SuperEgo

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Originally posted by Don Dumb
By paying Farley to learn about a few standard indicators you will learn MUCH more than 10 minutes playing around with them on a chart program, I promise with all my heart. I do, I do.
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no doubt, but hey, it's all good if SE wants to challenge/antagonize the "gurus" - any guru who takes SE's comments as being threatening obviously isn't much of a guru.

the best direction of this thread (besides SE noting his strategies and WHY he likes them) would be to compare his strategies with guru strategies and for him to tell us why his methods are better, and why...and our job is to antagonize his methods and scrutinize them. i don't think he'll start crying if we start criticizing him. he might swear a bit, but most of us do that anyway...

i think there are some people (where some = very few) in the trading books business who can teach you a few things - schwager, weinstein, o'neill are three such authors. if you notice, there are hardly any threads attacking these guys - most of the "gurus" who get attacked are the likes of v...z, n....r, and the other authors who seem fairly immodest (read conceited) about their work and their promises usually amount to absolutely nothing...

just my .02...
 
<center><b>5min Chart of The Nas Comp (or ND100)</b></center>

By now you should be familiar with the 5min chart of the comp and how the moving averages relate to trading.

We will continue with the daily analysis of the comp in the following days.

BREAKS:

Breaks relate to when the comp breaks the moving averages INTRADAY to the upside or downside. How do you know which break is going to be the real deal?

So lets study the anatomy of a break. See the chart attached for an explanation.
 

Attachments

super_ego,

What is the significance of the bottom listed as number 3 on your chart? Is it just that fact that it held at the low before the actual break of the 20sma? If so are you then looking for it to hold the low right before the actual break of the 20sma?
 
Intraday Trends

Breaks:

A break is a dynamic event. It varies on a day to day basis. But the more breaks you see the better you get at identifying them early on. They occur very frequently and the best ones come on days where the market sells off all day.

So the anatomy of a break is as follows:

1. A test of the 20MA
2. A push up in the comp/nd100 (either one) to actually break through the 20MA. Sort of the comp's way of saying, "I'mma Commin' ".
3. Break confirmation comes when a pullback occurs after step 2, but 5MA does not violate previous lows of the rally that gave rise to the break. <b>This is your entry</b>.
4. Finally, you observe as the comp gets back on its 5MA and rides it up.

Exit Strategy:

Sell in incremental lots above a previous high. This way if there is only one previous high that you can identify you sell all your shares. If there is two previous highs you get rid of one half of your position and sell the other half at the next high. If you miss the next high or are not given an opportunity to sell at that high you can still sell and earn a good profit and watch the market for a potential reversal.

See attached chart displaying exit strategy.
 

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Ego, You stated: "QQQ trade well ahead of the market." Will you please tell us your definition of "well ahead"? (minutes, hours, days, weeks, months, years? How many of which?)

In order to follow your system of: "In uptrends, buy all pullbacks into (and below) the moving averages...In downtrends, short all rallies into (and above) these moving averages." Will you clarify a couple of issues regarding trends?

Under your heading: "To set up and identify a trend"

You stated that QQQ "are the immediate trend," (although ahead of the market?) You also stated that the daily chart of whatever investment is traded..."is the immediate trend." So, when they are opposite each other, which one do you suggest we use to determine the trend? Or, because we are using these and many other (indices) charts, do we take the consensus? ie: 4 up, 3 down, we're in an uptrend and vice versa?

By the way, I set up my charts today just the way you specified and was able to identify the opportunities to get in but didn't always find a profitable way out. Of course, I didn't trade "for real"....learning curve ya know.
 
Originally posted by ANCHOR
super_ego,

What is the significance of the bottom listed as number 3 on your chart? Is it just that fact that it held at the low before the actual break of the 20sma? If so are you then looking for it to hold the low right before the actual break of the 20sma?
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Bottom 3 is last bottom before the break (the bottom that gave rise to the break). That bottom should not be violated and it rarely is (a violation would be the 5MA crossing below bottom 3)

You are going to notice the break (of the 20MA) after it happens. Then you are going to look back and see that there was a test of the 20MA in the previous rally. Then you are going to buy the next pullback, randomly, and watch the comp move up above the 5MA.

High probability stuff.

SE
 
Originally posted by super_ego


Bottom 3 is last bottom before the break (the bottom that gave rise to the break). That bottom should not be violated and it rarely is (a violation would be the 5MA crossing below bottom 3)

You are going to notice the break (of the 20MA) after it happens. Then you are going to look back and see that there was a test of the 20MA in the previous rally. Then you are going to buy the next pullback, randomly, and watch the comp move up above the 5MA.

High probability stuff.

SE
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I see. Nice, very nice.

Thanks:D
 
Originally posted by super_ego
Intraday Trends


See attached chart displaying exit strategy.
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For another example...this chart looks like a "downtrend" to me...calling for a "short" entry on that rally just past the break. Where did I go wrong?
 
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