Where'd I go wrong; Any thoughts?

1. When a stock and all major indexes close at the top 10% of their trading range there is an 85% chance the stock will be making a higher high the following day.

2. When a stock and all major indexes close at the bottom 10% of their trading range there is an 85% chance the stock will make a lower low the following day.

3. There is no consistency with gaps! This means that there is not an 85% chance a stock will gap in the same direction it closed.

4. The higher high or lower low can be by one cent! Consequently, a stock can trade in the other direction first before at some point making the higher high or lower low.

5. This study was done in over 80 markets (including future markets) and was true for data analyzed through 1997, I believe. I never ran the numbers for it myself, but I relied on my sources for it. I don't think these numbers have changed over the last four years, but I could be mistaken.

6. Yes, I use this data, and in fact, it is formulated into my different real-time scans. Power Trader and New Kid look for stocks trading at the top 15%-25% of their trading range. I pay close attention to the setups there, and in a bull market or a bouncing markets these scans will normally provide the BEST overnight holds.

7. Spending time with the family is priceless even if it means going to see a woman's movie such as Serendipity. Very interesting (if you like fairytale) recommended for the romantic couples :)

Trade Smart!
 
Originally posted by SHORTY
I agree with your concept of buy stops. My tendency (probably misguided) is to try to get the additional advantage of getting in before the breakout. I work during the day and seldom get a chance to watch these things in real time. I wish I could and hopefully someday I will when I get the experience most of these contributors have. Until I gain the knowledge, I may have to rely on buy/sell stops to confirm the breakout.

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If you can't be there, I guarantee you'll like stops rather than buying the night before or on the open. All the false assumptions you miss (like today) will more than make up the small profit you lose setting stops at S/R. Think about it, for a stock to go higher it has to pass your stop, but to go lower it doesn't. So right there you have an advantage by moving the odds in your favor. Then stretching your gain into a home run if possible is your next goal, but scalps or small losses are fine too. I have many small gains and losses with probably a net losing average, but 2,3,4 times a month I hit the big moves on my whole portfolio, and that's were I make money.
 
Shorty,

Im also kinda new but I THINK im getting the hold of all this "trading" thingy..

You may want tu use 18 and 40 day Simple MAs as I read somewhere in Tonys Swing high/swing low seminar just to get the feeling if the stock is bullish or bearish (of course taking the market conditions in consideration).

Looks to me like you want to use similar timeframe as I do 1-5 or a couple more days if it works out, ditch it if it doesnt. Well, You may want to try adding Bollinger bands to your toolkit along with stochastics to time your entry.

I dont know what your experience is and where you get your charts, but I use Ensign (no affiliation) and trade mostly of the dailys. I put up MAs, RSI and vol on one template then scroll through all my charts using that template to sort out the ones that "are doing something".

Then I get like 10ish stocks and turn on the second template - candlesticks w. BB's on them, Stoch (8,1,1 setting) and work from there.

BBs are amazing, look for piercings, reversals of the bande, "riding the rails" etc. Also, check if the stoch says anything about the move.

One thing I think holds true as rtharp once said only thing that is true and can predict is PRICE AND VOLUME. Of course, prediction will be somewhat blurried...cos... "The stock will go up, sideways and down." Talk about accuracy :D

But, Im just ramblin here

Good luck Shorty and everyone feel free to correct me
Alex
 
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