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Educational Chats - Support & Resistance, General
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[16:05] <bluemonkey_67> ok lets get
started
[16:05] <mikep> Ok professor BM..... lets go
[16:05] <bluemonkey_67> is everyone here
[16:05] <bluemonkey_67> Tonight's educational chat
will be specific to the support and resistance calls that
we issue via e-mail on a regular basis. We will use EBAY
for most examples at the end of this discussion and we
will also ask for suggestions about other stocks that
you may want to use in other examples.
[16:05] <bluemonkey_67> Before we begin we must
understand that this chat will have 4 parts. The first
is a description of the calls as they are presented to
you via e-mail. The next section will be a definition
of the theory behind these calls. Next, how do we use
them? And finally, where do the numbers come from.
[16:06] <bluemonkey_67> I will pause for questions
after each section. Please hold your questions until I
complete the section and until I ask for them, otherwise
the chat will almost surely be disrupted. Thank you.
[16:06] <bluemonkey_67> is everyone with me?
[16:06] <mikep> No comments - No questions.....
Ooops
[16:06] <Dr_Winston> Will you explain sup/res for
Futures ?
[16:06] <bluemonkey_67> I need to hear a yes or
no response from all of you to feel comforatbble going
foward
[16:07] <mikep> yes
[16:07] <bluemonkey_67> I will not cover futures
in much detail no
[16:07] <sunset> Yes or no
[16:07] <abbers> yep
[16:07] <bluemonkey_67> 1. 1. The support and resistance
calls are offered to you in a form that allows you to
take advantage of continued moves in the share prices
of the stocks we identify. You will not get specific buy
and sell trading calls from us, but you will be able to
use these sup/res calls to make decisions. We will discuss
how a little later.
[16:07] <bluemonkey_67> We offer our ideas in the
form of Baskets. We will have strong, weak, and neutral
baskets.
[16:08] <bluemonkey_67> The strong basket suggests
to you that we believe that the stock we identified in
the call is strong relative to the Market and we have
a long bias in the stock. Do not expect us to short a
strong basket stock.
[16:08] <bluemonkey_67> Weak basket stocks are usually
weak in relation to the Market and we have a short bias
in the stock. Do not expect us to buy a stock in our weak
basket.
[16:08] <bluemonkey_67> Neutral basket stocks are
a little trickier. Most of the stocks that we include
in this basket will be very volatile. We will not necessarily
consider the relative strength of the shares but we will
more so watch the consistent pattern of the trading range
to identify opportunities on both sides of the shares.
This means that neutral stocks are open to short and long
positions.
[16:09] <bluemonkey_67> We offer 3 sup, or support
levels and 3 res or resistance levels for each stock that
we identify. The reason is that if a support level breaks
you will have the next support level in line to identify
and vice versa for resistance levels.
[16:09] <bluemonkey_67> These levels will be discussed
later in this chat, but these series of numbers is what
you will use to identify trading opportunities as we suggest
them.
[16:09] <bluemonkey_67> Are there any questions
about this?
[16:09] <Rush> no
[16:09] <mikep> no
[16:10] <Colorado> no
[16:10] <abbers> no
[16:10] <Maven1> no
[16:10] <bluemonkey_67> ok we'll continue
[16:10] <bluemonkey_67> 2. 2. These trading calls
assume that a few principals are recognized.
[16:10] <bluemonkey_67> · The calls are designed
for day trades.
[16:10] <bluemonkey_67> · Price targets must
be established before the trade is made.
[16:10] <bluemonkey_67> · Stop losses must
be used
[16:10] <bluemonkey_67> · Trailing stops
should be used whenever possible.
[16:11] <bluemonkey_67> The theory behind these
calls is to help you identify support and resistance levels
and to help you make educated trades.
[16:11] <bluemonkey_67> Stocks usually stop declining
near support levels so the idea is to either buy a stock
near support levels or to cover a short near support levels.
[16:11] <bluemonkey_67> Resistance levels are usually
near where a stock stops increasing. We want to sell long
positions near resistance levels and short stocks near
resistance levels as well.
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[16:11] <bluemonkey_67> If support levels break
they become resistance levels and if resistance levels
break they become support levels. Please remember this
point.
[16:11] <bluemonkey_67> When we buy a stock we usually
want to buy near support and then target the next resistance
level to close the trade. Remember that if a stock breaks
a support level and then triggers a buy at the next support
level the support level that was broken earlier would
turn into a resistance level and therefore it would be
your target.
[16:13] <bluemonkey_67> The opposite holds true
for short positions obviously.
[16:13] *** mikep has quit IRC (Read error to mikep[modemcable026.129-200-24.mtl.mc.videotron.ca]:
Connection reset by peer)
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[16:13] <bluemonkey_67> We believe in using stop
losses on all trades. We have been advocating $0.2 stop
losses. This is not consistent however. Sometimes we will
have stops very tight if the stocks are near round numbers,
and sometimes it may be impossible to get .2 because the
stock may move too fast, but the idea is to maintain a
near $0.20 average on your stops.
[16:13] <bluemonkey_67> Some people would suggest
that $0.20 is too tight for a stop, but we contend that
if we pick good entry levels for the trades the tight
stop is not only fair but it is important when controlling
our losses.
