Stupid question of the day...

Please bear with me...

OK. I was reading the thread by FTSE Beater on the basics of trading anfd I opened one of the links that he put in for BAY (British Airways)...

Of course (I know now) when I opened the link, it showed a chart for today, not for when he made the post.

The thing is that looking at it, I wouldn't know where to draw the lines for support, resistance, trends etc...and I figured part of that was to do with the recent 'correction' in the markets..

So, the question is, how does charting deal with these corrections when pretty much the whole market is being sold off?

My second question or need for feedback is this:

Looking at the chart, I thought that there could be a considerable upside to this share and wondered what I would do if I were actually trading yet.

So my idea would be

Go long..the price was 524.5 at the time so I went for 525 buy
Target 575
SL 515.

Please can you experienced guys tell me whether this is:

1) Ambitious
2) Cautious
3) Completely stupid
4) About right

Also, is it too long term going for a target of 575 and should I take less over a shorter period.

Any feedback appreciated plus the answer to the charting question...

Thanks,

RB

Ratbag said:

The thing is that looking at it, I wouldn't know where to draw the lines for support, resistance, trends etc...and I figured part of that was to do with the recent 'correction' in the markets..
So, the question is, how does charting deal with these corrections when pretty much the whole market is being sold off?

My second question or need for feedback is this:
Looking at the chart, I thought that there could be a considerable upside to this share and wondered what I would do if I were actually trading yet.
So my idea would be

Go long..the price was 524.5 at the time so I went for 525 buy
Target 575
SL 515.

Please can you experienced guys tell me whether this is:
1) Ambitious
2) Cautious
3) Completely stupid
4) About right

Also, is it too long term going for a target of 575 and should I take less over a shorter period.

Click to expand...

Hi RB,
Me again! Your questions encompass a multitude of different aspects of trading, many of which only you can answer. For example, you ask whether to go long @ 525 is ambitious / cautious etc. This depends on your trading style and strategy. If you have a trading plan in place, then all 4 of your questions will be answered. For some traders it will be pure gambling to go long here (because the entry negates their trading plan - assuming that they have one), while for others it will be a 'no brainer'. As with all instruments all of the time, some traders will be exiting BAY @ 525 just as others are getting into it. Some will profit and some will lose. Another trader could enter at exactly the same price as you, but place their stop a mere 1p lower than you, with the result that you are stopped out for a loss, while s/he goes on to make a huge profit! So, it's difficult to impossible to say whether or not your entry, SL and target are any good or not because without the context of a trading plan its somewhat meaningless.

I'm sorry if the above sounds rather negative and unhelpful - it isn't meant to be. To finish on a more constructive note, attached are 3 charts of BAY: a weekly, daily and a P&F 5p box - 3 reversal chart. Perhaps you would like to draw trend lines, S&R etc. where you think they should be and provide a rationale for your entry, SL and target. Then other members will have something more concrete to comment upon. As Mr. Charts said on your other thread, you're embarking on a long journey - but boy is it a fascinating one.
Enjoy!
Tim.
(For more info' on trading plans, click on the K'Lab icon beneath my name).