Monday, November 24, 2008

SP 500 chart update

Thanks to Citigroup Inc. (C) and others :) We are getting another bounce up.
Now, regarding the S&P 500 ; lets think in terms of probabilities.
I am often asked why traders need a coach .... mmm .... ask Tiger Woods :)
A coach is suppose to bring out the best in you. My goal (besides teaching you how to trade) is to incite you to plan a trade.
In an early post, I drew an arrow where I expected the SP 500 to land ; a burst up, followed by a pull back right into that channel.
Drawing a scenario, and printing that chart on your wall really helps !
It makes you "program" your brain to know what price pattern to expect.
You then need levels of probabilities ; low, medium and high
Example ;
1) Price zooms up fast to 1000 ? low probability
2) Price zooms up to 900 then pulls back ? medium to high probability
When those probabilities are "CLEAR" in your mind, then you can plan a trade.

1 comments:

Steph said...

All the rallies we are seeing in the last 2 trading sessions. Bear market rally or things a re really picking up?