M and W Patterns

You hear me talk about the W and M pattern almost everyday...this is not the best illustration but will do for now. Note: When the number 4 point is higher than the number 2 point it's a lower risk pattern. Some call these patterns 1, 2, 3 Bottoms. If it looks like a W and acts like a W it must be a W...look for the opportunity to use a trailing stop.

Check out the chart: http://www.simple-as-123.net/charts/April28-05WPattern.gif

Marsh

Thought for the day...

Don't forget it's much harder if you don't know what you're doing...

Comments on Wednesday 4-27-05

Hi Students, and Guest's...

I have just a few comments about trading on the 10:30 bar...I let that bar close off, then I look to see if it's a reverse or a continuation. This is also the time when we would look for the 30-Minute Breakout. Pretty hard to catch a long candle because of the previous 4 candles and as I mentioned in the room a 4 or 5 candle will more than likely turn red and even retrace the long candle. After a retrace I look for a pullback to see if I can enter with a confluence. At 11 o'clock we were watching a tight W pattern form, and if you took the trade at the #3 point or used a point or point and 1/4 above and let the market come to you, would have been a safe trade; also the Gap Strategy would also let you take that trade. I did not see the opportunity to trail that trade...so taking 1-1/4 point for a target to exit and looking for a fish hook, or red candles to stay in the game as long as possible.

Next opportunity was that -- I wanna be a Contrarian in the afternoon...and you see a triple top during the time when the ES likes to move toward the low of the day, it had potential, and you would try to plan in anticipation to get short. Second candle below the MA looked good but would have ended up stopping you out.

Next anticipation to be a seller was at the 3:00 reverse, it turned out to be tough also...we had a blip, but the next candle when you would look to pull the trigger turned white, if you took the trade it worked, but would have been frustrating sitting on that trade for 15-minutes.

I don't recommend trading in the last hour...3:30 is my cut off, with few exceptions. Overall was a tough bullish bias kinda Wednesday and at no time did we ever have a confluence. Note -- when we have the TICK at or above 1000 you will probably see the market turn, so be cautious taking a trade unless you have a good eye on resistance or red candles on the D or N. The TRIN really should be in your favor or at least moving in your direction.

Check out the chart: http://www.simple-as-123.net/charts/April27-05WedBull.gif

Any thoughts?

Marsh

Quote for the day...

Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish.

-- John Quincy Adams

Blips

Blips are a reversal type pattern that work well when they show up at a reversal time zone. Try to find a confluence when taking the trade...Note - if you see this pattern and you are just above/below the MA it may give you the opportunity to pull the trigger and not be on the right side of the MA...just look for MOM.

Check out the chart:
http://www.simple-as-123.net/charts/AprilBlips.gif

Marsh

Quote for the day...

"The battle that never ends is the battle of belief against unbelief."
- Thomas Carlyle

Comments from Monday, 4-25-05

Hi Students, and Guest's...

Moved too far, too fast...end up with the sideways channel for most of the day.

The Breakout (breakdown for Elliott) just before 3 o'clock looked like it would be a winner, and was, if you took the risk...but this is what I saw and it kept me from taking that trade...It was just 5-Minutes till 3 o'clock. making it very risky after being so bullish most of the day...I wanted to be a Contrarian and did not think it would move much further down, and did not have stochastics where I wanted it. The better trade was the 3:25 -- 3:30 reverse off of the blip.

If you make a mistake, find out why...

Don't dwell on your mistakes or setbacks, learn and grow from them, and then move on. Never let your mistakes defeat or discourage you. Be prepared to take risks.

Check out the chart: http://www.simple-as-123.net/charts/April25-05BullishMon.gif

Any thoughts?

Marsh

Thought for the day...

Always define your risk, and then you don't have to worry about it.