Day Trading & Forex Forum

leovirgo

Ok, here I am starting a new thread to help newbies. It doesn't mean that I am not a newbie, I have a few years experience of learning how to trade. I had to learn the hard way. And I am not an expert, not yet, but I believe sharing is good. My online mentor Grey1 said .. "open the door and the door shall be opened to you in mysterious ways..". I will be posting how I trade, specifically on $INDU (ym futures) and US stocks. My 2cents to newbies is .. "Pay attention to broad market".

Today, for example, is 'No Buying day'. US congress voted down the rescue package. Many fund managers thought it had to be passed. It didn't and the market tanked.

Here is the set up and how it should be traded.

1. NYSE market breadth was bearish ( < -2000 ) since the opening. It means only one thing to me. It's not a buy day. If it is consistently bearish (red) the whole day, it is a good set up for shorting the dow.

2. NYSE Volumes were bearish too. (On buying days, it'll be blue colors or neutral colors.)

Regardless of the outcome to the vote, the market set up, to me, was to the downside. So we can sell the market at the red dots. Use any kind of method to sell the market today.

[ If the bailout had been passed, then we should see the rise in Market Breadth and NYSE Volume upticks. ]

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leovirgo

The chart speaks for itself.

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keano

not being a wise guy.
You do mean today, as in 30/09/2008 as not being a buy day?? We closed up 50 odd handles on the spx today...?
cheers.

leovirgo

My post no #1 refers to 29th. Second post is about 30th. Check the dateline in the posts mate..who is not wise? cheers

leovirgo

Today, the market internals were a bit bearish, $ADD in red territory. But volumes were neutral-short bias until mid day. see the chart below..

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leovirgo

Listen to the market.. it rarely goes wrong.. this was a very good move!!

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brutusdog

could you elaborate on your entry criteria please leo, i get the market conditions aspec but would like to see how you define your entry point good thread by the way.

leovirgo

When the NYSE market internals are bearish, I go short at oscillator crossings, such as Inverse Fisher. On the chart there was a red 'show me' dot which says oscillator crossing has happened when market conditions are bearish. My stoploss would be the red supertrend line, which is basically 3ATR in 5mins timeframe. Target is abit subjective, but the blue line (Buy number, i.e the anticipated lowest pivot ) and the green line ( which is support line based on 1Hr range) are good points to cover short positions as consolidation tends to happen at these level. hope this helps..