Added: Jul 31, 2010
Author: StockTradingMaster
Duration: 2:59
One of my preferred day trading chart patterns to swing trade short term is the Symmetrical Triangle. The Symmetrical Triangle chart pattern is kind of weird for the reason that it seems as if energy increases as the stock travels closer into the head of the pattern then it abruptly does a breakout. The anticipated target of the breakout move is equivalent to the distance the stock traveled going into the pattern. Nevertheless you ought to use the Symmetrical Triangle formation in correlation with other technical indicators like the MACD. The MACD needs to have the signal and the divergence lines both trending higher. For calculating when to sell after the breakout move, I choose to use the Slow Stochastic. Something that I will do is fiddle with my Slow Stochastic settings for the stock or market I am stock trading. You can check out the previous video I did about the dynamic tool I use to accomplish this in a couple of seconds. After you have the settings for your stock trading style and that have generated at least 3 good buy and sell signals, you will have your exit mark. Currently in the Market Vectors Steel ETF (SLX), the optimized Slow Stochastic settings are 4, 4, 2. The objective is to purchase as soon as the stock does a breakout, and exit out of the market on the Slow Stochastic cross of the %K and %D lines. I dig this chart as well for a possible re-entry. We have done a textbook Fibonacci retracement of 38.2% after the Symmetrical Triangle breakout. The Slow Stochastic is back closer to oversold territory. You have to watch out though because the 50 day moving average is below the 200 day moving average but the 50 has turned up. On a elementary level, I like steel and understand why it did a Symmetrical Triangle breakout. As the international economic recovery picks up pace, steel consumption will blast upward as economic activity spurs construction and the consumption of steel. I understand we hear a lot about a double dip international recession but I just don't imagine that is very likely now after the second quarter 2010 earnings season. Some 60% to 75% of all corporations reported an increase in earnings year over year. Another thing you have to bear in mind is that fear sells and media organizations are masters of this marketing concept. Which headline do you think generates more interest, "Global Economic Recovery Slows But Continues" or "Fed Closes 5 More Banks, Teeters On Global Collapse"? Everyone wants to know the spooky and chilling particulars of such an staggering, attention grabbing headline. The first headline is just, yawn, well, right, yippe ki-yay and let us all hold hands and sing Kum bay ya, my Lord, kum bay ya. You as well are going into the November 2010 elections so you have Republicans and their sham Fox News seeking to talk down the economy and really who do not want an economic recovery before November. Then you have your gold insects which usually are Republicans, and who have a huge financial interest at risk in the U.S. dollar falling and other despair and catastrophic economic statistics. The scheme being they do not want an economic recovery for the reason that they want everybody terrified and running out buying gold. Finally, you have media organizations like Fox News bringing together both Republican politics of trying to stop an economic recovery before November, and gold bugs by bringing together the reciprocally shared welfare of the two. That's why you had Glenn Beck, Bill Oreilly and a few others taking money from gold companies like Gold Line.
Channel: Education
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