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Thanks Brownsfan, and good feedback - just follow the market and listen to what it's telling you. AKA confirmation. |
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Whether you planned it or not James, you found a great example here in the DIA/YM potential plays. I just wish now we would have discussed this BEFORE the hammer appeared!
Here's one piece of advice - when there's a large rally or selloff, watch those daily charts like a hawk. We all know that those rallies/selloffs are usually the result of some news and people overreacting. Candlestick analysis can help immensely at giving you some idea when that overreacting may be ending. These hammers we found are perfect examples. Candlestick analysis will never get you long at the bottom or short at the top, but it can get you pretty close to those levels in my opinion.
I have to say, after looking at some of these charts (I was looking at other indexes as well, just didn't post the charts here), it's hard to argue with taking a longer term approach on some of these trades - you pay a lot less in commissions and make more money. Think about it... if I played that hammer on the YM or ES, I would have to go into the trade with some acceptable risk parameters, but once I was comfortable with it, I could sit back and relax. I really don't know what I'd do with my time then! :unsure: