Comments on: CSCO Shows a Dummy Spot Daytrade and a Swing Entry (14 Aug 2006) http://dummyspots.com/2006/08/14-august-2006-csco-shows-a-dummy-spot-daytrade/ Stocks, Options, Currencies and One Big Dummy Tue, 06 Jan 2009 22:23:34 +0000 http://wordpress.org/?v=2.2.1 By: Will http://dummyspots.com/2006/08/14-august-2006-csco-shows-a-dummy-spot-daytrade/#comment-29 Will Wed, 16 Aug 2006 13:33:04 +0000 http://dummyspots.com/2006/08/14-august-2006-csco-shows-a-dummy-spot-daytrade/#comment-29 Gav, This is what I consider one of the old "bread and butter" setups, like the GM example I referenced. If the market opens strongly, I'll scroll through a list of stocks which gapped up, and follow them on 5-15 minute bars (the later in the day, the longer an interval I use). If they rise or move sideways without retracing into the gap, I consider the "prevailing trend" (for the morning at least) to be "up," and look for an opportunity to go long. As the day evolves, the intraday bars (particularly if I get all the way down to 15's) will show a clear trend, but that's often in hindsight, after most of the move is over. I mainly watch higher lows for upswings and lower highs for downswings. I suppose I could draw lines on the intraday charts, but for me it's just easier to follow the lows up and the highs down. When I'm looking to go long, the best setup is sideways or a slight pullback (lower highs, lower lows) on withering volume. A Dummy Spot often signals the end of such a pullback, and I enter on the break of its top (next bar). On the CSCO example in this post, I see the bars as: 0940- higher low (primary "up" trend), 0950- higher low (ditto), 1000- lower high (pullback), 1010- lower high (pullback), 1020- inside bar (Dummy Spot), 1030- break of Dummy Spot, entry point into primary trend. Now I must insert here that I have so many red flags for these trades that 9/10 or more of the stocks I start the day watching are eliminated within 20-45 minutes. I tolerate no wishy-washy at all, because a <em>perfect</em> entry only puts you at a <em>slight</em> advantage, and anything less is a variation of "buy and hope." As for the technical indicators, I don't even use moving averages anymore (intraday). I'm strictly watching the bars and the volume evolve, looking for smooth swings and pullbacks, killing off the stocks that don't play nice, and hopefully ending up with one or two which behave perfectly and show me an opening for an entry. Swing trades (I define these as trades I take off of daily bars) are a different story, but this comment has almost turned into a post with all my hot air, so I'll stop for now. Thanks for the dialog. Gav,
This is what I consider one of the old “bread and butter” setups, like the GM example I referenced. If the market opens strongly, I’ll scroll through a list of stocks which gapped up, and follow them on 5-15 minute bars (the later in the day, the longer an interval I use). If they rise or move sideways without retracing into the gap, I consider the “prevailing trend” (for the morning at least) to be “up,” and look for an opportunity to go long.

As the day evolves, the intraday bars (particularly if I get all the way down to 15’s) will show a clear trend, but that’s often in hindsight, after most of the move is over. I mainly watch higher lows for upswings and lower highs for downswings. I suppose I could draw lines on the intraday charts, but for me it’s just easier to follow the lows up and the highs down.

When I’m looking to go long, the best setup is sideways or a slight pullback (lower highs, lower lows) on withering volume. A Dummy Spot often signals the end of such a pullback, and I enter on the break of its top (next bar).

On the CSCO example in this post, I see the bars as: 0940- higher low (primary “up” trend), 0950- higher low (ditto), 1000- lower high (pullback), 1010- lower high (pullback), 1020- inside bar (Dummy Spot), 1030- break of Dummy Spot, entry point into primary trend.

Now I must insert here that I have so many red flags for these trades that 9/10 or more of the stocks I start the day watching are eliminated within 20-45 minutes. I tolerate no wishy-washy at all, because a perfect entry only puts you at a slight advantage, and anything less is a variation of “buy and hope.”

As for the technical indicators, I don’t even use moving averages anymore (intraday). I’m strictly watching the bars and the volume evolve, looking for smooth swings and pullbacks, killing off the stocks that don’t play nice, and hopefully ending up with one or two which behave perfectly and show me an opening for an entry.

Swing trades (I define these as trades I take off of daily bars) are a different story, but this comment has almost turned into a post with all my hot air, so I’ll stop for now.

Thanks for the dialog.

]]> By: Gav http://dummyspots.com/2006/08/14-august-2006-csco-shows-a-dummy-spot-daytrade/#comment-28 Gav Wed, 16 Aug 2006 09:24:17 +0000 http://dummyspots.com/2006/08/14-august-2006-csco-shows-a-dummy-spot-daytrade/#comment-28 That was a nice dummy setup. btw, how do you determine the trend? since dummy spot is an entry point to join the established trend. I didn't see any line or moving average shown in your chat. Care to share? That was a nice dummy setup. btw, how do you determine the trend? since dummy spot is an entry point to join the established trend. I didn’t see any line or moving average shown in your chat. Care to share?

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