IN THIS SPORT IT IS OK SOMETIMES TO BE A HOG
In most sports being a ball hog is no good. We see in the NBA that the two biggest ball hogs in the league Kobe Bryant and Westbrook both got eliminated. However, trading is not a team sport, so you need to be a Hog sometimes. I spent all last night sleeping an hour at a time to finally catch 60 ticks on a tick chart trade in the Euro, and now I am exhausted. At least I caught the trade, sometimes with the currencies you miss them trying to do that. They sit still for hours then all of the sudden move and the volume increase does not seem to come at regular times. However, if you are going to use a mechanical method you can't miss trades or you jeopardize the overall performance of your system. There is some judgement in what I am doing, but a very minor amount, it is mostly in the profit taking points not the entries.
The above chart shows my Hog trade I called out in advance, then mentioned after it was entered. Above you can see where my orders are resting for today. I have a target price and a stop price OCO fashion. I also will exit a strong close if we get it that does not get up as far as the target. It would represent 3 good days up in a strong downtrend, so I will likely do that if it occurs but it will be a game time decision.
This is why I like the trap patterns. When they do catch people on the wrong side they move really quickly. They do not all work out this way, not even close. However, if you study the concept I think you will find ways of using it that are worth your while. There is no magic pattern, it is just the concept of a new high or low above or below some obvious points, that immediately reverses in the opposite direction. Larry Connors wrote about it in Street Smarts calling it Turtle Soup. This was an idea to take advantage of the Turtles, who were the Richard Dennis trained traders who bought breakouts at 20 day highs. Larry Williams also wrote about a somewhat similar concept long before that book. As with anything else, there is no exact magic pattern. It is a concept of finding spots where breakouts fail and reverse quickly. There you have your homework assignment.
As the debate about our economy heats up I decided to revisit and old friend, the chart of GM. I was listening to Bob Beckel talk about how great the auto industry is doing and why it was a mandatory move for us to save them. Let me ask you this, does this stock chart look like it represents a company that is doing well? Does it look like a company that can repay us the $40 Billion dollars we have in them? It is my contention this will go right back down to zero once again and be a total loss. Strong unions extorting money from management in deference to a sound business model, is not a formula that works. This is a broken model and will never work. It is pinheads like this that are running our country!
How in the world could someone site this as an example of what a great accomplishment bailouts are? I love the Greek walkouts on their jobs, they are lucky I am not running things. I would go on National TV and tell them to stay home for the next 100 years, goodbye! All of this can only end one way, and rational people all know it. The question is, are we seeing the beginning of that ending right now?
You can see how oversold we are right here in the Q's and I bought some this morning on weakness just trying to catch a bounce. I think if we do get the bounce, we are setting up the big trade of the year which is a short with both hands. The emperor is walking down the runway now for all to see, and we all know he has had no clothes for awhile now. The PPT has been walking along side him holding a blanket up to conceal it. It does seem now that even the mighty Fed will not be able to stop what they really have created by trying to stop it. We are still in an uptrend on the weekly charts, and are in support zones there, so the game is not over yet. However, if we bounce then get a big break it will be. As in the past if they can hold these levels right about here everything is still fine. The question is will they hold? I am not sure but I suspect in the end these levels are not going to hold.