iCharts Discussions

[pradeepgolfer]

You may be wondering how to spot higher highs and higher lows.Do not search for exact definitions:markets are not perfect and they often are highly emotional which makes for very confusing structure.Operators take advantage of illiquid periods to influence or manufacture wild volatility which will confuse indicators, trigger stops and break high or lows by minor amounts.Experience will show you when to recognise these false but dramatic moves.However remember that to maufacture such gyrations the operator has to incur a cost.Which is why such moves will break important levels by minor amounts only,in order to to trap trigger happy or emotional or nervous traders.The important thing is to observe if you can a recognise a broad uni-directional movement.That is the first thing to do.If there is such a structure look more closely and see if you can find some hh and hl s. These also need not be perfect-it can be violated by 3-4 ticks.Some stocks are more well behaved than others.Natural gas is not behaved at all and it requires huge stops.If you can see a trend then locate the stop.I say locate the stop, not decide the stop because the stop has to be below a point to be decided by market structure and not by what amount you want to lose or risk. If the risk is too high or clarity is not there do not trade

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