Forum Archive Index - June 2001

[jerrold poh <pohj@ihug.co.nz>]

see this .. this is me with my foot in my mouth :).  anyway ... 

the reason why i said that the chart wasn't quite clear was because this
one didn't really look like a definate up / down trend like the last few
charts that you were sending to the list .. like, i can see the down
trend, but in the last section  ... it looked like it could go either
way ..  i guess this is what you ment by risk tollerence.  

the thing that really amazes me is that the tops of the graph always
seem to be sitting on the trend line, and even more amazing that that
huge drop at the very end happend just before it nearly crossed the
trend line ..  it's like magic :).  



jerrold.


On Fri, Jun 22, 2001 at 07:45:38PM -0700, Phaedrus wrote:
> Jerrold,
>          I was surprised that you found the TLS chart to be unclear. I
>          purposely put hardly anything on it (only one trend-line and
>          two support levels) to avoid clutter, and make it easy to see
>          the down-trend. 

>   "When is it safe to buy again?"   That would depend on the
>   individual, their trading system and their risk tolerance. The
>   safest entry would be after the current trendline has been broken,
>   and when a new up trend had developed (higher highs and higher
>   lows). This would suit a very conservative long-term holder.
>   Slightly less safe would be simply after the trendline has been
>   broken. If you were a short/medium term trader, you could have been
>   trading the swings all the way down, (5 trades in 18 months) using
>   oscillators for Buy/Sell signals. If so, you would have bought again
>   yesterday. The swings are plotted in Blue. If you were an active
>   short-term trader, you would be trading the fluctuations between the
>   swing chart turning points, using a short-term indicator such as the
>   Stochastic oscillator. Day-traders use the shortest timeframe of
>   all. Whatever the timeframe, buying a stock in a long-term downtrend
>   is always more risky than buying one in a long-term uptrend.

>   The uptrend you saw in October would have been quite tradeable, so
>   long as you were using suitable indicators. 

>   I am disappointed that you had not noticed that the charts do use a
>   logarithmic Y axis. See how the distance between 550 and 600 is much
>   greater than the distance between 900 and 950. This means that equal
>   percentage changes are of the same magnitude regardless of the level
>   at which they occur.
>
>        Phaedrus


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