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nerstone of Fibonacci, we then would assume that our first trade would be to buy at the 33% retracement. We would also put our sell stop just below the 50% retracement. In a true uptrending market, the price rarely goes below the 50% retracement. Furthermore, if that same market went below 66% retracement, it could be a good signal of a countermove to the downside. If all goes well, I will want to take profit at the upper 50% retracement. We could repeat this same trade over and over. Let the markets come to you; don't chase them. If the S&Ps are at 1010.00, our first buy signal will be around 1006.60, and we would put the sale stop at 1004.80. We then want to take profit at 1015.00. If the market traded below 1003.30, it could be a good indication of a change in the trend. |
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Just a little note: Keep your eye on the open interest. In a long-term rally, the open interest should increase with the rise of the markets. If the trading range increases and the open interest doesn't, keep your eyes open for a larger countermove to the downside. |
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Neal: Any final thoughts? |
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Mark: I would just say to keep your focus wide and take a look at the big picture. One trading day doesn't make a career. Don't try to go for the big kill, or you could wind up on the wrong side of the trade. |
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Mark can be reached at (773) 588-6636. |
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