back start next
[start] [1] [2] [3] [4] [5] [6] [7] [8] [ 9 ] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95] [96] [97] [98] [99] [100] [101] [102] [103] [104] [105] [106] [107] [108] [109] [110] [111] [112] [113] [114] [115] [116] [117] [118] [119] [120] [121] [122] [123]
9 If this was the fourth attempt at breaking out, I will wait as long as it takes to retrace to one tick above a .618 retracement of the initial range from top to bottom before exiting the trade. In other words, I will move my protective stop to a point that is one tick above a .618 retracement of the initial range from top to bottom. Fourth time breakouts usually are good and signal a sizable move in the direction in which they break out. Situation 2 d;) Gold has broken out of its range, and my order was filled. What if it turns around and moves across the range taking out my protective stop and then stays in the range? I am looking at the possibilities and certainly this is one that might occur. In this event I take my loss, but I must not lose my cool. I must exercise SELF-DISCIPLINE and SELF-CONTROL. Experience has shown me that my trading methods work. I must TAKE ACTION. I CANNOT PROCRASTINATE. If situation 2 does occur, I now have a new upper or lower limit for the range and will call in a new set of orders to my broker. Ill take my loss in stride and if it seems logical, continue to trade within the range, as outlined in Part V of this manual. Situation 3 Gold has broken out of the range, and my order was filled. What if it turns around and it moves across the range taking out my protective stop and then keeps goinc on out of the range on the opposite side of the original breakout? This situation represents a failure. Any time prices breakout on one side of a range and then reverse and breakout on the other side of the range, the odds are overwhelmingly in favor of an advance in the direction of the secondary breakout. As a friend of mine says, "This is the time to sell the storel" The action to take here is to take my loss and immediately reverse my position. The Book says "It is pleasant to see plans develop. That is why fools refuse to give them up even when they are wrong." This is no time to be a fool. My plan has failed, i must be FLEXIBLE and reverse position. I wili quickly calculate new objectives, a new protective stop, and call my broker with my new orders. Situation 4 ( . Gold has broken out of its range, and my order was filled, and it moves in my direction. But what If it never reaches my initial objective?
If Gold never reaches my initial objective, then I may be looking at a false breakout. My concern here would be that Gold is weaker in the direction of the breakout than I had anticipated. When a market has been in a trading range for a length of time represented by, on average, 25 bars on the chart - if it then does not have the momentum on the breakout to reach the objective 1 have computed, but instead begins to correct or congest, I will immediately exit the trade with any profit I can get. In the case of a breakout to the downside as with Gold, I would have been worried if, before reaching my objective, the market did this: \ / \/, (move two bars against me) I would immediately exit the trade. If the market did this: \ \/, (move one bar against me) I would iMmediately tighten up my stop to within a tick or two of the price action. If the market then did this: \ \/\, I would stay with the trade but move my stop to just above the /\. If the market did this: \ \/\/r Im out of there. I dont want to see a bunch of overlapping value areas after a breakout. Situation 5 @ Gold has broken out of its range, and my order was filled, and its moving down. What if It reaches my objective? This is my hoped for situation. If Gold reaches my objective, I liquidate. My order to buy it back would have been resting at that price and Im out on as close a fill of my order as is possible. I dont care if Gold then plunges far beyond where I exit the trade. I have received my piece of the action and Im satisfied. Naturally 1 will look for a retracement and then reenter the trade if possible. How t do that is described just ahead and also in Part II of the manual. Once the breakout is established and my order is filled, 1 will then cancel my initial protective stop in favor of establishing a trailing stop. More of this in Part 11 of this manual.
GOLD-100OZ 5533 5432 5330 5229 512? 5026 4925 4823 4722 4620 4520 Figure 16 But markets dont go straight down indefinitely. There are reactions and consolidations to contend with. I can see the beginning of some sort of reaction on the chart. Planning for just such a reaction wilt automatically take care of my trailing sto; and at the same time possibly enable me to add to my position.
[start] [1] [2] [3] [4] [5] [6] [7] [8] [ 9 ] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26] [27] [28] [29] [30] [31] [32] [33] [34] [35] [36] [37] [38] [39] [40] [41] [42] [43] [44] [45] [46] [47] [48] [49] [50] [51] [52] [53] [54] [55] [56] [57] [58] [59] [60] [61] [62] [63] [64] [65] [66] [67] [68] [69] [70] [71] [72] [73] [74] [75] [76] [77] [78] [79] [80] [81] [82] [83] [84] [85] [86] [87] [88] [89] [90] [91] [92] [93] [94] [95] [96] [97] [98] [99] [100] [101] [102] [103] [104] [105] [106] [107] [108] [109] [110] [111] [112] [113] [114] [115] [116] [117] [118] [119] [120] [121] [122] [123]
|
Menu
