RobS

Hey man, here are a few thoughts after reading this thread: 1. Do I understand you hve $10K and trading will be your primary source of income? Commissions alone will kill you. But even beyond that, how much income do you need to generate to cover your expenses? 100% return? 200% return? You'd have to be trading at the super elite level to reach that kind of return consistently. This is like saying you want to join the Yankees and bat .350 year after year. What are the odds? If this is your sitiuation and you need to generate this kind of return to cover expenses, YOU SHOULD NOT TRADE. 2. Your stops are waaaay too tight. Don't you know about program trading algos? They hunt for stops like yours based on the order flow. Your tight stops are dead money man. Markets are simply not going to stick to key levels right to the penny. In fact, it's very typical for the market to trade below key levels, take out the stops, and then go back in the main direction. If you don't have enough bankroll to tolerate larger stops, YOU SHOULD NOT TRADE. 3. VSA provides a framework to use, but I'm not sure it's such a great day-trading method. Wykoff himself was not a day-trader exclusively. Beyond that, I have read up on VSA and there are a number of very good threads about it on this forum, but I'll simply say some VSA concepts are dead wrong. For example, that whole "there must be hidden selling within the bar" thing. That's so wrong it's amazing they continue to say it. Volume is just the exchange of shares. The amount of selling is exactly equal to the amount of buying, by definition. Now, maybe you don't trade based on that concept, I don't know. But still, this method isn't working for you and you need to figure quickly whether you need a new method or whether you are not applying the method that correctly. Until you get a better sense of this, I strong recommend that YOU SHOULD NOT TRADE. 4. I have read repeatedly that like any difficult skill, it takes years to get good. The usual length I hear is 3 years just to get profitable (and this ain't batting .350 in the major leagues). Do you have enough money to survive your learning curve or will you be broke before you know enough to be profitable? You know what I am going to say man: if you don't think you have enough money to survive a realistic learning curve, YOU SHOULD NOT TRADE. From reading this thread I can tell that this isn't what you want to hear, but I'm just trying to help. Get a day job and study the markets at night. Save your money so you build up a bigger account and then when you have a bigger cushion to work with, as well as greater understanding, you'll be in a much better position. Best of luck to you. -Rob

While my view is less based on indicators, I tend to agree that we saw the bottom in mid-July. On the lowest day, oil was $147 and the market feared a Fannie and Freddie collapse. Oil is now @116 and the Feds have stepped in to protect Fannie and Freddie. As a result, the market seems to react very positively to any good news and yet heavily discounts bad news. Today the Dow rose 300+ points even though the news was mixed. Therefore, I don't see us retesting the mid-July lows unless there is some VERY bad news that drives oil back up or there are new reports of significant financial system melt downs.