 Wysłany: Nie 1:57, 13 Mar 2011 Temat postu: 6997 |
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| Confirming Your Trades for Better Trades
I have noticed an AMAZING number of students placing trades that have gone wrong and if they could have done what I call "A ROUND ROBIN" it likely could have prevented the cost. I would like to share what I do in my "ROUND ROBIN" before entering a new trade or deciding to exit an existing trade: 1. I prefer to look at both Micro and Macro (short-term and long-term) views of the stock. Sometimes if I am going to enter or exit a short-term trade it really makes a big difference to get out of the intra-day chart (micro-view) and go look at the bigger picture. I open a one month or longer chart (macro-view) to see the longer term trend. This sounds very simple and it is, but for some reason in the heat of the decision we feel so pressured that we tend to forget to look at the big picture. It is hard to see the forest from the trees so if you are looking at intra-day charts do yourself a favor and check what the actual trend is by looking at the daily charts too. Recently I have seen a number of people buy calls at a double top in a down trending market and I am just amazed at their decision. It seems like these people are expecting the stock to defy the laws of gravity and principles of physics (what goes up, comes back down; what goes down, usually goes up). If they had done a "Round Robin" they would have been less likely to make such a self destructive high risk decision. 2. I like to confirm my decision with other indicators. For an intra-day view I like the TRIN and the TICK. Since I trade mostly NASDAQ stocks I use $NASTRIN and $NASTICK. These tell me some very important things: TRIN: It is a short term trading indicator. Essentially this indicator is achieved by taking the advances to declines spread and dividing that by the volume of advances to declines*. $1 or higher BEARISH $. 80 to $1 NEUTRAL, meaning it means nothing to me $. 80 or Lower BULLISH *If you are a technically minded person you can calculate this indicator. It is a ratio calculated as follows. Using Nasdaq Index, complete this formula: ((# of advancing issues / # of declining issues) / (Total up volume / Total down volume)). TICK: Gives me an idea if we are heading up or down in the short term*. 200+ BULLISH + 200 to - 200 NEUTRAL ZONE 200- BEARISH *If you are a technically minded person you can calculate the TICK indicator by subtracting the number of stocks heading down from the number of stocks heading up. COMPARE TRIN & TICK: At first look, notice that the two indicators are contrarians of each other. Which means that to be Bullish the TRIN will be moving lower and the TICK will be moving higher. To be Bearish the TRIN will be moving higher and the TICK will be moving lower. On the TICK I like to draw support and resistance & look at it like a stock to see if the indicator is heading down or up at a given moment. It is the movement and direction of the movement that indicates the strength of the direction. NOTE: I teach more detailed information on this in my QQQ class 3. Then I like to look at the market that the stock follows and confirm that the market is doing what the stock is doing (both are headed up, or down). The only exception is if news is causing my stock to go opposite of the market, then I discount the market direction. To find out what market your stock actually follows overlay the market you think it follows on your stock (in the same chart). In my charting program (Trade Navigator) you just press "C" and it will overlay it on top of the stock chart. You can then double click on the market ticker symbol to remove it from your chart. Some stocks do not follow the market they are in. For example KKD used to follow the opposite of the NASDAQ but not the NYSE (if the NASDAQ was going up KKD would be moving down). MSFT is listed on both the DOW JONES 30 and the NASDAQ 100 but it tends to follow the NASDAQ more. 4. I now look back at the micro view of stock to confirm my decision before I jump in or out of a trade. It is always a good idea to check the news too. And always know the earnings date of your stock before you enter a trade. ROUND ROBIN VIEW: I always do the "ROUND ROBIN". It can sure save you from making the wrong trade, and entering or exiting to soon or too late a high percentage of the time. It is always best to go with the trend, with an exception of doing a one day trade where you hope to be in and out in the same day. In that case you are playing support and resistance for the day and you can go against the longer-term trend during that time. You might consider using different views anyway. You could use 1-min, 5-min, and 1-hour charts. If you have taken my QQQ class, remember to use the "Pivot Point" information in your decisions - it will prove to be invaluable, especially for short term trades. Once you return to the MICRO View you will have completed the "Round Robin" process. It only takes a few moments, when you have practiced, and it's a quick way to check what is happening. The time you spend doing the "Round Robin" will be well spent because of the tremendous information and decision making value. If you would like to learn more about my trading philosophy I invite you to attend my trading workshops in person or participate in my free online trading seminars. Happy Trading... and by the way don't forget to check out tonight's online web class "UPCOMING POWER PROFIT PLAYS" where you will be spoon fed the hottest trades available. Happy Trading, Darlene with BetterTradesContent Source: Better Trades with Confidence from their BetterTrades Service FeaturesTopics related articles： tod 3925 8451 tod 5548 |
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