Tweet
Originally posted by billyjoe
I try to keep it simple but underneath there is alot going on when I try to make a determination on taking a position. I'm a TA strategist but always look at the fundamental side of a stock to see what's going on etc..
When I'm watching the screens during the day I have on the 5/10/15 minute charts to catch any intraday movement or breakouts. You can't catch them all but it does happen and those 3 time frames are what I use intraday for a short scalp or daytrade. Sometime the momentum of a scalp or daytrade will remain strong an I'll take the position overnight or for a few days.
When I'm initially checking out a setup or looking for them I like the daily chart. Everyone will have a different opinion on this for their own reasons. I like the daily for the immediate short term view of what a stock has been doing. The daily and weekly almost always show a different picture. As with AOB the daily clearly showed an ascending triangle but the weekly was a completely different picture with more of a cup base and small handle.
The daily usually is what catches my attention in the first place. I then go to the weekly, which I feel trumps or overides the daily, when making a determination. It gives a clearer picture of what has been going on over a longer period of time. Especially with volume and chart patterns.
Entry points are usually driven by what I interpret from the chart and the indicators that I regularly use like RSI, MACD, A/D, volume, CCI. I'm now trying to learn Elliot Wave Theory to add to my arsenal.
It's kind of hard to explain how I develope a strategic plan for taking a position. I look for high and low points and higher highs and lower lows over a period of time. You develope a feel for how and what you like to see in a chart that developes into a plan for entry, exit, and stops. Again these are based on trend lines, Fibonacci lines, my indicators, etc. and when they fall into place I get that warm feeling in my gut an then I know or think I know.
The time frame I will hold a position is usually determined by what the stock does after my entry. I always have a basic idea of how I would like or expect the stock to trend but they have a mind of their own an you have to adjust to their action accordingly. Like anything it really boils down to doing it over a long period of time and learning, hopefully, from your positive and negative experiences.
I spend alot of time going over a large number of stock charts everyday. After awhile certain patterns will start to stick out. I've said this and Spike has said it hundreds of times. The stops and cutting the losses short, plus once you're out, letting it go whether the outcome was positive or negative are two important factors on the TA side of things.
One other thing is that there is nothing wrong with a nice long base. I'm not saying that you should wait for 8 wks. to make a play. You would be limiting yourself in my opinion by doing that, but if it is there, like with AOB on the weekly chart, it makes for a much stronger case for the stock if the base is the right type of base like that cup in AOB. But nothing is written in stone an only trying to make a bigger edge for yourself is the best you can do.
One other thing I advocate, but am not trying to push on anyone, is to take a subscription to something like Briefing.com just to get the insight and educational value from the two guys that write their Swing Trader and Technical Take columns. It will provide you with a great education in chart analysis from another professionals point of view plus open a whole new area of how they use indicators in their analysis. I have my own that I like and I think that it's a good idea. There are hundreds out there but finding the legitimate ones that fit your needs and give the most for the money is the hardest part. I like Briefing.com, John Murphy from Stockcharts, and Morpheus Trading Group.
Comment