My first calculated bet

[Linux_cat]

Ok, so i have spent the weekend reading, looking at some TA (technical analysis not tits and ass!), and have put in my first really calculated non gambling position....

Bancon Santander....

Im betting on a reversal:

reasons
1. Confirmed down trend since Early April
2. 2 recent days rally, breaking a previous level of resistance at 723ish
3. ADX is showing signs the trend is comming to an end and the DI+ and DI- are converging
4. Momentum looks like its changing....
5. RSI doesnt show that its over bough as of yet

So what you guys think, I know its all opinion but any critism and predictions are more than welcome...

im entering at a buy point of 727 with a target of 916, getting out if i goes the other way at 660

 

[Linux_cat]

my graph is anyone is interested!

 

[Shanghai]

Can't really see that one myself. As you say, the weekly trend is down. However the recent rally has only taken the price back to the moving average and this is where a trend trader would look to go short. Today's bar had a narrow range which is a sign that the rally may be over for now. If there was a trend change going to happen I would look for some divergences (MACDH for example) but currently there are none. However anything can happen in the markets.......

One other point is that the volume is quite low so I would put a limit on your order otherwise you could be filled a long way from where you expect.

 

[Linux_cat]

Cheers Shanghai, your probably right...Ill give it one more day if its still nowhere ill exit the bet and go back to the drawing bored...

Ill also look at MACDH first time I've heard of it.

Thanks allot for the advice, really appreciated.

 

[Linux_cat]

Wow, so i let the bet run, and the price has rallied to 743, making me 16 points!....

Ive attached the other graph this time with the MACD, I know the MACD is below 0 but i can see a convergance (I think), do you think this could be a proper reversal, or is there any indication i should look for that its about to run out of steam?

Again, word of wisdom are greatly appreciated and absorbed!

 

[Linux_cat]

new chart

 

[Shanghai]

I would be surprised if you get much upward movement from here. It you do it probably won't go directly upwards but pull back to around 700 and then go up, but it doesn't look a strong bet to me.

Generally its much safer to trade with the trend until you see a very strong signal that it is going to end but I can't see that here, even now.

 

[Linux_cat]

I would be surprised if you get much upward movement from here. It you do it probably won't go directly upwards but pull back to around 700 and then go up, but it doesn't look a strong bet to me.

Generally its much safer to trade with the trend until you see a very strong signal that it is going to end but I can't see that here, even now.

Again your probably right, and indeed it looks like its running out of steam o the Intraday chart, Ill exit it today if things dont improve and look elsewhere...

Thanks again for your input.

 

[Shanghai]

Hope you hung on. Its showing much more strength than I expected (although to be fair the overall market has been strong over the past few days).

 

[Linux_cat]

LOL...i exited it this morning damn!!....i got about 18 points profit I think so not too bad!.....

maybe i should re-enter!...you think this is a reversal now? or just a really long pullback?

I guess this is all part of the trading game!

 

[Shanghai]

maybe i should re-enter!...you think this is a reversal now? or just a really long pullback?

No idea! However one of the ways to tell would be to look at the volume. A move usually cannot be sustained unless the volume is there and the volume over the past few days has been very low. My guess, and its only a guess, is that the price has been pulled up by the overall market, so look to see what the FTSE is doing to get an idea of what happens next.

 

[rathcoole_exile]

my graph is anyone is interested!

i don't know what period the yellow MA is, but I'd be more inclined to Short from there than risk going Long ........