One If by Land, Two If by Sea
К оглавлению1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1617 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
119 120 121 122 123 124 125 126 127
The market is trending, the market is trending! You know from Chapter
3 that you must quantify the trend direction, duration, and
strength of the markets before you consider a trade. All things being
equal, you want the most dynamic trend possible when you place a
trade. Some day traders will say, "Every day is a trading day. I will
just follow the trend of the moment. If it moves, I will trade it." That
trader will not be around three months from now because every day
is not a high-probability trading day. When the market is strong and
the stock you selected from your screening methodology is trending,
it is time to trade. Market analysis and momentum screening is
the way a general surveys the prospective battlefield and selects
where and when to fight. Superior generals would not endanger
their troops without gathering as much information as possible
about the field of battle.
After you have ascertained the trend of the market and
checked the sector performance, you analyze the trend of the
stocks from your screens. Do not forget to consider the reward-torisk
ratio: You need a 2.5 or better ratio for the stock to be acceptable.
If the trend score and the high-probability score are favorable,
then identifying a momentum acceleration breakout is highly likely.
If the stock has a 2.5 reward-to-risk-ratio based on daily price bars,
you have a stock that has the potential to reward you on an intraday
basis with points instead of fractions. Now let us look at various tactics
and battle plans using electronic trading technology. Superior
generals learn to fight the battles of the future from tactics and methodologies learned from the past. If you can learn from the mistakes
of others and not repeat them, you have learned one of the
most valuable lessons in life and in trading.
The market is trending, the market is trending! You know from Chapter
3 that you must quantify the trend direction, duration, and
strength of the markets before you consider a trade. All things being
equal, you want the most dynamic trend possible when you place a
trade. Some day traders will say, "Every day is a trading day. I will
just follow the trend of the moment. If it moves, I will trade it." That
trader will not be around three months from now because every day
is not a high-probability trading day. When the market is strong and
the stock you selected from your screening methodology is trending,
it is time to trade. Market analysis and momentum screening is
the way a general surveys the prospective battlefield and selects
where and when to fight. Superior generals would not endanger
their troops without gathering as much information as possible
about the field of battle.
After you have ascertained the trend of the market and
checked the sector performance, you analyze the trend of the
stocks from your screens. Do not forget to consider the reward-torisk
ratio: You need a 2.5 or better ratio for the stock to be acceptable.
If the trend score and the high-probability score are favorable,
then identifying a momentum acceleration breakout is highly likely.
If the stock has a 2.5 reward-to-risk-ratio based on daily price bars,
you have a stock that has the potential to reward you on an intraday
basis with points instead of fractions. Now let us look at various tactics
and battle plans using electronic trading technology. Superior
generals learn to fight the battles of the future from tactics and methodologies learned from the past. If you can learn from the mistakes
of others and not repeat them, you have learned one of the
most valuable lessons in life and in trading.