The thoughts and techniques of trading, as learned through a student. Currently only trading currencies:
Welcome! This is my 2012-2013 daily journal/blog to see if, and to what extent, trading can really be done for the average Joe; Without the fancy automated trading systems, spending thousands of dollars on books and seminars, and quad monitor business. Everything I have learned is through the internet and free e-books.
Trending, more trending. Suspecting a move down again, although a break out here would be nice news for the long term. Something of potential interest is how in the course of the past month or so, the number of red days dominates the green days, yet trend continues to move up.
Looks to me like markets are rebounding a bit. What I noticed was that the indexes, for the past few days, has been a little down, a little down, a little down, etc, and today, boom. Big up push. Seems like a strong rally; a 60 minute chart shows that most of the dow’s gain for today was in the first hour, and it just slowly moved up from there. If the markets continue up next week, it’ll be fitting into a small uptrend, so I’m going to stick with that.
Today was a bit interesting, exceptional from the rest of the week. The dow moved up 2%, and now on the short term chart is at a bit of a resistance. Monday, Tuesday, and Thursday created somewhat of a “3 shadow bottom” (doesn’t actually exist technically) and then today price busted right through the weeks high and reversed the last big red candle. It’s quite a strong rebound, I’m more leaning on an up/sideways week next week rather than down.
Slightly strange. Markets made a little top and dipped back down this week. The rebound off the of the 23 was super nice, right on the dot, the the reversal into a new down trend this week is just seemingly random. It’s very possible that it comes up to a new rebound based on another fib line, but that would be so annoying. Not even grunt work, but I feel like there would be so many different possible fib and retracement lines that could be drawn that it would just be inefficient. I also really need to rethink my strategy, it’s really just not working.
This week was kinda cool, mostly because of today.
Dow: It was a fairly big down day today. Even though it was only 2%, 2% is pretty big on an index. Something I noticed:
The volume today wasn’t so special. Remember that big up moves generally need big volume to support it, while some down moves and collapse on it’s own. Taking a look at the big green bar on the left (6th candle or so) that was a good day for the market, but it didn’t have volume. Interestingly that was about where the market topped out before we stated to come down. It’s down to another fib level now, I think it it breaks down here I can expect it to move down close to the 0.
Another thing I noticed was when there’s a good series of really short bars, it seems to have a decent chance of a couple of big bars and a direction move. Could just be imagining it, but worth thinking about.
With a slight exception of the Nasdaq, the market indexes just didn’t move much. Most days closed with dojis and overall, long tails everywhere. Overall, most of the stocks in the market just didn’t move. I’m still not sure how I’m suppose to be finding stocks that are ready to break out. There are certainly stocks that do it everyday; I’m playing in other game for fun. It opened up on Thursday and I managed to trade my way down 4.46% from 100k. Then I took a slightly gamble on some earnings reports, and today I’m at a net loss of .22%. That’s veryvolatile.
However on a more conservative, more methodical approach, are there suppose to be days where I should be purely out of the market? What about for weeks at a time?
Here was my last trade, the JPM one I mentioned earlier this week. I shorted it because the banking sector has been overall weak, and it broke a fib line so I figured it would reach the next. It touched the fib line, so moved up my stop, and got out at a pretty good price. It was overall a straight forward trade.
As is shown in the price movement for the rest of the week, I wanted to get back into the trade, but I just couldn’t. There was such a slim margin for profit, and it seemed like that was the case for most of the big stocks this week. Will need to go back to the research.
Another down week. It’s pretty crazy how red the charts are. Markets really do fall faster than they rise.
Dow: Low of the day on Friday was slightly above the 38 line. This index is oversold, so I’m expecting this week to be slightly more positive, or at least not asbearish, but overall, (as in within the next month or so) I have a feeling that price will drop to the next line at the 23.6% before it makes a significant bounce up.
Nasdaq: Confirming markets are good (I think) because they show that at least a decision is made. Whether up or down, they’re both better than not knowing. Nasdaq is also oversold, so same logic applies. Same with the S&P.
Dow: Seeing some retracements this week. All the indexes slowed down by the end of the week, so I’m half expecting the market to go up next week. Not sure though, more analysis is needed. 3 days of little price movement, maybe a signal that the market is indecisive?
Dow: The new low that was made last week was not retested this week, but also closed higher than the high of last week. Could be the start of a new range of consolidation. As I look back now as the trend, the consolidation before wasn’t necessarily not moving, it was more like a slow movement up, which should strictly be called an uptrend.
Nasdaq: I feel like the nasdaq is showing a bit more weakness than the dow, and it did close down today, while both the dow and the s&p closed up (barely). The dow also appears to have much “stronger” candles than the nasdaq.
S&P: The S&P also has bigger candles. Volume seems to have completely disappeared off of this chart, but my internet has been a bit funky lately, so that’s that.
I definitely feel like the nasdaq is the weakest of the 3 indexes for this week, as the S&P also made some uptrend progress, while it looks like the nasdaq is closing right on the low for the past few weeks
The 2 candle patterns are something that I’ve been noticing recently. It’s 1 red candle, and then a green candle that opens where the red candle closes, but the green candle doesn’t close higher then the red candle. But then the price continues to move up. It’s like a bullish continuation pattern that shows up a lot near the bottom of moves, which I guess is what I’d expect from a continuation pattern. The candles don’t really show up in the Nasdaq, but the Nasdaq candles don’t really “stick out” as much as the candles in the Dow and S&P do.
Haven’t seen this many candles opening/closing below the short term trend on the indexes in quite some time, which is shown by these 3 month charts. If there was a time to start thinking about a market pullback, I think it would be soon. I’d say now, but the up days this week have been quite strong. If you look at the last 4 candles for each of the indexes, they’re certainly the largest in terms of size; they have the biggest price moves, but at the same time, net price action for the past 4 days is pretty much null.