Friday, March 03, 2017

2. 1 Basic Strategies
In summarizing the strategies and tactics you need to avoid the big wipe-out and to stand proudly in the 'winners' circle,' the following constitutes the essence of a basic strategy:

1. Participate only in those markets which are trending strongly or which are in the process of developing into a major trending formation. Identify the major ongoing trend of each market and take positions only in the direction of this dominant trend or stand aside (see Figures
2.1 and 2.2).

2. Assuming that you are trading in the direction of the trend, initiate your position either on a significant breakout (such as a gap opening on high volume) from the previous or sideways trend, or on a measured reaction from the ongoing major trend.

(a) In a major downtrend: sell on minor trend rallies into overhead resistance or against a strong down trendline, or on a

Figure 2.1 An Uptrending Market. Commencing December of 1995, SEPTEMBER COPPER broke out on the upside. An uptrending market is typically characterized by a succession of higher highs and higher lows. Traders should not be anxious to sell their long positions and revert to
short because bull markets generally go higher than most traders anticipate. The market, and your technical indicators, will "tell" you when Qthe top has been seen.

45% to 55% rally (or the third to fifth day of the rally) from the recent reaction bottom.

(b) In a major uptrend,: buy on minor trend reactions into support or against a strong up trendline, or On a 45% to 55% reaction (or the third to fifth day of the reaction) from the recent rally high. In this regard, it is imperative to note that, if you misread or choose to ignore the trend of the market, and are buying against an entrenched bear market or selling against an entrenched bull market, you are likely to spill lots of red ink, and feel pretty silly, as well.


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"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore Manchester City FCl Crude Palm Oil


From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
Good advice
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system