A Look at a Stock Trader's Day

[Dinerotrader 10]

I see your point. Let me explain more of what I am thinking so you can help me out.

 

In my mind having a correct trendline would mean you have an advantage in using the trendline to bet on a trend. If a trendline was incorrect, your odds would be the same as betting at any random point on the chart. There probably is a case to be made about using random entries and having an amazing trade management strategy to be profitable (the TheRumpledOne's somewhat simple method is the closest I have seen to randome entry method) but I think you would agree that drawing appropriate trendlines should give you an advantage over random entry selection. If this is the case and appropriate trendlines do give you an advantage, I would seem to me that inappropriate trendlines would not give you an advantage.

 

My guess as to your response to this would be that drawing appropriate trendlines is so easy that you have to be ignorant if you cannot draw horizantal lines at highs and lows. Your charts you posted shows a declining trendline that I haven't seen used very much and can be more of a grey area for how it needs to be drawn. After going through Al Brooks work I hope that I can get a good handle on those.

 

Those are a few of my thoughts.

[Dinerotrader 10]

Did you end up shorting LM? I took a guess where I might have shorted it and annotated the chart a little.

 

[thalestrader 14]

Did you end up shorting LM? I took a guess where I might have shorted it and annotated the chart a little.

 

 

I did not short LM, but I may end up wishing that I had (its down a dime from where I would have shorted it as I type).

 

Your chart looks excellent! That is where I would have shorted it. My initial stop loss would be at about 24.25.

[rcossey73 10]

 

Also, price stalled at Friday's low. A stall is a term used by Mike Reed at tradestalker.com. He has an eBook called Read the Greed where he discusses stalls.

 

 

Hey Thales,

 

I have been thinking about buying Mike's eBook. Just curious if you recommend it? I haven't found much info about it other than his site and came across your post mentioning it and thought I would ask.

 

Thanks

Rick

[thalestrader 14]

I found Mike's book very useful for the stage of development I was in when I was introduced to his work. His use of support and resistance really opened my eyes to using S/R, but he also relies quite heavily on "set-ups," and indicators.