Tuesday, March 27, 2007

Keep An Eye On The General Market

I found DEI on the BOB set-up filter Sunday Night and had I been around on Monday I could have played it.

First there is the BOB at 10:30 and even though the previous two candles don't appear to fit the software is set-up to output a BOB when one is found and that's what it did here.

If that wasn't enough then the candle at 10:15 being the second bounce on S1 would have informed your trade. In other words you could have taken this as an S1 trade because two candles had already tried to pierce S1 and had failed. As it turned out 4 candles attempted and failed - so the candle at 11:00 would have said to you "I'm going up - buy me."

If that failed then the crossover at 11:30 might have given one a clue that this was a good buy.

For an exit - we have the DOJI just before R1 followed by a spinner that touched R1 - that's your clue to take the profit and run.

If that wasn't enough then you could have blindly bought DEI based on QQQQ action. In other words seeing it bouncing along S1 at 10:15 you can be fairly confident that it is going up. Then, a quick glance at your QQQQ chart would convince you that the market is turning.

When you trade - keep your eye on the general market for excellent signals of what to do next. And try not to trade against the market - it seldom works. Of course - sometimes the market continues and your trade collapses - also be ready to read the topping signals.