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Cute Bear Spike...I am turning Short Term bullish now on the Naz...The RSI(14) is about as low as I think it will go...29.4. Plus, Support held and upside vol. was extremely high the last min. on the Naz...IIC
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You're welcome.Originally posted by dmk112
Yes, I say "seems to want low channel", because channels are there to show a 'potential' place for price to wander/drop/steamroll to. It may not get there, but that's where I would target if I were short the stock. Just like the reverse. If I were long a stock, I target an upper channel. It's a logical place to take profit. Nothing more, nothing less. Price may ignore the channel, but it's my line in the sand. And trading is all about drawing lines in the sand. Yes, it is a logical place to enter SIM. Wait for the channel hit (remember the channel will have moved to a different place, so make sure it's a channel hit on the day, right?) Then when you get the hit, then switch to an intraday chart. Look for a logic place of support to enter, such as double bottom formation or inverted SHS, or you might be aggressive if there is a bull flag or a falling wedge formation. Just be patient. An entry will present itself. You've just got to be clever enough to identify it when it happens, have your plan ready to go, and execute.
OK, let me show you a channel turn down. Channel turn ups are just the opposite. You'll find many examples in this thread. Check out charts such as this one http://www.mrmarketishuge.com/forum/...ntid=589&stc=1 that shows the channel turn down (channel starts out from a significant low, starts trending upwards, but then it TURNS down. This is bearish. See the LTXX chart now, it's clearly pointing to lower prices.
I can't give you a reference of anywhere else on the Web that explains this stuff. They are my own thoughts and I've no idea if anyone else has actually discussed any of it before. If anyone finds a link, let me know.Attached FilesComment
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OK, spike I guess I wasn't clear, I meant what exactly IS a channel turndown, I can't tell on your chart why it is a channel turndown. why is the red channell a "turn down"?
thanks againComment
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Because it turns down from a low.Originally posted by dmk112
A channel from a low is supposed to go up, right? So if it turns down, it's telling you that the rising channel is no longer valid. It's a clear sign of weakness. The inverse is true for channel turn ups. Again, the longer the channel, the more significant. Also, the more significant the low, the more significant the meaning if the channel turns down.Comment
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aaahhhh huh... I'm getting it it now (sort of LOL) So is this method basically one of a kind? As in, did you invent it?Comment
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Just trying out my new look. Whatdaya think?"Whatever you can do or dream you can , begin it. Boldness has genius,power and magic in it." GoetheComment
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Ya, one of a kind as far as I'm aware. Obviously plenty of people must trade regression channels, but as far as my system rules explained in this thread, I've not seen it anywhere before. Yup, I'm an inventor!Originally posted by dmk112
I'm always thinking/designing new systems to trade. I've got some very effective ones for emini futures, using indicators such as FIB fans, Parabolic SAR, SMAs, stochastics, MACD. It's a passion of mine
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Spike, how do you set a stop and target for the channel turndown, e.g. GM you pointed out..Comment
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OK, in GM's case, we need to know that the bear flag is valid for us to stay in the trade. How do we know if it's valid? Well, it remains intact; meaning, the flag formation isn't broken. Logical stop in GMs case with this entry is above the descending line. In this case, above the line is around 29.50, which is 3.3% risk from our entry. That's within an acceptable amount, but I prefer tighter stop, as you've probably noticed by reading this thread. I love perfect entries. I go to great pains to get them, and when they're not perfect, I get out. By keeping my risk very small, I maximize profit when I do nail one. I will likely set a stop above today's high, which is only 1.4% risk and much better. If it gets hit, then price has managed to get over the apparent heavy intraday resistance at 28.90, which is impressive enough for bears to get concerned. After all, the daily pattern may well turn into a W bottom, and that would be cause for heavy buying, and I don't want to be short.Originally posted by dmk112
As far as target, I would normally target a lower channel or price support. In GM's case, it has had a very very bearish lower channel breakdown, which I posted somewhere on this forum previously. If you look on a weekly chart, and draw a channel from the top, you will see that breakdown. 28.00 is very critical price support, so if it loses that, it's very very bad for the stock. On a ten-year chart, there is possible trendline support at 26.00 that coincides with another price support area, but since the weekly formation is a clear bear flag, (affirmed if there is a breakdown), which justifies letting the short run to more significant price support around 15, which corresponds to the ten-year lower regression channel. I would therefore be completely justified in targeting 15.00.
So you see, it's all about support and resistance. If you BASSAR, you have an edge. BASSAR is Buy At Support Sell At Resistance.Attached FilesComment
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