Tuesday, August 20, 2002 12:27:56 AM
LG on TRADING TACTICS in a BEAR RALLY-type SITUATION
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The market is defiantly not cooperating...gg
The market became way over sold and now in spite of the over bought condition continues up. IMO, there are several ways to play bearish patterns that may be in the process of being negated or just breached.
One: You expected the patterns to be negated and were long at the breach.
Two: You were expecting the resistance lines to hold and were short, but now you’re unsure. As soon as your stop loss was reached you should have covered and went to the sidelines until you reassess and became sure enough to reestablish a position long or short.
Three: You were short and decided you were wrong once your stop loss was tagged or before. . If that occurred you should have closed your short and went long.
Four: You were short and believe this move above the bearish consolidation patterns is nothing more than a breach. If so, you should hold your short until your stop is tagged. If it is tagged cover and then reassess. If you continue to believe the patterns are only being breached look for a short re-entry point complete with stop loss.
Five: You were short and you believe the bearish patterns are only being breached, but you do not want to give up your short borrows as some are hard to get, so box your position with a long. (I recommend having more than one account for this.)
I could go on with strategies, but the important thing to remember is to protect your capital so you can live to trade another day. I am sure you’ve read this more than once, try to keep losses small while riding the winners. This is much harder to do in practice, but it is what everyone should strive for, because it works.
Regards,
LG
http://www.investorshub.com/boards/read_msg.asp?message_id=467039
----------------------------------------------
(:
My Threads --
Trading Stuff #board-1220
Index Charts #board-1246
PPT Archive #board-1280
Gold #board-1240
NASI-COMP Study #board-1263
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The market is defiantly not cooperating...gg
The market became way over sold and now in spite of the over bought condition continues up. IMO, there are several ways to play bearish patterns that may be in the process of being negated or just breached.
One: You expected the patterns to be negated and were long at the breach.
Two: You were expecting the resistance lines to hold and were short, but now you’re unsure. As soon as your stop loss was reached you should have covered and went to the sidelines until you reassess and became sure enough to reestablish a position long or short.
Three: You were short and decided you were wrong once your stop loss was tagged or before. . If that occurred you should have closed your short and went long.
Four: You were short and believe this move above the bearish consolidation patterns is nothing more than a breach. If so, you should hold your short until your stop is tagged. If it is tagged cover and then reassess. If you continue to believe the patterns are only being breached look for a short re-entry point complete with stop loss.
Five: You were short and you believe the bearish patterns are only being breached, but you do not want to give up your short borrows as some are hard to get, so box your position with a long. (I recommend having more than one account for this.)
I could go on with strategies, but the important thing to remember is to protect your capital so you can live to trade another day. I am sure you’ve read this more than once, try to keep losses small while riding the winners. This is much harder to do in practice, but it is what everyone should strive for, because it works.
Regards,
LG
http://www.investorshub.com/boards/read_msg.asp?message_id=467039
----------------------------------------------
(:
My Threads --
Trading Stuff #board-1220
Index Charts #board-1246
PPT Archive #board-1280
Gold #board-1240
NASI-COMP Study #board-1263
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