|
Author: Larry Potter Article source: http://tinystidbits.blogspot.com/. Used with author's permission.
Every so often we get a question asking why we don't "buy the dips" more when we are looking at possible stock plays and the answer is really simple. It's not "our" style. That isn't to say it's wrong, or that you shouldn't do it, we just don't find it works as well for us.
Let me explain. In the world of trading there are a zillion styles. Some ride momentum, some invest in fundamentals, some are pure daytrades while some are swing traders. Some play the technicals, some play buybacks. Some play splits. Some play the market "versus" the bond pits. We tend to play sector strength and individual breakout/breakdowns.
There is a lot of money to be made on 3,5, and 8 day reversal patterns. Watch the charts and you will see that stocks often reverse on those days, so buying in and catching the bounce works for many people. Just because we don't focus on that strategy doesn't make it wrong, it's just not "us". We like to look for break out or break down patterns, and try and correlate them to overall market directions.
Suppose you have a weak looking stock that is just barely hanging onto support.If the overall market puts in a huge day, chances are that stock will not violate it's support and fall. But on the other hand, if you find that weak pattern and then the market has a bad hair day, chances are pretty good that it will roll over and fall pretty hard. So, we short it. On the long side the theory works the same way. Find a stock looking to break out and couple it with a bounce or rising market. It will usually make it.
So, we don't have anything against working reversals, buying dips, etc. It's simply not our style, and lets face facts, some people do some things better than others. We aren't great at picking reversals, but we are pretty good at breakout/breakdowns. If you find yourself getting good at picking reversal plays, by all means go for it folks. In fact, shoot us a note and let us know how you're doing! For more FREE trading tips, enter your email address at:
http://lb.bcentral.com/ex/manage/subscriberprefs?customerid=12826
The Twenty-First Century Parent
What's life like for a parent these days? Read the following and find out!
The Crisis of Human Survival
The hole in the ozone layer above the North Pole is becoming larger, allowing large volumes of ultraviolet radiation to fall directly on the Earth's surface, ca...
FOREX Online Trading – An Introduction
The Foreign Exchange Market (FOREX) is the world's largest trading market and the first truly online market. It is also now accessible to all with entry level ...
Creating Functional Dialogue for Your Website
The dialogue you create on your website keeps visiters shopping for more, reading, and intently coming back for more and more of what you have to offer. Don't l...
Insurance in Northern Ireland: Historic Difficulties
The legacy of the "troubles" in Northern Ireland has had a major impact in the choice of Insurance providers in Ulster as well as the significant premiums they ...
A Unique Joint Venture Twist: Make Huge Profits Even If You Have No Money, No Products, and No List
Would you like to jumpstart your online or offline business without spending a ton of money? Without a doubt, joint venture marketing is the most powerful secr...
Social Networking and Music: MySpace Puts It All Together in a Virtual Community
Today's music fan interacts with a "community" that is far larger than anyone ever dreamed possible before the widespread personal use of the Internet. This soc...
The Three Primary Powers Of Network Marketing
Network Marketing, 'MLM', and Multi Level Marketing are all terms
that refer to the same type of business model. This industry has
had more than it's share o...
Why You Need an Article-Marketing Strategy before Posting a Single Article Online I
It's one thing to spin out an article or two. It's quite another to incorporate them into a strategy that builds your website traffic, reputation, and business....
7 Keys to a Happy Life
This article is taken from my recently published book Earth Wisdom. A real story of one person's metaphysical journey towards health, evolution, and love. Shows...
A Secret and A Formula
The secret to success is having a strong vision and the will to overcome whatever obstacles get in your way. Not what you wanted to hear? Read on.
The Most Successful Person I Know
I'm going out on a limb today by writing about the most successful person that I know. It feels like going out on a limb because the person is ME, and I'm awar...
Stay at Home Mom You Need to Raise Cowboys
Now I know that is not how the song goes, I have had cousins from central Texas drag me to Gilley's to listen to that song live and they sang every word without...
Reveling In Rest And Rejuvenation
As a Burned Out Baby Boomer in recovery, it's always a bit of a challenge to leave my business for a week, in large part because I also love what I do so much. ...
We Teach Others How to Treat Us
Treat yourself with respect and others will follow suit. It is never okay to treat yourself disrespectfully or to allow others to get away with it.
Cover Letters
Cover Letters: Are you telling them what they want to know? Let's face it. Recruiters (or employers) are smarter than we think. Bigger organizations pay a heft...
Diet Fads Come And Go
Cursed by dieters everywhere, and loved by children around the world, sugar is one those substances we 'love to hate' and 'hate to love'! It can make bland food...
Dafur Emergency: A Challenge To Civilisation
Dafur, the western part of Sudan has become not only a focal point but the turning point that changed the political landscape of Sudan. Dafur, the despised and ...
Hiring the Right Graphic Designer for Your Small Business
Hiring the right graphic designer -- a true expert -- is a bit more involved
than just randomly choosing someone from the Yellow Pages or hiring
your third co...
Encouraging Blossoms of Achievement
By sharing with others our faith in their abilities, we nourish their hopes and dreams. We begin to see our acknowledgments mirrored back with magnificent bloss...
Beating The NFL: A Guide To Smart Sports Betting.
Learn what kinds of bets the sharps do--and don't-- make during the NFL season.
Beneficiaries of the Promise
The gospel started with Abraham. That is why Scripture says he was introduced to the gospel in advance. If anyone was ever a religious fanatic it was Abraham. I...
Earrings The Ultimate Fashion Statement
Earrings are an important part of every woman's wardrobe, whether we are headed for a day at the beach, to the office, or to a wedding. Your earrings give a su...
Problem: Thinning Hair? Solution: Saw Palmetto!
We know that many factors contribute to thinning hair. Thinning hair can strike anyone at anytime!
|
Print this page