Trading The Moves - Ed Downs
Trading The Moves - Ed Downs
Trading The Moves - Ed Downs
+46 %
consolidation
Saucer Pattern.
Scoring Examples
NASDAQ 100 (index) 30 Period Moving Average Price below the average = -1
consolidation
Interpretation
Add up the scores. (+) Long, Cover Short (0) No position (--) Short, Close Long
When taking positions, the score can determine weighting. If you typically trade 10% of your portfolio on one trade, consider going Long with 20% when score is +2, and 30% when the score is +3, Short with 20% of capital when score is 2, 30% when score is 3 ...
Trading the index itself is challenging, because there is less information to go on and you end up putting all your eggs are in one basket.
A: Down.
Conclusion:
We make more $$$ if we can do a good job trading the individual stocks, rather than the index.
Consolidations
2.
3.
4.
Stop Movement
Support/Resistance
America OnLine
Exit
Entry
Signal
Saucer
Fibonacci Retracement
Thomson Multimedia
E G
Volume Climax
Worthington Industries
Consolidation
Ameren Corporation
Target
Consolidation center
Finding Candidates
Applying Technical Analysis Software
A Confirmed Signal
Our objective is to confirm good trades quickly. A simple Moving Average is sufficient to get the job done, though other more sophisticated methods can be applied . The better the entry signal, the more likely you are to find good candidates in a short amount of time.
We can scan charts using any system that generates reasonable signals, and then confirm them with basic chart patterns. Here, a 30 period M.A. was used on DELL.
OmniTrader ** is designed to scan for opportunities using systems related to patterns, such as the Trend Line Break System and the www.omnitrader.com Gap System.
** All Signals in this presentation were generated by OmniTrader.
Result.
Review the charts with signals.
stocks go down.
Our Objective:
Let the rising tide carry our convoy of trades. If one ship sinks, our account still floats!
Hedge Example #1
Different, individual stocks move up and down AT THE SAME TIME. Here, you can see BMET and BRCD moving in opposite directions in the same time period. If we went LONG on BMET and SHORT on BRCD in Feb., we would have made $$$ on both positions.
A Case Study
January 2, 2001
Did not trigger entry level Did not trigger entry level Did not trigger entry level Did not trigger entry level
The more stocks in your portfolio (Long and Short) the more you reduce market risk.
Yes
Yes Yes
** Rates and policies change often. Please consult the individual web sites for full details.