Hi Grey1
Today the market was down- DOW gapdown and -120 at the lowest point. According to your top down approach, a day trader should Sellshort weak stocks. For me, shortselling was the only option today and hence short weak ones like KLAC and GILD etc.I noticed that you were buying AMZN and BRCM, making decent profits. Did you buy them based on good news alone or was there any 'technical' reason?
thanks, ..
leo
A top down approach does not mean only go short when market is in negative ,, far from it. This is what I have been shouting all the time that most traders do not have an understanding of market Phase and what phase the market is going through ,,
What you need is an understanding of market phase as this is vital in trading ,, It does not matter whether u are a news trader or technical or statistical trader,, there is a phase that you short stocks and a phase that u long stocks,, as simple as that ,
There are tons of books on cycle analysis which comes under advanced TA concepts which one needs to read and understand , most of them are not for day traders but if you go to Technical Analysis of stocks and commodities site you will be able to find many approaches in cycle analysis ,,,,
In a nut shell ,,, when the stock is stronger than its sector and there is a divergence between the nodes of market cycle against the stock's then you have a signal.. Both BRCM and AMZN were an awesome example of such approach ,,,,
Being a technical traders is far more than looking at a chart that another million traders are starring at. Have you ever thought every trader is watching the same break out point and if they all take the similar trade direction they flood the market and the stock trends against them . This is a simple Volume analysis that we have too many expert on this BB,, My message in here is this,,,, having an edge means vast technical knowledge and that comes with cycle analysis... By the way ,, The foundation of all Technical analysis is this MARKET IS NOT RANDOM AND GOES THROUGH PREDICTABLE CYCLE... It is our job to measure and identify the cycle and ride it...( There are lots of wisdom in the above few statement ) ..
Grey1
TIMsk
Remember when i said we must always use top down approach and you said Mr chart looks at the Index future ,,,, I left the argument at that point because I did not want to cause more trouble ,,, but what is the point of just looking at an index without having a technical approach to market cycle,,, what difference does it make if I keep starring all day at any leading indicators ? ,, Not much ,,,,, what matters is this,,, market goes through a cycle which some times gets distorted by marco/Micro economical and instrumental news but once the climax has settled the market path is predicable and measurable and it is our task to learn and tame and trade in the direction of the market.
Boring boring boring I know but this is it guys ,, TA is all about cycle,,,,
grey1
