Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stocks Overbought or Oversold? Where to Put Your Stops

InvestorEducation / Learn to Trade Nov 01, 2012 - 11:55 AM GMT

By: Chris_Vermeulen

InvestorEducation

Best Financial Markets Analysis ArticleIts 1:00pm ET and volume is drying up.

We did see a nice pop this morning breaking some previous pivot highs from last week and volume looks strong. Long story short… stocks are overbought here very similar to the past two highs as seen in the chart below. The big question from here is what to do now? Well, I wanna see some bullish patterns and volume over the next 12-48 hours if we are going to be looking to get long for an intermediate rally that lasts several weeks taking the indexes to new highs.


Take a look at the 10 minute intraday chart of the past fiveOPEN trading sessions (Wed, Thurs, Fri, Wed, Today) as notice how choppy price has been…. It’s shaking traders up who do not know how to adjust their trading strategy during rising volatility and mixed market cycles. This is something I will be teaching in the near future using my own eSignal trading indicators and Signals as it has been CRUCIAL in the past 3 year to profit from and minimize losses.

Daily Chart of my Cycles & Sentiment Indicator of the SPY:

Precious metals are not participating today and even gold stocks are trading lower… Seems people are really focused on pure risk on (equities) today.

Yesterday we saw utilities rally as fear worked its way into the market. Well today utilities (XLU) is trading lower. Interesting how the market move and why I love them so much…

Last week I mention how RIMM looked ready for a major breakout and rally. This week it has jumped over 12% which is exciting. The next to pop looks like KOL coal ETF.

One of my members sent an email asking for help and he could not have picked a better time to ask because the market is eating traders alive here…
———————————————–

MEMBERS QUESTION:

Hi Chris,
In the last week, with the chopping around, I’ve had the bad fortune of being short ES, and multiple times being stopped by a little spike, and then I am watching the market go lower without me.

Last Thursday, I put in a buy stop for 1392, and that got triggered during a spike down yesterday. This afternoon (I live in Singapore), my sell stop of 1417 that had been set last Thursday got hit, and I watch in frustration as ES dipped to 1412 without me.

This has been very frustrating and expensive – so I think I really need a tutorial/advice on setting proper stops.

It almost seems like someone can see my stops (set above or below what I measure to be resistance and support) and literally aims for them to take me out.

Some months ago, when this happened a lot, I stopped using stops completely. Then got badly maimed by the Draghi and Bernanke bounces in September.

Hope this is something you can look at as an enhancement to your excellent service (and I would gladly pay for this).
———————————————–

MY RESPONSE:
Yes, stops are tough to figure out for sure. If you are getting shaken up as you stated then you are not setting your stops properly. Because of the leverage involved with futures most people put too tight of a stop at or just beyond recent pivot highs or lows… These levels are where the market makers TRY to get the price to reach on a regular basis so they end up with a huge position that is very profitable in most cased within hours. Unfortunately these positions should have been in your trading account and not in theirs.

The market moves on emotions and 95% of traders do not have a clearly documented step by step rule book to follow, which removes emotions allowing them to nail down a consistently profitable strategy and stick to it. While I already have rules for each type of trade setup use last week I took a course to help me fine tune what I have even more so I can pass along how I do things to you. If you want to build your own documented system properly, then you really need to take Brian McAboy’s “Trading System Mastery” course. It’s a couple short manuals and 4 hours of VERY important step by step instructions on just how to document/create the perfect strategy for you.

Anyways, be sure to keep in mind that during overnight trading (After 4pm ET until 9:30am ET) is when most of your stops will trigger. That is when the market makers can walk the price up and down to these key levels and take your stops.

I focus on my stops only being active during regular trading hours to avoid most of this BS manipulation. While I am subject to price gaps using regular trading hour stops only, I know my risk and I know that an index is not going move more than 5% against me at the open in a worst case scenario. I manage my risk through position size and use wider stops thank most traders because I do not have all my money in ONE highly leveraged position.

I will put together an educational report on how, when and where you should place your stops along with how you can take advantage of it. It will take me a week or two to create but be on the lookout for it…

If you would like to learn more about trading and get my trading alerts visit

By Chris Vermeulen

Please visit my website for more information. http://www.TheGoldAndOilGuy.com

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com.  There he shares his highly successful, low-risk trading method.  For 7 years Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets.  Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

This article is intended solely for information purposes. The opinions are those of the author only. Please conduct further research and consult your financial advisor before making any investment/trading decision. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in