Umm, a journal
- Thread starter illiquid
- Start date
That MS Paint just gets addicting you know 
Yeah I know, it's real easy in retrospect to pull out the chalk and point to this low and that high on the chart -- altogether different when you're skating the hard right edge. Example here -- why did I cover when I did? Dunno, had to have been there I guess
Yeah I know, it's real easy in retrospect to pull out the chalk and point to this low and that high on the chart -- altogether different when you're skating the hard right edge. Example here -- why did I cover when I did? Dunno, had to have been there I guess
I'm trying to do some pairs trading (buying strength, selling weakness) based on chart divergences, but it's damn hard for someone not used to it to try and hold positions you know are likely to go against you.
These are a couple charts of a software sector pairs trade, short ADBE/long INTU.
These are a couple charts of a software sector pairs trade, short ADBE/long INTU.
Just what goes through my head for a given trade . . .
Lots of times daily charts will give me ideas for intraday trades, and the ones I manage to get lucky on entry points are trades I like to keep overnight. SYMC was a missed trade on the daily chart, having gapped down on another company's warning, but stayed on my screen for the next day, and then that scratched short friday. Perhaps the idea that I was just getting "leftovers" made me more trigger-happy than I should have been.
I think I get as many "top-down" ideas as "bottom-up" when it comes to time frame, but it's pretty hard sometimes to deal with entry/exit/stop points across multiple periods.
Lots of times daily charts will give me ideas for intraday trades, and the ones I manage to get lucky on entry points are trades I like to keep overnight. SYMC was a missed trade on the daily chart, having gapped down on another company's warning, but stayed on my screen for the next day, and then that scratched short friday. Perhaps the idea that I was just getting "leftovers" made me more trigger-happy than I should have been.
I think I get as many "top-down" ideas as "bottom-up" when it comes to time frame, but it's pretty hard sometimes to deal with entry/exit/stop points across multiple periods.
Divergence trades work best at the end of trends and up to the point of an actual market turn; conversely, they give the weakest signals (in terms of risk/reward) at the start of a new trend. You really don't want to be looking for weak charts to short while the market is potentially beginning a fresh leg up. I think we have a good a chance as any in a long time for the bulls to start to take the helm on Monday, but lately I've been trying not to lean one way or the other until the market actually trades a bit.
KLAC is a fav of mine to watch on any given day, and how it trades tomorrow is pretty pivotal IMO.
KLAC is a fav of mine to watch on any given day, and how it trades tomorrow is pretty pivotal IMO.