[16:13] <bluemonkey_67> So as a quick review of
the theory thus far, if we enter a long position we do
it near support, we target resistance, and our stop is
placed .2 or so below the entry level.
[16:13] <bluemonkey_67> Let's say the stock begins
to move aggressively higher though (opposite for shorts)
and you feel it may continue to accelerate. This situation
calls for a trailing stop, or a profit stop.
[16:13] <bluemonkey_67> If you buy a stock between
a round number and .5 (49-49.5 as an example) and if the
stock increases above the next round number (50) we would
identify this as an opportunity to implement a trailing
stop.
[16:13] <bluemonkey_67> We usually wait for the
stock to increase to .25 above that next round number
(50.25) though and our trailing stop would be set at .05
below that next number (49.95).
[16:13] <bluemonkey_67> When using this trailing
stop the stock may pass our original targets, and most
of the time this will be ok with us. We will follow the
stock higher with our stops as the stock breaks additional
round numbers (51, 52, etc) and we will never pull a trailing
stop loss.
[16:14] <bluemonkey_67> Remember, we can always
re-enter a trade so having a couple of stops is ok as
long as they are small. Also understand that we could
have 5 .2 losses and still only be -1. That means that
1 good trade could make up for all the losses and create
some gains as well.
[16:14] <bluemonkey_67> The purpose of all of this
is to create a structure to help you make investment decisions.
This will hopefully make your job as a trader much more
manageable and hopefully your decisions will be more clear.
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[16:14] <bluemonkey_67> Are there any questions
thus far?
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[16:15] <Mikep2> Sorry I was kicked.... Does break
mean move heavily past it?
[16:15] <bluemonkey_67> no break means break
[16:15] <Mikep2> So if it just hovers over it is
that still a break
[16:16] <bluemonkey_67> hovers over it? what is
it?
[16:16] <Mikep2> Lets say res is 45 and it plays
45.10 then drops right away below 45
[16:16] <Mikep2> Do you still consider that a break?
[16:17] <bluemonkey_67> w/re to the call made today,
we will discuss that next
[16:17] <bluemonkey_67> I think it best to wait
for your answer
[16:17] <bluemonkey_67> please ask again if you
don't get it
[16:17] <Mikep2> ok
[16:18] <bluemonkey_67> but the answer is yes it
broke but a little under 55 doesn't trigger a stop unless
you have a trailing stop in place
[16:18] <bluemonkey_67> which you will see later
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[16:18] <bluemonkey_67> are there any other questions?
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[16:19] <abbers> when a trade is triggered do u
buy at market or do you have a limit in the market
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[16:20] <bluemonkey_67> almost always limit abbers
[16:20] <bluemonkey_67> 3. The next section is how
do we use the calls to trade?
[16:20] <bluemonkey_67> Today we issued a call on
EBAY. The calls was:
[16:20] <bluemonkey_67> EBAY
[16:20] <bluemonkey_67> Basket: STRONG
[16:20] <bluemonkey_67> sup1 55.1
[16:20] <bluemonkey_67> sup2 54
[16:20] <bluemonkey_67> sup3 52.62
[16:20] <bluemonkey_67> res1 55.9
[16:20] <bluemonkey_67> res2 56.5
[16:20] <bluemonkey_67> res3 60
[16:20] <bluemonkey_67> Then we added a support
level at 54.6 in EBAY as the day progressed.
[16:20] <bluemonkey_67> These calls generated a
few trades:
[16:20] <bluemonkey_67> The first was a buy of EBAY
as it tested sup1. Our target was res1 and our stop was
near 54.9. We were stopped at 54.85. Net = -.25.
[16:21] <bluemonkey_67> We re-entered the stock
per the call at 54.6, the adjusted sup level. The stock
traded to over 55 and then the Market began to pull back.
Futures started to decrease sharply and we chose to sell
the position to lock in gains. Net was +.38 there.
[16:21] <bluemonkey_67> Then we re-entered the stock
as it broke above 55.1 again. But we were also stopped
in this trade as it broke below 54.9 again. We lost -.27
on this one.
[16:21] <bluemonkey_67> Our net on these trades
was -.14 on these 3 trades.
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[16:21] <bluemonkey_67> Although this example resulted
in a net loss, it is a good one to use to demonstrate
how to trade off of the calls.
[16:21] <bluemonkey_67> In the first trade the trade
was very straight forward. We bought near a support level
and stopped out because it declined. The important thing
is that we kept our stop small though.
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[16:22] <bluemonkey_67> reached 55.25 and then we'd
have entered a trailing stop instead.
[16:22] <bluemonkey_67> The 3rd call required the
use of an additional support level which we called after
the original call. This means that we, as traders, need
to reveiew all of the suggestions and adjustments to thos
suggestions in order to benefit from the calls.
[16:22] <bluemonkey_67> Remember that sup/res levels
can change from time to time throughout a day given price
changes etc. We will always try to keep you abreast of
any changes by adding support or resistance levels to
our calls when/if they are appropriate.
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[16:23] <bluemonkey_67> Are there any questions
about this?
