I do trade falling knives as well. In fact it is one of the earliest strategies I discovered in the stock market. But these days i do not buy indiscriminately. I normally wait for two-three days of fall, check out valuation and news triggering the fall, and buy and hold for a day or two. In the long run it makes lots of money. As always you should use money management and do not be overly leveraged.
Falling knives
- Thread starter VictorS
- Start date
Yea, I was in at 90.65, so I'm doin pretty good !
. You gonna buy some?--
Victor, do you use any indicators to help find a bottom?...if you do, I'd imagine some kind of over-bought over-sold indicator like MFI, CCI
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.. Just a thought, but OIH and a few other oil stocks seemed to have hit bottom and are now moving upward. VLO, OXY, DO..are just a few to look at.
cm69
Quote from cashmoney69:
Yea, I was in at 90.65, so I'm doin pretty good !
--
Victor, do you use any indicators to help find a bottom?...if you do, I'd imagine some kind of over-bought over-sold indicator like MFI, CCI
---
.. Just a thought, but OIH and a few other oil stocks seemed to have hit bottom and are now moving upward. VLO, OXY, DO..are just a few to look at.
cm69
yeah time to fish for bargains in the oils
Is buying a stock near a support level that SAME thing as trying to find a bottom?...
I'm looking at stocks like LVS, LEH, SBUX, BSC, WB
cm
I'm looking at stocks like LVS, LEH, SBUX, BSC, WB
cm
I would wait for a bounce from the lowest low and wait for the pullback, which should be shallow, more like a consolidation. The stock went into a short term range. I would trade this BO to the upside. Still risky. Think about it, the short term range(shallow pullback or even horizontal) is accumulation. Somebody is doing the job already.
You should take profits in this kind of trade quickly, because the stock could be a really bad pussy cat (Dead cat bounce).
Cheers
Sundog
P.S. The same applies when trading pullbacks in an uptrending stock. The same principle, but the the major trend on your side.
You should take profits in this kind of trade quickly, because the stock could be a really bad pussy cat (Dead cat bounce).
Cheers
Sundog
P.S. The same applies when trading pullbacks in an uptrending stock. The same principle, but the the major trend on your side.
victor, what kind of falling knive stocks were you trading this week?
cm
cm
Funny playing intraday falling/rising knives is about the only way that i know how to trade. I work at a place where that's pretty much all we do. Most of our trades are off the bat in the morning obviously when there's more volatility, and our day usually ends somewhere around 11. It's sad to say but i really don't know much else about other ways to trade. That's actually how i found this site, bought a few books which i'm reading, hit google a bit, lots of interesting stuff here, just having a hard time coming up with an afternoon strategy ...
ImE there is nothing wrong with catching 'falling knives' as long as a trader doesn't do it just because he THINKS price has fallen too much and has to be bought. It's not about thinking, but about SEEING that this reverse move is about to happen ie anticipation skill based on research and implementation ONLY when there are grounds for doing so. As ViktorS has correctly pointed out catching falling knives offers BY FAR best risk/reward rates than any other method as potentially a trader picks up price at the very extreme levels of oscillation cycles. Now reasoning for doing so vary and many times I have seen my own trades being reflected in other peoples' trades, they see other reasons for picking that falling knife resulting in some weird confluence of methods.
Bottom line is have a valid REASON for 'catching a falling knife' or if you choose not to then odds are good you will be standing in front of a FREIGHT TRAIN, willingly
Best to all!
Bottom line is have a valid REASON for 'catching a falling knife' or if you choose not to then odds are good you will be standing in front of a FREIGHT TRAIN, willingly
Best to all!
Victor, still trading these?