations. This is
self-destructive, as there is then an inclination to use such an (often
false) assumption as lens to evaluate what they say and do.
False conclusions, more a reflection of myself than reality, are the
result. In trading this means losses.
One of the advantages I find in the following three trading styles:
- spread trading,
- volatility
breakout trading,
- market making,
is I need to make little or no projections. Even
if a forecast proves wrong, a higher probability trade becomes
available. In other words my predilection for false
assumptions through using motivation as a lens has little chance to
undermine my trading results.
Many other traders seem to suffer, to one degree or another, from my
problem of evaluation through a lens of presumed motivation - in fact it
seems to be a rare person that has mostly overcome this tendency.
Perhaps that is why the majority of traders with consistent 50% plus
annual returns and limited draw-downs use one or more of the above three
trading styles.
But perhaps I am a master of one thing - a master of being wrong for I am
wrong so often, I must be getting expert at it - especially when I look
for others motivations.
And I do love being wrong - it is one of the best ways to learn.
Unconditional regards, Ric.
www.traderscalm.com
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