[16:23] <Rush> no
[16:23] <Colorado> How/when do you decide to stop
chasing a stock down?
[16:24] <bluemonkey_67> the way the calls are designed
you have 3 levels of support
[16:24] <bluemonkey_67> when the third one breaks
you stop chasing it
[16:24] <bluemonkey_67> unless it turns up again
[16:24] <abbers> do u place your limit order b4
the stock is triggered ?
[16:24] <Colorado> Do you have a sense of which
level has the highest probability of succeeding?
[16:25] <bluemonkey_67> abbers, buy orders are not
placed prior to the trade, but stop orders almost always
should be
[16:25] <newguy> In your first example, EBAY support
was at 55.10 at what point did you buy?
[16:25] <bluemonkey_67> 55.1
[16:25] <newguy> Did it move down into 55.1...
[16:26] <newTrader> BM, when is a good point to
issue a trade at a support point? should I wait till it
turns up?
[16:26] <bluemonkey_67> it actually diped below
55.1 if you recall
[16:26] <newguy> or up through it?
[16:26] <bluemonkey_67> u want to buy near support
levels
[16:26] <newguy> Where was your decision to buy
made, when it hit 55.1 or say 55.13
[16:26] <bluemonkey_67> this means you have the
risk of the stocks going down
[16:26] <newTrader> when the price turn up, it's
usually a bit too late
[16:26] <abbers> so do u often miss a triggered
call bcos the price has run away from you too quick?
[16:27] <bluemonkey_67> my buy decision is made
when I make the call
[16:27] <newguy> This is where I have the most trouble...
[16:27] <bluemonkey_67> not usually on entries no..but
sometimes on stops yes
[16:27] <abbers> same here
[16:27] <newguy> the stock is dropping toward 55.10...
[16:27] <newTrader> yes
[16:27] <bluemonkey_67> ok, let's cover this point...
[16:27] <newguy> Where do I pull the trigger...
[16:27] <newguy> Do I wait to see if it will bounce
off 55.10...
[16:28] <newguy> Do I wait for it to get near...
[16:28] <bluemonkey_67> Often the calls will actually
hit the number (55.1)
[16:28] <newguy> Do I wait for it to hit
[16:28] <bluemonkey_67> I'd say that has been about
90% of the time
[16:28] <bluemonkey_67> that the calls actually
touch that level
[16:28] <bluemonkey_67> could you buy it there every
time?
[16:28] <bluemonkey_67> that is another question
[16:28] <abbers> no
[16:29] <bluemonkey_67> you need to make a decision
when the stock is triggered, where to buy
[16:29] <bluemonkey_67> or more importantly, what
is the most you would pay
[16:29] <newguy> Blue... part of the problem here,
is that you have a "feel" for the purchase...
[16:29] <bluemonkey_67> this decision can also be
made when the call is made
[16:29] <bluemonkey_67> example re ebay
[16:29] <newguy> I don't, and I need to understand
where to start until I can develop a "feel"
[16:29] <bluemonkey_67> when a stock breaks below
a number like 50, 60, 70
[16:30] <bluemonkey_67> we we tend to think of it
as important
[16:30] <bluemonkey_67> 55, 56, 57 are important
too but less so
[16:30] <bluemonkey_67> but in realizing their importance
we should also realize that we do not want to stop out
unless that level is broken
[16:31] <bluemonkey_67> a confirmation of a break,
as we have noted in the past, is .05 or so
[16:31] <bluemonkey_67> at least that is what we
would like to see to accept that a level like 55 has broken
[16:31] <bluemonkey_67> so with that in mind we'd
want our stop under 54.95 or at 54.95
[16:32] <bluemonkey_67> keeping in mind our .20
stop loss
[16:32] <bluemonkey_67> that would mean we were
willing to buy it up to 55.15
[16:32] <bluemonkey_67> our stop would then be placed
at 54.95 and we'd let it ride
[16:32] <newTrader> do you use 0.2 stop loss for
swing trade?
[16:32] <Rush> Do you automatic stops BM in your
software or do you sit there with your finger on the button?
[16:32] <bluemonkey_67> or if you got 55.1 you lower
it a little
[16:33] <bluemonkey_67> finger on the button usually
for buys
[16:33] <bluemonkey_67> stops usually require in
place orders
[16:33] <bluemonkey_67> Swings, no more loose there
[16:33] <newguy> So as the stock starts to drop
toward 55.10, you've determined that when it hits 55.15
you will buy...
[16:33] <bluemonkey_67> no 55.1
[16:34] <newguy> and you don't wait to see if it
bounces off 55.10?
[16:34] <bluemonkey_67> not usually no
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[16:34] <bluemonkey_67> that would normally be too
late if the support call is right
[16:34] <newguy> I thought you said you were willing
to pay up to 55.15?
[16:34] <bluemonkey_67> but isn't 55.1 better?
[16:34] <bluemonkey_67> you could look at it this
way too
[16:35] <Mikep2> O.K. can we track back to today....
