miketranz
961 posts
msg #71530
- Ignore miketranz |
2/19/2009 11:35:09 AM
Mystiq,I would go long on top reversals.Thats the best bet.The trend is stronger if a stock does not sell off that much.You need to find stocks moving upward.Then use the moving average set up as a guide.On a bottom reversal,the stock already sold off way below the three moving averages.Even if you catch a reversal off this set up,you probably won't get much side.Hope that helps....
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SFMc01
358 posts
msg #71534
- Ignore SFMc01 |
2/19/2009 12:29:20 PM
Mike: Re: miketranz 2/14/2009 9:16:10 AM where you wrote:
"When is the best time to enter a bottom or top reversal position,in a strong downtrend or on in a strong uptrend"? Is your definition of a strong downtrend or uptrend in the stock your watching or the general market itself? Define what your calling a top and bottom reversal.As far as when to enter a position,I personally enter only if the trend reasserts itself.I use the moving averages as my guide.I key on the (10) day ma crossover from the bottom.I will also enter a position at certain times if the stock trades +.10 above the previous days high.The most important thing is never try to catch any kind of reversal because the stock sells off and you think the price is right.Let it prove itself by moving in the right direction and hitting one of the two triggers or buy zones that I mentioned.The best advice is to use small position size to get the feel of real money on the line.See what works best for you from your own experience.Keep a record of all your trades.Do more of what works,less of what does not.Hope that helps,Mike...........
Mike: Respectfully ... for clarification purposes for a still learning daytrader ... am I interpreting your statement above correctly to mean:
#1. You watch a stock or group of stocks using StockFetcher to identify rhose where the stock crosses the (10) day MA from the bottom ... and then... using judgement ... you may buy the stock the next day if the stock exceeds the high of the crossover day by $0.10?
#2. Then, if the stock goes back under the (10) day MA, you may exit. (There may also be other exit reasons.)
#3. Have you "automated this buy strategy with TradeStation or other broker? Do you have any thoughts you might want to share about automating this strategy?
#4. Previously you stated that you also use the (20) day MA and the (30) day MA. How do they enter into your decision process, if at all formally?
#5. Do you have other criteria you use in selecting stocks to watch using the above criteria in StockFetcher? Such as stocks above $1 or $5 etc. Volume criteria?
Thank you very much. You have been very generous in sharing your experience and I appreciate it. Steve
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miketranz
961 posts
msg #71566
- Ignore miketranz |
2/20/2009 12:45:57 AM
Steve,my pleasure to help out.The moving average method works best in strong trending stocks.Its basically a swing trade momentum play.Gold for example is strongly trending.Set up a chart in the Gold sector with the three moving averages.You want to enter a position only if the stock breaks a 10 day ma from below.I enter only on close.That's the way I trade.You can enter intraday and take your chances,but I want to know that the stock actually closes above the ma.Another method if you miss the trade is to buy the next day +.10 above the previous days high,only if the stock broke into the buy zone from the previous days close.To me,a momentum stock that breaks the 10 day ma from below,is reasserting itself.This has been a tough market to find the right stocks for this set up.You're lucky to get maybe a 1-3 day upswing.Where you take your profit is up to you.If a stock overextends itself,sell into it.When I stated that I exit when a stock goes back under a 10 day ma,thats worst case senario,maybe a gap down.Most of the time I'm already out of it ,selling into the rush.In my opinion,that's what separates the winners from the losers in this game.Anyone can enter a trade,the key is knowing when to get out with a profit. Automated trading is the way to go.It takes the emotion out,and leaves you with a solid set parameters.You are basically locked in.Fidelity PowerStreetPro has the capabilitys to "bracket a trade",check it out.As far as the 20 and 30 day moving averages,I just use them as a reference.Most strongly trending stocks will trade above the 30 day ma.Trade selection as far as price,through experience,know what price range you make money in.If you trade under $10 and seem to make money,stay with that.Log all your trades to get an education.Find out what works for you and do more of it.Keep yourself out of trouble and stick with liquid stocks that trade over 500,000.Even if they trade over that,watch the bid/ask spread.Stay away from wide spreads.Chets filters are a good start,also any high rsi momentum filter you can find on here will do the trick.Hope that helps,good luck,Mike........
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