Wednesday, February 11, 2009

Market is choppy

The fall yesterday was very powerful. Today, the market has yet to pick a direction; it goes up, it goes down, it pauses, it makes me dizzy.

This is not a good place for position traders, swing traders, or even those who plan to hold for most of the day. My friend IIC at (see link in sidebar) is totally in his element. He is sufficiently nimble to get in and stay in while the getting is good, then be done with it. His success rate in trading the one minute chart is phenominal, 46 wins in 51 trades (and counting). Mine is not.

Ya might want to visit his stock trade chat room. From time-to-time, Doug offers lists of potentially active stocks in the room. Further, his newsletter offers stock pick suggestions based on longer time-frames.

I have placed two trades this morning and they both resulted in losses.

Thats the point
Since I now have made two losses, I am done for the day. I am confident that my next trade will also result in a loss. It has happened many times in the past; I get to the point where I don't like myself and my thinking becomes clouded - bad Market-Tao.

Are you the fast and nimble type? Today is made for you.

I will wait for the market to become unified in a direction and resume normal trading where I am confident that I will prosper.

I conclude that I am able to prosper when trading a ten or 30 minute chart. Bigger chart are too choppy in today's market, quicker charts are too (IMHO).

Here is probably the simplest trading strategy: Buy a stock that is above the 20 day Moving Average and check it daily. When it closes below that line, sell it. As it runs, it will pull the MA line up as a boat rises with the tide. That same strategy works on faster and slower timeframes as well.

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