EBAY opened around 44 and shot up to 56.... Do we buy
in at the first sign of 55.10 on its way back down
[16:35] <newguy> Yes, but if it doesn't hit 55.10
then you don't get it
[16:35] <Mikep2> open 54 I mean
[16:35] <bluemonkey_67> your order could be a limit
order to buy at 55.15
[16:35] <bluemonkey_67> and you could buy as it
tests 55.1
[16:35] <bluemonkey_67> mikep the call was not made
at that time so it cannot be backtracked to that time
[16:36] <newguy> So then you are saying it needs
to hit the resistance before you will buy?
[16:36] <bluemonkey_67> if your limit was 55.15
u'd get somewhere between 55.1-55.15 assuming normal mkt
conditions
[16:36] <bluemonkey_67> not always newguy but almost
always yes
[16:37] <bluemonkey_67> it will be good to wait
until you get the feel for things re your entries
[16:37] <bluemonkey_67> let them trigger
[16:37] <bluemonkey_67> sometimes you'll flat miss
it too
[16:37] <bluemonkey_67> it happens
[16:37] <newguy> Ok, another question, do you pay
any attention to general market conditions when determining
a buy...
[16:37] <bluemonkey_67> and when you miss it you
have to revert to the decisions youi make prior to the
test
[16:38] <bluemonkey_67> general mkt, yes, and sells
too
[16:38] <newguy> because by it's very nature, EBay
is falling into resistance
[16:38] <bluemonkey_67> but only extreme conditions
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[16:38] <bluemonkey_67> and I watch the futures
for these signals moreso than the stocks for day trades
once it gets to this point
[16:38] <bluemonkey_67> example:
[16:39] <newguy> For example, EBay is falling to
55.10... do you feel like you're trying to catch a falling
knife...
[16:39] <bluemonkey_67> the decision to buy NVDA
as it broke above the 43.81 level
[16:39] <newguy> or do you buy automatically when
it hits 55.10?
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Connection reset by peer)
[16:39] <bluemonkey_67> was thwarted by the futures
declines and poor mkt conditions it seemed
[16:39] <bluemonkey_67> sure there are times when
the mkt gives you a feel not to do something
[16:40] <bluemonkey_67> but interestingly I have
found that the best choice has normally been to stick
with the calls
[16:40] <bluemonkey_67> NVDA and ebay are good examples
of this today
[16:40] <bluemonkey_67> ebay re the stop
[16:40] <newguy> OK... one more question...
[16:40] <bluemonkey_67> shoot
[16:40] <newguy> We've talked about when to buy
when a stock drops into resistance...
[16:40] <newguy> when do you buy when it breaks
thru resistance?
[16:41] <bluemonkey_67> ah as it breaks support
[16:41] <bluemonkey_67> I look for the resistance
level noted in the call to show up on the bid
[16:41] <newguy> Understand, but breaking support
( Think you mean resistance)...
[16:41] <bluemonkey_67> at least once
[16:41] <bluemonkey_67> yes mean res
[16:42] <newguy> Do you buy as soon as it shows
on the bid once?
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[16:42] <bluemonkey_67> same with the shorting as
support breaks...I want the sup price to be on the offer
[16:42] <bluemonkey_67> usually yes re res breaks
[16:42] <Colorado> and then market order, blue
[16:42] <Colorado> ?
[16:42] <bluemonkey_67> no re mkt order
[16:42] <bluemonkey_67> limit order
[16:43] <bluemonkey_67> same decision as before
needs to be made in advance of the trade
[16:43] <bluemonkey_67> where are you willing to
buy up to?
[16:43] <bluemonkey_67> where would your stop be?
[16:43] <bluemonkey_67> these questions need to
be asked on every trade
[16:43] <newguy> OK, I was kind of balancing things
looking for .05 to .10 over resistance level before I'd
jump
[16:43] <bluemonkey_67> you need to go into the
trades with these in mind
[16:43] <newguy> and then I would lose a few key
points
[16:43] <bluemonkey_67> I like the .05 limit
[16:44] <akadollar> arent the futures a good in
helping weather to decide to buy a stock on the way down
as it touches sup.or to wait and see if sup holds before
u buy??...or short
[16:44] <bluemonkey_67> try to keep it within .05
if you can
[16:44] <newguy> .05 on the last trade, or on the
bid
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[16:44] <bluemonkey_67> futures work well in telling
us quick moves in the market and of course trading ranges
[16:44] <bluemonkey_67> .05 above the res level
in the call
[16:45] <newguy> Right, but the bid is .05 over,
or the last trade?
[16:45] <bluemonkey_67> but futures, unless there
are divers or unless they are popping
[16:45] <bluemonkey_67> do not influence my decisions
about the support or res in a stock
[16:46] <bluemonkey_67> newguy..let's say the res
is 55.1 and the stock was reversing higher from under
55...the idea would be to buy up to 55.15, or .05 above
the stated res call
[16:47] <akadollar> so if futures were breaking
sup and a stock was moveing down fast tward sup..it would
not influance u
[16:47] <bluemonkey_67> if the stock traded last
at 55.13 oh well...your decision was to limit to 55.15
[16:47] <bluemonkey_67> if futures were breaking
sup I'd assume there would also be a diver
[16:47] <bluemonkey_67> yes that would surely make
me hold back
[16:47] <newguy> Ok, but in triggering the break
you would look for .05 above the res level...
