Keeping The Edge
I can take a hint, and
personally speaking I can also use the time
much more productively than ‘banging
my head,’ when the trading is less than ideal. When I start finding that my edge ‘just isn’t what
it used to be’ (at least on this particular day)–I don’t go back to the ol’
drawing board. More likely than not I go to the daily chart to try to gain some
more insight into the next high-probability trade, as I like to use the time to
look for potential high-probability trades.
As technicians, there’s a boatload of indicators
or bells and whistles that one can rely upon. In my own toolbox, I prefer to
use: Fibonacci tools, parallel lines, pattern recognition, EMAs, stochastics,
and the Bollinger Bands. For me, and in the spirit of trying to keep it simple,
that’s more than enough to look at, and try to interpret.
Put it all together, and you might end up with
something resembling the chart below of the semiconductor index, affectionately
known as The Smash
(
SMH |
Quote |
Chart |
News |
PowerRating).
The trend is clearly up, but after doing some
extra work, evidence in the form of technical daily resistance might give some
extra insight as to why ‘longs’ might be having some potential trouble up here
(I know I’ve already felt some of that action in today’s trade — Doh!!). If
nothing else, maybe you have a pretty picture to hang on the fridge, right next
to the pictures that the kids brought back from school.