What determines whether or not I take a position, up or down, in a stock , commodity, or futures contract?
WHAT IS THE SINGLE BIGGEST FACTOR THAT I SHOULD KNOW?
To me the answer is simple. Is what I am reviewing "TRENDING" or "RANGE BOUND"?
I need to know if a stock or commodity is trending. Why? RANGE BOUND assets are very hard to make money, long or short.
Let's look at-Seattle-Genetics, a biotechnology company focused on the development and commercialization of therapies for the treatment of cancer.
Is-SGEN TRENDING? Yes. How do I know?
Several things tell me. The buy Fractals (in rectangle). The rising Ichimoku Cloud . The rising trend-line. The Alligator is feeding in the up trend.
IMPORTANT: to determine the STRENGTH of the trend I use CHOP, (lower indicator below chart). The lower the red line the stronger the trend.
The higher the red line the more likely I will see "choppiness", or range bound trading. (It is harder to make money with lots of chop).
Right now CHOP tells me-SGEN has a trend, the trend is very strong (it is below the shaded area).
The dashed line is the price trend in CHOP, so the trend will likely remain strong.
The lower the line is below the shaded area, the stronger the trend.
Here are the positives for-SGEN:
1. Currently a buy Fractal.
2. The lower indicator under the chart is CHOP; readings below the shaded area (38.2) indicate a strong trend.
Authors Note: last weekend I reviewed almost 900 charts for trend. I found only 8 CHARTS THAT HAD CHOP READINGS UNDER THE SHADED AREA.
This told me that only about 1% of what I reviewed are trending. If you have had trouble with your trades lately, ask yourself the TREND question.
Then I would suggest you add trend analysis to your own "Rules of Engagement". It will most likely keep you out of frustrating range bound trades.
3. The top lower indicator is phase energy, and this is positive. Very strong.
4. The alligator is feeding in the uptrend.
5. 5/34 MACD (top indicator) is strong.
6. Prices are trading above the Ichimoku Cloud .
7. Prices are trading above the thick red Ichimoku Cloud conversion line.
8. Prices are trading above the Ki jun-Sen baseline of the Ichimoku Cloud and this has been HEADING SHARPLY HIGHER.
9. The Directional Movement (top middle, a.k.a.-DMI) is strong.
In my opinion, SGEN-is in a solid uptrend.
I hope you establish your own "Rules of Engagement" and stand by them.
Two final thought:s if you swing trade and look left for structure, an understanding of trend enhances your probabilities of being correct.
If the CHOP is below the shaded area and you have sell Fractals and a falling cloud, and other indicators are falling,
CHOP is still valid in telling you the strength of the down-trend. USE Directional Movement (a.k.a.-DMI) to help compliment CHOP.
If you do your homework you will find plenty of opportunities.
Identify TRENDS and wait for the market to come to your price objective. Don't chase.
I hope this helps you.
Mark Twain said: “Good judgment comes from experience, and most of that comes from bad judgment.”
Good luck to you. Don.
WHAT IS THE SINGLE BIGGEST FACTOR THAT I SHOULD KNOW?
To me the answer is simple. Is what I am reviewing "TRENDING" or "RANGE BOUND"?
I need to know if a stock or commodity is trending. Why? RANGE BOUND assets are very hard to make money, long or short.
Let's look at-Seattle-Genetics, a biotechnology company focused on the development and commercialization of therapies for the treatment of cancer.
Is-SGEN TRENDING? Yes. How do I know?
Several things tell me. The buy Fractals (in rectangle). The rising Ichimoku Cloud . The rising trend-line. The Alligator is feeding in the up trend.
IMPORTANT: to determine the STRENGTH of the trend I use CHOP, (lower indicator below chart). The lower the red line the stronger the trend.
The higher the red line the more likely I will see "choppiness", or range bound trading. (It is harder to make money with lots of chop).
Right now CHOP tells me-SGEN has a trend, the trend is very strong (it is below the shaded area).
The dashed line is the price trend in CHOP, so the trend will likely remain strong.
The lower the line is below the shaded area, the stronger the trend.
Here are the positives for-SGEN:
1. Currently a buy Fractal.
2. The lower indicator under the chart is CHOP; readings below the shaded area (38.2) indicate a strong trend.
Authors Note: last weekend I reviewed almost 900 charts for trend. I found only 8 CHARTS THAT HAD CHOP READINGS UNDER THE SHADED AREA.
This told me that only about 1% of what I reviewed are trending. If you have had trouble with your trades lately, ask yourself the TREND question.
Then I would suggest you add trend analysis to your own "Rules of Engagement". It will most likely keep you out of frustrating range bound trades.
3. The top lower indicator is phase energy, and this is positive. Very strong.
4. The alligator is feeding in the uptrend.
5. 5/34 MACD (top indicator) is strong.
6. Prices are trading above the Ichimoku Cloud .
7. Prices are trading above the thick red Ichimoku Cloud conversion line.
8. Prices are trading above the Ki jun-Sen baseline of the Ichimoku Cloud and this has been HEADING SHARPLY HIGHER.
9. The Directional Movement (top middle, a.k.a.-DMI) is strong.
In my opinion, SGEN-is in a solid uptrend.
I hope you establish your own "Rules of Engagement" and stand by them.
Two final thought:s if you swing trade and look left for structure, an understanding of trend enhances your probabilities of being correct.
If the CHOP is below the shaded area and you have sell Fractals and a falling cloud, and other indicators are falling,
CHOP is still valid in telling you the strength of the down-trend. USE Directional Movement (a.k.a.-DMI) to help compliment CHOP.
If you do your homework you will find plenty of opportunities.
Identify TRENDS and wait for the market to come to your price objective. Don't chase.
I hope this helps you.
Mark Twain said: “Good judgment comes from experience, and most of that comes from bad judgment.”
Good luck to you. Don.