[16:48] <newguy> would you look for the last price
to be .05 above...
[16:48] <newguy> or would you look for the bid to
be .05 above?
[16:48] <bluemonkey_67> no, the trigger occurs when
the levels are hit
[16:48] <bluemonkey_67> let's step back newguy
[16:48] <bluemonkey_67> because you are starting
to confuse me more than I am confusing you :-)
[16:48] <newguy> Oh, I see, you are talking about
the .05 limit being when you place the order
[16:48] <akadollar> so understanding futures and
there sup would help make it clearer for newguy maybe
[16:49] <bluemonkey_67> yes I am
[16:49] <bluemonkey_67> ok..
[16:49] <bluemonkey_67> you have to have a buy limit
in mind when using these trading calls
[16:49] <newguy> When you said "I like the
.05 limit" I though you were talking about to trigger
the buy
[16:49] <bluemonkey_67> the limit depends on each
individual cirumstance
[16:50] <newguy> Let me make sure I understand you
now...
[16:50] <bluemonkey_67> no was talking about actual
entry levels
[16:50] <bluemonkey_67> go ahead
[16:50] <newguy> Ebay has a 55.10 resistance level
and it is moving up toward it...
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[16:50] <newguy> when the bid hits 55.10 a buy is
triggered and a limit order is put in for 55.15 is that
it?
[16:51] <bluemonkey_67> yes
[16:51] <bluemonkey_67> if 55.15 is the limit you
choose
[16:51] <newguy> ok, got it <hitting self in
head> thanks
[16:51] <bluemonkey_67> sometimes you may choose
something different depending on share prices and market
conditions
[16:52] <bluemonkey_67> but these are decisions
you make before you trade
[16:52] <bluemonkey_67> so there never should be
any questions about what you are going to do
[16:52] <newguy> and you would basically always
buy when the bid hits your resistance?
[16:52] <bluemonkey_67> u understand that too no?
[16:52] <newguy> yes I understand
[16:52] <bluemonkey_67> unless futures, as aka suggested,
are beginning to fall hard
[16:53] <newguy> got it, ok I'll let someone else
talk for a while <g>
[16:53] <bluemonkey_67> ok, we have 1 more section
to the chat
[16:53] <bluemonkey_67> 4. Where did the numbers
come from?
[16:53] <bluemonkey_67> We derive our numbers from
2 main sources and one secondary source. The first is
our fibonacci calculator and the second is the charts
that we offer though the software.
[16:53] <bluemonkey_67> Fibonacci, follow the link
from the Tools menu option.
[16:53] <bluemonkey_67> EBAY chart: http://www.stocktradersdaily.com/clubsite/images/wpe3.gif
[16:54] <bluemonkey_67> Please open those windows
[16:54] <bluemonkey_67> EBAY's low of the day and
high of the day were 53.28 and 56.1. Please input those
into the fibonacci calculator and let me know when you
are finished. I will wait.
[16:54] <Rush> Done
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[16:56] <bluemonkey_67> having trouble guys?
[16:56] <Colorado> Done
[16:56] <abbers> done
[16:56] <newTrader> BM, so you use last day's high/low
to get todays call numbers?
[16:56] <LK> done
[16:56] <bluemonkey_67> no today's only
[16:57] <Maven1> is it upe3.cgidone
[16:57] <Maven1> done sorry
[16:57] <newguy> done
[16:57] <newTrader> so use the data of the first
15-30 minutes?
[16:57] <bluemonkey_67> sometimes yes
[16:57] <bluemonkey_67> Sup1 was called at 55.1
because the charts at the time suggested that 55.1 would
be support. Sup2 was called at 54 instead of 53.97 because
we believe 54, being a round number, is more psychologically
important and they are close enough to make little difference.
Sup3 was called at the next fib support level.\
[16:58] <bluemonkey_67> Res1 was offered by the
charts at the time. Res2 was derived from the fib level
because the charts did not offer it, and the 3rd level
of resistance at 60 was offered because of the pshychological
importance of $60 and the fact that the next level of
fib support was very far away from the res2 level.
[16:58] <bluemonkey_67> As EBAY traded we noted
chart support at 54.6 and then we added the 54.6 support
range to the call.
[16:58] <bluemonkey_67> In establishing sup/res
levels we always use a combination of fibonacci numbers,
chart indications, and psychological levels to help us
determine the numbers.
[16:58] <bluemonkey_67> There is not a cookie cutter
method of doing this because there are dynamics in every
call that are unique, but the charts, fib numbers, and
simple psychological interpretations should help you to
do this.
[16:58] <bluemonkey_67> Are there any questions
about this?
[16:59] <akadollar> how do u find res in the first
30 minute of the day using only that days chart..must
be kinda tricky
[16:59] <bluemonkey_67> it is tricky sometimes yes...
[16:59] <Colorado> BM, I've noticed often that TD's
numbers are "tighter". Can you comment?
