The money flow gives a nod to the bulls at the close since the line moved above the thin black trend line. The thin green lines for the indicators show a long and strong profile for the very short time frame. The red lines show that the another low in price needs explored at the lows from late yesterday. The very short term momo should permit price to tag the top rail of the channel. Look at how the 8 MA and 34 MA are on top of each other now so watch them closely after Wednesday's open. For now, the bears are in control (8 is below the 34), by a hair. During OpEx week, the broad indexes are typically buoyant from Tuesday into Wednesday, thus, perhaps price prints at the top of the channel tomorrow to satisfy this expectation. Sideways behavior was anticipated this week ahead of the Greece elections and so far it is playing out. Watch for the move out of the blue channel, either above 1326 where bulls will throw confetti, or under 1307 where the bears will celebrate. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial adviosr before making any investment decision.
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ReplyDeleteCant get my iPad to paste my comment o-well...
DeleteKS, I am sending my daily "thank you" and knowing you'll want nothing of it, consider you a God-send. A profound "Danke" to you.
ReplyDeleteOn more practical matters, could you share your rule of thumb on stops? Would not mind hearing from any of the more experienced traders on that question as well. MCAP, Arnie, Weaver, Zig, and more -- Your comments enlighten me as well, and are very much appreciated.
- Ande
I am joining Ande to thank all of you for sharing your experience in trading especially KS opening this website and make it available to everyone to join the fun and excitement in this volatile market. Thanks again! kf
DeleteDanke all for the kind words. The commentary on the chart for this post had to be corrected this morning since the bears are in control with the 8 MA under the 34 MA (Keystone mistakenly wrote that the 8 is above the 34 last evening) but all of you following along would have realized that. So watch the 8 and 34 MA today. Keystone must have been delerious from the heart palpatations earlier in the day.
ReplyDeleteOn stops, every trader has to decide for themselves on how to handle them. Typically a 2% loss can be used to exit a losing position as a rule of thumb. Some traders use dollar amounts, set a limit for yourself, say you are willing to lose, 200, maybe 500, maybe more, so you use that as a stop guide. A lot ok Keystone's trading here is divergence-style trading which focuses on calling tops and bottoms (not recommended for most traders starting out since it is extremely dangerous trading), so much more leniency to price is allowed. Most knife-catches continue lower as a bottom is attempted to be targeted using positive divergences.
The best stops are mental stops, commit to one of the ideas above and firmly stick to your guns, avoid placing the stops with the brokers since the market makers will gun for you, flush the price down to flush you out, then pop it far higher without you on the bus. The trick with mental stops is staying fully committed since when the trade goes the wrong way, the plan for a stop is rationalized to be increased, since, the stock will surely come back, won't it? That is the problem, trading has to be highly discilplined, so whatever methodology you choose depending on the style of trade, stick to you guns, if you are willing to take a 2% loss, if it occurs, take it and move on.
Also, when you enter the trade is when you should think about all this, write down what entry price you want, what price you will take a loss, and what price you want to target where you will exit with profit. Be 'stingy' on the entry, you only get one chance to set up a good trade, especially if trading with limited funds.
Im on board for a ks kudos too... as for stops agreed mental stops written down is good approach but you have to have the displine to off out the position when you get to that price...most cant what does work well is an average true range of price activity plus a little depending on what your trading... That works well as trailing stop as well.
ReplyDelete