| So, you want to be a DayTrader? There are several tools which can help you succeed in DayTrading. Of of the
tool is Bollinger Bands. The following links (http://www.bollingerbands.com) shows
the best ways to use them. I certainly will not dare to argue with him over the
proper uses of the bands he invented but I would only try to explain that I have found
that there exists a genuine need for speedy interpretations when we are trying to day
trade.
The particular trading I like best is, as you are probably well aware, somewheres in the
'lightning speed' category. LOL!! Because of this I have found it is very important
to trim away all of the extras in several indicators and concentrate on those parts that
react quickly enough and with sufficient predicting quality to aid me in making
split-second decisions.
In doing this I have found that just using the Bands themselves with two standard
deviations is sufficient for me to use them for interpreting the probable direction of the
price. Particularly when the price has bottomed and is about to move back up and vice
versa. I use the MACD graph as well as the MACD Histogram and a Bar graph for Volume
as confirming indicators as well. I really do not use Bollinger Bands by themselves
but I feel they are so reliable that in many instances I could trade effectively using
them only. They are my main indicator and the rest are used only to confirm.
As for %B, etc I don't get involved with these as I have found that, for me, using as few
graphed indicators as possible, I can work at top speed. You may recall that the
main reason the first Apple computers were so phenomenal was due to the use of icons
instead of having to type machine language. You simply dragged a file to the trash can to
delete it instead of typing del Filexyz.doc. It saved time and sped things up
tremendously.
Learning to use the indicators visually will save time and give you the same accuracy in
interpreting them. But of course, you do need to learn to interpret them. I
believe you personally do know but there are more than a few who will read this and think
that these indicators are all that is needed. That is definitely not true so that is
why I continually stress everyone buy and read the books on Technical Analysis.
As an example of when to sell a stock using Bollinger Bands, what I look for in the Bands
is to see the 1 minute price bar rise above or out of the bands and see that the price
does not exceed that for a couple of minutes. The vollume usually picks up but, even
though you will see a lot of selling coming in as the trading intensifies, the price does
not rise any more. You will then see the price begin to move back within the top of
the bands and that is a great indication it has hit its resistance and that is a sell
indicator to me. The same hold true when picking a bottom and looking for it to run
back up.
John Bollinger wrote this on his site and I have copied without his permission (Sorry,
John but I do give you full acknowledgement. LOL!!) It helps explain what I
mean:
"Trading bands answer the question whether prices are high or low on a relative
basis. The matter actually centers on the phrase "a relative basis."
Trading bands do not give absolute buy and sell signals simply by having been
touched; rather, they provide a framework within which price may be related to
indicators.
Some older work stated that deviation from a trend as measured by standard deviation from
a moving average was used to determine extreme overbought and oversold states. But I
recommend the use of trading bands as the generation of buy, sell and continuation signals
through the comparison of an additional indicator to the action of price within the bands.
If price tags the upper band and indicator action confirms it, no sell signal is
generated. On the other hand, if price tags the upper band and indicator action does
not confirm (that is, it diverges), we have a sell signal. The first situation is
not a sell signal; instead, it is a continuation signal if a buy signal was in
effect.
It is also possible to generate signals from price action within the bands alone. A
top (chart formation) formed outside the bands followed by a second top inside the bands
constitutes a sell signal. There is no requirement for the second top's position
relative to the first top, only relative to the bands. This often helps in spotting tops
where the second push goes to a nominal new high. Of course, the converse is true for
lows."
Hope this helps!
written by William N. Wall |
Things you should do to avoid mistakes by tigerhomme 09/03/1999 01:21 pm
EDT
Hey Guys, I am a beginner myself. I thought I share my experiences with you. I
learned to trade in the hard way that cause me to lost 70% of my money. Here are
things you should do to avoid mistakes:
- Paper trading first.
- Read the books and learn the chart (check out the list that WnW recommended).
- Define in and out point.
- If you miss the train, wait for another one don't chase it you may get hurt.
- Never trade because you are anxious.
- Never trade if you have computer, connection problems.
- Never trade if you don't feeling well.
- Beware of stock promoter.
- Always do your due dilligence.
- Always use limit order.
- Stay away from stock that may get delisted with an "E" in the back Ex.
AUMYE...
- Beware of pump and dump.
- Buy low sell high
- Read the news but don't believe in all news.
- Stay calm don't panic.
- Take profit don't wait for big number.
- Cut loss, don't think if you wait the stock may go back up - Get out!
- Never go back to the same stock that you lost money on it.
- Don't fall in love with any stock.
- Discipline!
http://clubs.yahoo.com/clubs/thewallstreettreasurechest
- One of the best stock forum where I get my advices and tips.
PC Quote Online - Stock Quotes, Business News, F.
American Stock Exchange
Better Business Bureau
Bryan Clark's Favorite Stock Pages
- CheckFree Investment Services Quote Server
- CheckFree Investment Services
- Global Computing, Inc. - Business
Home Pages
- Hoovers Online
- Investing Online
- Market Source Online
- Money Online
Personal Finance Center
- MONEY QUICK QUOTES
- NASDAQ
- NETworth
- New York Stock Exchange
- Quote.Com
- Schwab.com
- Stockmaster
- Universal Currency Changer
- Wallstreet.Com
- Wallstreet
- World Exchange
The following list of books are
strongly recommended:
- Trader Vic-
Methods of a Wall Street Master
by Victor Sperandeo
- Day Trade Online
by Christopher Farrell
- The Complete Day Trader
by Jake Bernstein
- Hit & Run Trading
The Short Term Stock Traders' Bible
by Jeff Cooper
- Secrets of the SOES Bandit
by Harvey Houtkin
- Hit & Run II
by Jeff Cooper
Books on Trading Psycholgy
'Learn to be in charge of yourself
and you will become a successful Trader!'
- Investment Psychology Explained
By Martin J. Pring
- Trade Your Way to Financial Freedom
by Van K. Tharp
- Extraordinary Popular Delusions
and the Madness of Crowds &
Confusion de Confusiones
By Mackay & De La Vega
- The Winning Edge
by Bernstein & Toghraie
- Winning Edge II
by Adrienne Toghraie
- Trading To Win
by Ari Kiev
- The Crowd
by Gustave le Bon
Books on Technical analysis!
"The charts Tell You Everything -
Learn How to Use them!"
"They are the roadmap to the
'Wall Street Tresure Chest'."
- Technical Analysis of Stock Trends
by Edwards and Magee
- Getting Started in Technical Analysis
by Jack D. Schwager
- Bar Chart Basics
by Darrell R. Johnson
- Martin Pring's Introduction to
Technical Analysis
A CD Seminar and Workbook
by Martin J. Pring
- Technical analysis And Stock Market Profits
by Richard Schabacker
- It's When You Sell that counts
by Donald Cassidy
- Understanding Bollinger Bands
by Edward D. dobson
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