Trading Quotes
A characteristic of a trending market is that the closes are near the high of the bars in an uptrend and are near the low of the bars in a downtrend. [2003] - Marcel Link
The indicators that I tend to use more than others in my trading are trendlines and channels, stochastics, moving averages, MACD, RSI, ADX, volume, volatility, and Elliott wave analysis. [2003] - Marcel Link
I like using 10- and 35-period averages on intraday charts and add the 200-period one on daily charts. The 200-period average is commonly used to determine the trend of the market. I use it as a way to monitor the market’s long-term direction. The 10-day average riding the market much more closely and giving signals the most quickly, but the market can whipsaw around it during a choppy period. The 35-day average is smoother and acts more as a trendline for the medium term. [2003] - Marcel Link
When the market is trending and you are looking for a place to get in, wait for it to retrace to one of the moving averages or trendlines. [2003] - Marcel Link
Buy when the close is above the 50-period average and the 10-period average is above both the 35- and the 50-period averages. If the close is above the 50-period average but the 10-period average is below the 35-period average exit longs but do not go short. Sell when the close is below the 50-period average and the 10-period average is below both the 35- and the 50-period averages. If the close is below the 50-period average but the 10-period average is above the 35-period average, exit shorts but do not go long. This type of system works great in trending markets but not as well in sideways, choppy markets. [2003] - Marcel Link
The 30 level on the ADX is considered to be a strong indication of how well a trend is doing. If it is below a 20 level, the momentum could be considered weak; during these periods the market was rather choppy and directionless. The level between 20 and 30 is considered neutral. [2003] - Marcel Link
When the ADX peaks and is above 30, you can look for a possible retracement in the market. Any time the ADX is below 20, one should take profits sooner. If, however, the ADX is above 30 and rising, you may consider holding a position longer than normal instead of being tempted to take a quick profit. [2003] - Marcel Link
Trends normally will resume if the market retraces to the 38.2 percent or one-third level and doesn’t break through. The levels at 61.8 percent or two-thirds are considered the breaking point of a trend. If these levels break, the major trend is over and then a new one is beginning. [2003] - Marcel Link
Fibonacci ratios are also useful in predicting how far a market will extend its current trend. This is done by taking the difference between the high and the low of the major move; multiplying it by 1.382 percent, 1.5 percent, and 1.618 percent; and adding it to the low in an up move or subtracting it from the high in a down move. [2003] - Marcel Link
A market is considered to be in an uptrend as long as it stays above its previous low. [2003] - Marcel Link
When the indicator is in the overbought-oversold area, a trader should start thinking about taking profits or scaling out of a piece of the position if he is already in the market. If he is looking to get into the market, he should use the overbought area as a place to wait for a retracement. [2003] - Marcel Link
I normally use the canned lookback periods because this is what everyone else is looking at and I don’t want to be late to the party or get caught anticipating a move that doesn’t happen. For example, when using stochastics, I normally stick with the 14, 3, 3 parameters that most software packages use. I don’t need to get fancy and try to find the best parameter for every market. I typically use 25 and 75 as my overbought and oversold lines because that way it will include more signals. [2003] - Marcel Link
During choppy markets, buying oversold and selling overbought situations can work like a charm. when the ADX is below 20, you can consider the market choppy and range-bound. [2003] - Marcel Link
If you know you have a market that is uptrending and you want to take mainly long trades, the best thing to do is to look for dips in the oscillator to the oversold levels to buy. [2003] - Marcel Link
One doesn’t have to use the same indicators on the different time frames. [2003] - Marcel Link
When a stock, commodity, or index hits or nears a nice round number such as 10,000 on the Dow, 2000 on NASDAQ, $20 in crude, or a significant technical level such as a previous high and can’t break through it, look for a reversal. [2003] - Marcel Link
It is expected that more than half a trader’s trades will be losers—-that’s part of trading—-so in order to compensate, the winners have to be bigger than the losers. Taking too many small profits without letting good trades develop is a bad practice. [2003] - Marcel Link
I sometimes like to exit one-third of my position with a small profit on the first wave; the next one I’ll cover where I would have covered if I had been trading only one contract, and for the final third I’ll hold, trying to capture the big move. If it doesn’t work immediately, you want to exit a third of your position quickly; with the other two-thirds you may use your normal stop area or exit when you know the trade is hopeless. [2003] - Marcel Link
Once the reasons you got into a trade have changed, you should get out of the trade. An example would be when you buy because the market is near a trendline and you think it will continue to trend. If it breaks the line, you were wrong, so don’t hesitate to get out. [2003] - Marcel Link
Cutting losses, cutting losses, and cutting losses are the three keys to successful trading. [2003] - Marcel Link