Some observations on April 12th, 2005

Hi Students, and Guest's...

Some observations while in the open Hotcomm, and Paltalk room this afternoon.

I told everyone I did not think the report of the FOMC would cause very much volatility... WRONG! I'm not sure it was the minutes or not...the fact remains you don't want to be in a trade at or near a report of any kind. Wait for the bar to close.

Don't yell at me about the old saying --"Don't be long at 2 o'clock -- but maybe at 2:05."

Two problems while trading at or near the low of the day...it was at support, and trading at the low of day is very high risk...best to let it break the support, and use one of the 3 techniques to take the trade.

When you want to take that high risk trade you better have a confluence. Both MACD's were uphill. I was asked where I thought the market might go...my answer was I did not know, but take a look at the 15-Minute MACD for direction.

The breakout of the trading range was caused by the report or some news...but with the direction from the MACD's and having the second candle above the MA with the risk being back down below the MA...looked like an opportunity to me...and you had mom, and the possibility of a trailing stop, and protecting your entry. Caution as you approach the 3 o'clock reverse.

How about the 30-Minute Breakout at the high of the day...same problem as trading at the low; risky and would have been resistance for the breakout of the trading range...once again if you weren't in the Breakout trade and wanted to take the 30-Minute Breakout of the high, just use the same technique, as at the low of the day.

For PowerTraders -- the Open Gap Strategy trade had mom...or very close to it, it would have worked. 10 o'clock reverse...and you can see why I let that 10 o'clock bar close off, did not reverse but was a continuation of the open trend.

After the first hour there was the 30-Minute Breakout (Breakdown for Elliott) with the second candle below the line and a good opportunity...A lot of mom to push it down...the doldrums was just that the doldrums...and on a Tuesday we get that sideways channel we so often see.

Newbie's...new students, tell me about trading in the Red Zone?????

Tell me about trading in the Red Zone? And the TICK, and the TRIN, and how about those Magic Numbers when your anticipating a trade????

This one will just gnaw at you...because you would have had a breakout line on top and below that narrow channel...looking for that breakout, and taking the trade with the second candle above the MA, and you're going to say I coulda, woulda, shoulda.

Check out the chart at http://www.simple-as-123.net/charts/April12-05TuesFOMC.png

Don't let it frustrate you...it's a good lesson.

Marsh

While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior.

- Henry C. Link