[16:59] <bluemonkey_67> fib tends to help in the
morning
[17:00] <bluemonkey_67> no re TD's numbers...I have
never compared them
[17:00] <newguy> I don't see where you get the 55.10
level from the chart
[17:01] <bluemonkey_67> look at the 8:00 a.m. dip
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[17:01] <newguy> I see it, but why that dip as opposed
to the one at 9:30
[17:01] <bluemonkey_67> if I recall the call was
made shortly after 9:00
[17:01] <newguy> ok
[17:01] <bluemonkey_67> but ur right, it broke
[17:02] <bluemonkey_67> as the day progressed we
saw another sup level right?
[17:02] <bluemonkey_67> 54.6
[17:02] <newguy> So you're basically looking for
the bottom of the chart after a decline?
[17:03] <bluemonkey_67> it is not as easy as that
sometimes but this chart is basic enough to say yes to
your question
[17:03] <bluemonkey_67> I want to see where the
stocks stops falling
[17:03] <Maven1> blue, are we to use the calls or
the charts when trading (or both)
[17:03] <bluemonkey_67> and I'd like to see that
level tested too
[17:04] <bluemonkey_67> I use the charts to develop
the calls but you need to make sure you understand where
and why the calls was made
[17:04] <newguy> It would seem to me that good support
also developed at 54.8, or was that too late in the day
[17:04] <bluemonkey_67> ur rioght in that too but
when we made the call 54.6 was that new support level
[17:05] <bluemonkey_67> and in looking at the stock
I'd choose 54.6 over 54.8 even late in the day
[17:05] <newguy> because it is lower?
[17:05] <bluemonkey_67> simply because they were
so close and because if I were stopped at 54.6, a support
level, after entering at 54.8, I'd slap myself with a
large trout
[17:05] <bluemonkey_67> especially if it reversed
up
[17:05] <newguy> gotcha
[17:05] <bluemonkey_67> not the .2 diff
[17:05] <Maven1> Another way of asking the newguy's
question is to ask how far beyond the chart at the moment
you are looking at it does the chart apply?
[17:06] <bluemonkey_67> I look at the 2 hour chart
more closely than the all day chart but I view both of
them
[17:07] <newguy> The software defaults to one hour
charts, should I change that to 2
[17:07] <akadollar> dont u do the same thing as
u said above to find fut sup and res BM
[17:07] <bluemonkey_67> yes you can change them
as you need to newguy, just right click it and adjust
the period
[17:07] <bluemonkey_67> ahh are you talking about
futures aka?
[17:08] <Maven1> Do you always use the one minute
period?
[17:08] <newTrader> BM, do you use line charts or
candlestick?
[17:08] <bluemonkey_67> candlestick
[17:09] <bluemonkey_67> frequency is set at 1 minute
yes
[17:09] <bluemonkey_67> period changes from 2 hour
to all day frequently
[17:10] <Maven1> Is there a reason you don't watch
ticks?
[17:10] <bluemonkey_67> ticks as in level2?
[17:10] <Maven1> yes (or other programs)
[17:10] <akadollar> ok sorry i was still just wondering
how stock su/res can be found and be used for gambeling
with our money and future res/sup candt be idenafied..i
must just be me today
[17:11] <bluemonkey_67> futures, maybe TD will have
a short ed chat on how he does it
[17:12] <bluemonkey_67> I have always been fine
at the trends re futures but I have always had trouble
identifying breakout res levels
[17:12] <bluemonkey_67> same for sup levels on breakdowns
[17:12] <bluemonkey_67> level2 is pretty darn useful
[17:12] <bluemonkey_67> admittedly I have not been
using it often lately
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[17:12] <akadollar> yes i need to know the diferance..becouse
ive ben finding future and stock sup the same way..go
figure
[17:12] <bluemonkey_67> but when you are making
your decisisons to buy
[17:12] <bluemonkey_67> or short
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[17:13] <bluemonkey_67> level 2 can tell you where
the buyers and seelers are and it could be enough to help
you make a decision to wait tio buy or rush to buy a stock
[17:14] <bluemonkey_67> note the fib calculator
does not work for the futures
[17:14] <newguy> Maybe we could schedule a level
2 ed chat for sometime soon?
[17:14] <bluemonkey_67> we have a level2 chat in
the archive that you can review tonight newguy
[17:14] <newguy> Thanks
[17:14] <newguy> Think I read it
[17:15] <bluemonkey_67> are there any other questions?
[17:15] <newguy> Is there any value to a level 2
screen that doesn't show the market makers (such as the
island screen)
[17:15] <Rush> That's a 1.5 screen
[17:15] <bluemonkey_67> level 1.5 is what we have
in the software
[17:16] <bluemonkey_67> it shows 3 MMs
[17:16] <bluemonkey_67> but it doesn't have some
of the big boys
[17:16] <bluemonkey_67> and that leaves a big piece
of the puzzle empty
[17:16] <newguy> That's what I mean
[17:16] <bluemonkey_67> it is useful but not the
complete picture
[17:17] <bluemonkey_67> level 2 is worth the dinero
if you are having problems with the entry levels of stockas
tho
[17:17] <Mikep2> Gotta go.... But thanks for the
ed chat..
[17:17] <bluemonkey_67> no problem
[17:17] <bluemonkey_67> we took much longer than
normal today
[17:17] <newguy> sorry<g>
[17:17] <bluemonkey_67> I'll stick around for questions
[17:17] <bluemonkey_67> if anyone needs to go I
understand
[17:17] <Colorado> Gotta pick up the little one,
blue, thnx.
