AI
Tuesday, April 30, 2013 9:50:10 PM
Picking Entry/Exit is more "art" than "science?"
To be totally frank, I can not put in writing exact specific
conditions that have to be met for me to enter/exit.
Its a combination of chart pattern, technical indicators,
market sentiment for the day, trading range, etc.
However, here is one of the conditions that I can specifically show
you on the chart.
[Point 1]
This is 5 minute charts for SPY and UVXY.
Notice the spots marked "SPY 1" and "UVXY 1" where
"SPY 1" is hitting higher lows, and "UVXY 1" is hitting lower highs
which is suggesting that SPY may be headed up and UVXY may be
headed down. To me, these two signals matched in this case and I
consider a trade.
[Point 2]
Now look at "SPY 2" and "UVXY 2".
"SPY 2" is making lower lows which hints it could drop,
but "UVXY 2" is also making lower highs which hints UVXY could drop.
Two signals are conflicting, and I do NOT consider a trade.
sting & DocCon are going to scrutinize me for trying to find
matching correlation in these two...LOL...but I do it out of habit
and has worked so far in short term trades.
I also watch these two stocks in 1 minute charts as well, which
gives more in-depth view but it can be bit too busy, so I
complement it with 5 minute charts.
This is just one of many many conditions/signals that I look for
to trade, and what ultimately triggers the final trade decision
often varies based on what's happening at the moment, so its very
difficult says here is an absolutely successful trading formula.
To be totally frank, I can not put in writing exact specific
conditions that have to be met for me to enter/exit.
Its a combination of chart pattern, technical indicators,
market sentiment for the day, trading range, etc.
However, here is one of the conditions that I can specifically show
you on the chart.
[Point 1]
This is 5 minute charts for SPY and UVXY.
Notice the spots marked "SPY 1" and "UVXY 1" where
"SPY 1" is hitting higher lows, and "UVXY 1" is hitting lower highs
which is suggesting that SPY may be headed up and UVXY may be
headed down. To me, these two signals matched in this case and I
consider a trade.
[Point 2]
Now look at "SPY 2" and "UVXY 2".
"SPY 2" is making lower lows which hints it could drop,
but "UVXY 2" is also making lower highs which hints UVXY could drop.
Two signals are conflicting, and I do NOT consider a trade.
sting & DocCon are going to scrutinize me for trying to find
matching correlation in these two...LOL...but I do it out of habit
and has worked so far in short term trades.
I also watch these two stocks in 1 minute charts as well, which
gives more in-depth view but it can be bit too busy, so I
complement it with 5 minute charts.
This is just one of many many conditions/signals that I look for
to trade, and what ultimately triggers the final trade decision
often varies based on what's happening at the moment, so its very
difficult says here is an absolutely successful trading formula.
