Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Crash Edition - 26th Mar 19
Handy Ways to Boost Your Home Income - 26th Mar 19
US Treasury Bond Yield Inversion and Political Fed Cycles - 26th Mar 19
Golan Heights Oil all about the Shekels - 26th Mar 19
Falling Yields a Catalyst for The Gold Catalyst - 26th Mar 19
Can We Lock Up Rachel Maddow Now? - 25th Mar 19
Real US National Debt Might Be $230 Trillion - 25th Mar 19
Friday's Stock Market Sell-Off - New Downtrend or Just Correction? - 25th Mar 19
20 Days Left to Find Buying Opportunities In Gold - 25th Mar 19
Will the Historic Imbalance in Gold Stocks to Gold Price Resolve ? - 25th Mar 19
EasySMX Wireless Games Controllers Review - 25th Mar 19
Stock Market Short-term Top - 25th Mar 19
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

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

6 Critical Money Making Rules