[17:17] <abbers> how do u pick the stocks for the
baskets
[17:18] <bluemonkey_67> I usually look for a combination
of news, price movements, and analysts comments
[17:18] <Maven1> I will re-read the discussion to
confirm entry/exit points based on sup/res
[17:19] <abbers> does volume ever play a part?
[17:19] <asia> Thank you BM
[17:19] <Maven1> Did you discuss how you pick which
stocks to put in the baskets?
[17:19] <bluemonkey_67> really, most news has been
so light that analyst comments and price moves have been
more important
[17:19] <bluemonkey_67> np asia
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[17:19] <bluemonkey_67> talking about that now
[17:19] <bluemonkey_67> I am referring to pre mkt
baskets by the way
[17:19] <bluemonkey_67> after the opening bell many
things change
[17:20] <bluemonkey_67> when the mkt opens you can
see where the buyers are
[17:20] <bluemonkey_67> and the sellers
[17:20] <bluemonkey_67> you know what stocks are
strong by simple price moves usually
[17:20] <bluemonkey_67> again, u need to keep abreast
of news
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[17:20] <abbers> some stocks u pick have wide spreads
and low volume, i fine these hard to trade and often get
shaken out (whipsawed)
[17:21] <bluemonkey_67> like gnss?
[17:21] <abbers> yes
[17:21] <bluemonkey_67> I normally never trade those
types but I have lately
[17:21] <abbers> should we not leave these out
[17:21] <bluemonkey_67> I usually trade the ebay
types
[17:21] <bluemonkey_67> more volume types
[17:21] <abbers> its very fustrating
[17:21] <Maven1> Comments from participants often
say "here come buyers" Is that from Level II?
[17:21] <bluemonkey_67> but NVDA got me hooked to
these types
[17:22] <bluemonkey_67> the diff is that our stops
need to be wider
[17:22] <abbers> since split its not too bad
[17:22] <bluemonkey_67> ex, I had a .3 stop in gnss
today
[17:22] <bluemonkey_67> true re nvda
[17:22] <bluemonkey_67> maybe re level 2, but also
the software shows you net buys and sell
[17:22] <Maven1> Do you ever watch IBD site that
lists the 6 companies with greatest increase in volume
and stock price up or down?
[17:22] <bluemonkey_67> in the trend box
[17:23] <bluemonkey_67> not often re IBD
[17:23] <Rush> Cybertrader offers that in it's tool
set. Very useful.
[17:24] <bluemonkey_67> I will look into it
[17:24] <Maven1> If you want to glance at some look
at CTEC, AGM, SRZ, LH, HRH, DP, BRO, PRX OR DGX TODAY
[17:25] <bluemonkey_67> ok
[17:25] <newguy> Blue...
[17:25] <bluemonkey_67> Are there any more questions?
[17:25] <newguy> Yes
[17:25] <Maven1> Rush, do they offer the IBD ratings
in Cybertrader?
[17:25] <Rush> No
[17:25] <newguy> I thought the trend box showed
the bid or ask going up or down?
[17:26] <bluemonkey_67> trend box shows the trades
[17:26] <Rush> That's exclusive newguy.
[17:27] <newguy> Can you elaborate?
[17:27] <bluemonkey_67> red lines = sells and green
lines = buys
[17:27] <bluemonkey_67> dark red = large sales and
dark greens = large buys
[17:27] <Rush> The IBD ranking system is exclusive
to IBD. You won't find it in Cybertrader.
[17:27] <newguy> That was not my understanding
[17:27] <Maven1> OK
[17:28] <Rush> Then perhaps we are speaking of different
things.
[17:28] <sunset> Blue - one question please
[17:28] <bluemonkey_67> shoot
[17:28] <sunset> You have stated that "you
know what stock is strong by simple price move" explain
that in detail and example, please
[17:29] <bluemonkey_67> you can watch a stock and
you can see strong price moves with consistant buying
[17:29] <bluemonkey_67> the stock will have support
on any dips and it will react very well to futures increases
[17:30] <bluemonkey_67> at the same time when the
futures decline it will be less apt to fall
[17:30] <bluemonkey_67> this was seen in ebay late
in the day
[17:30] <sunset> How many stocks are on your radar
screen?
[17:31] <bluemonkey_67> there are 22 stocks on my
screen all day, about 60 stocks in total if I scroll down
tho
[17:32] <bluemonkey_67> I adjust the portfolio so
that the stock I call are at the top of course
[17:32] <Rush> newguy, this is what I'm speaking
of: Exclusive research extracted from the O'Neil database
includes IBD SmartSelect® Corporate Ratings.
[17:32] <newguy> Blue...
[17:32] <newguy> Here is from the help file for
software...
[17:32] <newguy> Quote Trend: Ten color coded bars
that indicate the direction of the latest quotes. Each
bar denotes a bid, ask or both. The latest bar is added
to the right as the trend scrolls to the left:
[17:32] <newguy> If either the bid or the ask price
is up, a GREEN bar is added.
