May 14th , 2011
Thursday AAPL rolled over to a sell signal on our Kill Zone daily chart. We consider this a counter trend trade even though there has been waves to the downside from the $365 high. It is important to have rules to tell you if it is with the trend or against the trend.
The question "which direction is the trend?" is a misleading question because there are many time frames someone could be thinking of or looking at when they ask the question. On the monthly and weekly charts AAPL is still in a bullish waves and since we are entering on a daily chart we always look at two higher time frame charts to get the answer to the question "which direction is the trend?"
This rule is also true when we are day trading on a three minute chart. We use a 60,10 and 3 to get the answers we need to make the best trading decisions.
Everyone always says to "confirm your entries" but if you are still wondering how to confirm your trades the process is pointless. Simply saying something does not mean you know how to do it especially with trading.
On AAPL there is still a bullish pattern that can hold it around the $333. Even if it does go to the lower target at $305 there will be a wave within a wave because nothing goes up or down in a straight line. It is the bounce off of $333 that will tell us if AAPL will hold or go down to the target. This is also called the second entry zone.
Happy Trading,
www.eMiniSchool.com
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