Ares

Thanks for your comment TFJ,

I agree with what you said.

I don't expect the market to always hit the levels I wrote down.
I just would like to increase the probabilities by looking for fibonacci confluences, RTL/LTL, etc. and combining them with indicators like MACD divergence and oversold stochastics.

I then look at the volume where I think panic selling has occured.
Even with all these, I still cannot tell for sure if I've caught the bottom.

To protect from further loss, I plan to have a mental stop in place.

Is capital the casino's edge?

Thanks again.

Looking forward to more educational comments from you.

Ares

Quote from twofacedjoker:

Expecting a market to always follow the Fib levels is expecting the market to turn at every stochastic cycle. The market is irrational(popular belief but not mine), the same setups can go both ways and the only way you can beat the market is to take as little of a loss as possible. Do you know what the the casinos have as an edge?
More...
 
Whoever took a long position in HOKU (a stock that is below $10) at the highlighted level (1.618 fibonacci level in the fibonacci table that I attached) must have taken some nice profits already.

http://elitetrader.com/vb/showthread.php?s=&threadid=96481&perpage=6&pagenumber=11

If the entry was 8.31 (LOD is currently at 8.30).
stop is at 8.11
reward of 8.81 would have been easily reached already.
current high is 10.05
Will it get pushed to 10.34 (3.618)?

Fear, Hope, and greed:D
 
Speculation on HOKU.

Momentum Traders

Most likely would jump in when HOKU makes a daily higher high (above 10.05) with a higher high volume (about 2,242,000).

Swing traders

May have taken a position already with yesterday's first day up with a stop just below the previous day's low.

Day traders -

MACD traders
May be waiting for a 5 minute MACD divergence with price trading above the 8ma.

Stochastic traders
May be waiting for an oversold stochastics with a bottom pattern (double/triple bottom, inverse head and shoulders,etc.)


Momentum vs. Bottom fishing.

Momentum
I used to really like momentum trading because it's nice to see the stock fly in a short period of time.

On the other hand, if it stalls (and I don't get out right away), the stock may go fast too (tanks - most of the time stock seems to go faster going down than going up).

Bottom fishing

I was hesistant to use this strategy before because I heard many negative things about it like "stock that goes lower goes even lower until something stops it"

I guess I just have to find out that "something" (RTL,Fibonacci,etc.)

Reasoning:

Both momentum trading and bottom fishing has a support and resistance that should be respected with a stop loss.

Momentum trades are bought near the high (more expensive) compared to bottom fishing which is bought near the low (cheaper).


Benefit of the bottom fishing strategy that I could see right now:

IF, the bottom is caught, it would be nice to ride the stock when other traders add up to their positions (at retracements) and drive the stock higher).

Even better, when momentum traders jump in and trigger the "sweet spot".

I plan to put more research on bottom fishing.

Any help to further this study is appreciated.
 
Thanks again nkhoi for providing me the bottom fisher link.

I would like to look more into this.
http://www.tonyoz.com/bottom.htm

praetorian2
http://www.elitetrader.com/vb/showthread.php?s=&threadid=2630&perpage=6&pagenumber=4

Wolfe Wave
http://www.elitetrader.com/vb/showthread.php?s=&threadid=83332&highlight=macd+higher+high

Bollinger bands
http://www.elitetrader.com/vb/showthread.php?s=&threadid=85719&highlight=MACD

Pekelo
http://www.elitetrader.com/vb/showthread.php?
s=&threadid=75045&highlight=MACD

Anekdoten
http://www.elitetrader.com/vb/showthread.php?
s=&threadid=98174&highlight=MACD

Trend and MACD with link to a MACD video
http://www.elitetrader.com/vb/showthread.php?s=&threadid=97433&highlight=MACD

Dip buyers vindicated
http://www.elitetrader.com/vb/showthread.php?s=&threadid=96537&highlight=MACD

MACD
http://www.elitetrader.com/vb/showthread.php?s=&threadid=44993&highlight=MACD

MACD 0 line crosses daily charts
http://www.elitetrader.com/vb/showthread.php?s=&threadid=95384&highlight=MACD
 
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