[17:32] <newguy> If either the bid or the ask price
is down, a RED bar is added.
[17:32] <newguy> If the bid price is up and the
ask price is down, the top half of the bar is GREEN and
the bottom half is RED.
[17:33] <newguy> If the bid price is down and the
ask price is up, the top half of the bar is RED, and the
bottom half is GREEN.
[17:33] <newguy> If both the bid and ask prices
are up, a bright GREEN bar is added.
[17:33] <newguy> If both the bid and ask prices
are down, a bright RED bar is added.
[17:33] <bluemonkey_67> hmmm I will contact them,
they told me it was bys and sells
[17:33] <sunset> What are the name of the 22 stocks
on yur screen, are they constant or changing day-by-day?
[17:34] <newguy> Please let me know what you find
out
[17:34] <bluemonkey_67> sometimes I see many greens
on my trend, or reds, and the price doesn't change much
[17:34] <bluemonkey_67> I will ask them
[17:34] <bluemonkey_67> and let you know
[17:34] <Maven1> Suggestion for software: put a
field in for stock symbol so when you print it out you
can see what stock it was for.
[17:34] <bluemonkey_67> do you really want me to
list the stocks sunset?
[17:34] <newguy> It probably indirectly indicates
buyers coming in anyway
[17:34] <sunset> Yes, please
[17:34] <bluemonkey_67> nvda
[17:35] <bluemonkey_67> gnss
[17:35] <bluemonkey_67> ebay
[17:35] <bluemonkey_67> qlgc
[17:35] <bluemonkey_67> klac
[17:35] <bluemonkey_67> brcm
[17:35] <bluemonkey_67> chkp
[17:35] <bluemonkey_67> vrsn
[17:35] <bluemonkey_67> brcd
[17:35] <bluemonkey_67> psft
[17:35] <bluemonkey_67> qqq
[17:35] <bluemonkey_67> qcom
[17:35] <bluemonkey_67> emlx
[17:35] <bluemonkey_67> sebl
[17:35] <bluemonkey_67> vrts
[17:35] <bluemonkey_67> nvls
[17:35] <bluemonkey_67> bgen
[17:35] <bluemonkey_67> rfmd
[17:35] <bluemonkey_67> medi
[17:35] <bluemonkey_67> pdli
[17:35] <bluemonkey_67> visg
[17:35] <bluemonkey_67> pmcs
[17:35] <bluemonkey_67> others of course
[17:36] <bluemonkey_67> there are the first 20 or
so
[17:36] <bluemonkey_67> I rarely add a stock
[17:36] <bluemonkey_67> I added VISG but never traded
it
[17:36] <Rush> Ah.. ok.
[17:36] <bluemonkey_67> I like keeping the list
consistant
[17:36] <bluemonkey_67> names I know, stocks I'm
familiar with
[17:36] <sunset> thank you. very concentrate in
one sector blue.
[17:36] <newguy> How do you get the stocks in a
particular order, they always default to alphabetical
for me
[17:37] <bluemonkey_67> right click on the top of
the symbols list where it says symbol and take off sorting
[17:37] <newguy> ahh thanks
[17:37] <bluemonkey_67> then go to edit portfolios
and change them
[17:37] <bluemonkey_67> up/down
[17:38] <bluemonkey_67> anything else guys?
[17:38] <newguy> I usually just keep an active portfolio
and change it each day...
[17:38] <sunset> blue. How did you do today?
[17:38] <newguy> I keep the full portfolio updating
each day though
[17:38] <bluemonkey_67> -1 today...missed early
gains as u know
[17:38] <bluemonkey_67> good luck guys
[17:38] <abbers> ok thanks for the ed. chat blue...i
will try and see if i can adapt what you told me to tomorrows
trades...thanks
[17:38] <bluemonkey_67> I need to go for a run
[17:38] <newguy> Thanks for the chat Blue
[17:39] <abbers> one more thing blue
[17:39] <sunset> Do yu trade with yur fund as other
people of do you papertrade?
[17:39] <bluemonkey_67> You guys keep me on my toes
[17:39] <sunset> When you do papertrade, do you
let people in th chatroom know?
[17:39] <Maven1> Thanks!
[17:39] <bluemonkey_67> and keep asking questions
[17:39] <abbers> could u pls keep sending the daily
trades recap, i find this very usefull indeed
[17:39] <bluemonkey_67> yes sunset I let people
know
[17:39] <bluemonkey_67> Yes abbers I will try to
do that
[17:39] <bluemonkey_67> as often as possible
[17:40] <sunset> Thank you blue. It is very kind
of you to conduct this chat.
[17:40] <bluemonkey_67> you won't get one for today
though :-)
[17:40] <bluemonkey_67> my pleasure...
[17:40] <bluemonkey_67> we can do this every week
if you guys want
[17:40] <speedy> New biotech flipper: AXYX
[17:40] <bluemonkey_67> let me know the topic of
choice
[17:40] <bluemonkey_67> see ya'll maniana
[17:40] <Rush> Thanks BM. Archive is on the way.
[17:40] <abbers> ok thanks bm
[17:40] <LK> thanks BM
[17:40] <bluemonkey_67> thx rush
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