Frustrating to Buy Tops & Sell Bottoms
- Thread starter KCalhoun
- Start date
Just do a screen for number of days above 50 SMA. I have posted this frequency chart of this screen before. More than 60% fail to stay above the 50 SMA for more than 20 days. Based on this statistic, I will target buy for those stocks which stay above 50 SMA for more than 20 days. Next I will look at how well the stock trend flow with the 50 SMA before I buy.
This chart does not flow well with the 50 SMA.
This chart flows well with 50 SMA.
Of course, this is not a full proof method as charts may snap the trend at any time.
This chart does not flow well with the 50 SMA.
This chart flows well with 50 SMA.
Of course, this is not a full proof method as charts may snap the trend at any time.
To stop buying highs/selling lows you've got to be a real expert on the price action around those highs/lows. Price character plays a massive role.
There ARE clues and the price action hasn't changed over the years despite what many think or say. The price action around those high/lows is also very fractal, same on the 1m as it is on the day.
My advice is simple, look at 1,000 charts, then another 1,000 then another 1,000. It can take years to understand and find the clues, but they are there if you put in the hard work.
There ARE clues and the price action hasn't changed over the years despite what many think or say. The price action around those high/lows is also very fractal, same on the 1m as it is on the day.
My advice is simple, look at 1,000 charts, then another 1,000 then another 1,000. It can take years to understand and find the clues, but they are there if you put in the hard work.
Isn't what you're you're supposed to do, or am I reading this funny??
You don't mean "Technical Analysis", do you? HERETIC!!
Yes, but it relies far more on the CHARACTER of the price action.
The beautiful thing about understanding the character, and change in character, is computers are a long way from understanding it, whereas the human eye can spot the often subtle changes. The code boys aren't a threat to your game-plan.
Also, start to think about how the market is positioned, is everyone long? If so perhaps a breakout on the upside won't be a good one. But what happens if everyone got previously long, then got stopped out on the downside, then price moves back to that same potential breakout level with a noticeable character change at the top (versus the price action characteristics last time we were testing that same high). That’s the sort of analysis that needs to be worked on - clues are often there in the previous x bars to the actual successful breakout.
Summary: The clues to breakouts or fake breakouts are normally always in the price action but only a trained eye can spot them.
The price action is like a painting by Rembrandt, if you don’t know anything about art (and I don’t), all you’ll see is the painting, very nice you'll say. But listen to a real expert and he’ll take you INSIDE the art and will point out things you will not only have missed but never realised they were there in the first place. Same with understanding a price chart IMHO.
Agree with your consideration of the price chart, but it's even more simple than that, Buckeroo!
KISS, Baby!
KISS, Baby!
You're right it is all KISS but it's actually hard and takes a lot of work to get to a stage where everything is KISS.
Damned straight on that!
