I used to buy when a stock moves up and sell when it goes down. It took me a long time to realise that this might feel nice, but really does hurt profit potential. Toni Hansen showed me the importance of momentum. IPG was a strong mover in the morning but came off the highs. On the 15 min timeframe I saw three bars up, and three bars down, downside momentum slower then upside. Timing is everything and if there is a three bar move I only start looking to buy after it has reacted for at least the same amount of time. When price is near support, I start looking for a change in momentum (or pace as Toni calls it) on a smaller timeframe, often the 1 min chart. I try to enter as close to support as possible. It improves r/rw tremendously. You might think by entering early that a flush move is more likely, but often the opposite it true. Click on the chart to see the complete marketview I look at.
Do the opposite of what I feel like…
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by aon
13 Dec 2008 at 21:06
I like your blog Art. Keep it coming more frequently.
Thx!