Replies to post #38770 on Short Term Trading Member Forum

[PriceTeam]

Cdeeley. PS. Nearly all money lost trading is lost seeking the reversion to the mean. I wrote this weeks ago, and have watched several traders wanting to prove me wrong. So far the market has affirmed the idea. Trading choppy markets is another story and requires a different skill set. A choppy market can chop up the trend trader's account. But there is a way to know in advance you're entering choppy conditions. The configuration of the 10 and 20-dma's--and then the 20 and 50-dma's will often reveal this story. So we have seen lately the 10 and 20-dma's doing a kind of choppy tango. In other markets, we can see the 10, 20, and 50-dma's tangle and tango up and down. It is possible to blackbox this dance as well as the more harmonious configurations we saw late March going into early May.

AAPL makes a great study since March 10. There are several great entry points. Notice the bullish configuration reaffirmed multiple times. So regarding the ideal entry point: There is no *perfect* answer. There could always be a false start. So if you go for an early entry, know what you're doing and know what would signal NO-GO.

My GO-meter would start clicking around March 10-12, April 1, just after the back-test of the 200-dma around April 15, and then May 26. There's a dozen different ways to make the entry, and if you were going to black-box the method, there would be advantages and disadvantages to any particular strategy.

I encourage you to avoid being too particular about capturing every cent because in the market every action generates an equal opposite reaction. So if you try to take every penny, the market will take every penny from you. Why is this? Because to get every penny, you have to fine-tune your signals, and in the fine-tuning, you will actually get kicked out of trades you want to be in. So then if you broaden your signals so as to capture more of the trade, the market will move against you within those broad signals and will take money from you. So the game I'm playing is to find the ideal balance point. I want to find the place that delivers consistency--not the maximum percentage.

Ted