Quote from smilingsynic:
LOL
Just about every trading guru out there tells the sheep to place their stops at swing lows and swing highs minus or plus one tick. It's always that one tick, as if it is some clever secret. So obvious. It's like being on the beach and wanting to go in the ocean. Yeah, put your wallet at the toe of your shoe. Sure, no thief would EVER look in there!
You can just see the stops get picked off, a tick (or sometimes two or three) north of resistance and south of support. You just know there is some hot head trader out there (probably looking somewhat like Jim Cramer) getting p'ed off, banging his keyboard into oblivion, throwing his monitor to the floor, and then cussing about how "they"--the f'ckers--are trying to screw with him. Actually, there are probably hundreds or more just like him. You can see it in the one-minute volume bars. If you use your imagination, you can almost visualize their reaction.
Well, of course "they" are trying to screw with you. "They"--other traders--are trying to screw with everyone else. It's just easy when you put your stops right where we all can see them.
That is why it pays to fade the extreme moves
