6th September 2008, 10:59 PM
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Member
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Join Date: Aug 2008
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Re: www.lbrgroup.com
I just enjoyed reading one of her interviews:
www.lbrgroup.com/images///raschke0204.pdf
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When you're scalping, you have to remember the shorter the time frame, the higher the noise level," she says. "And the higher the noise level, the more back-and-fill the market will have and the greater the odds that if you're trailing a stop, your stop will be hit. So for scalp trades, I don't use trailing stops and I exit in one piece.
"You have to recognize how much edge you're giving up just by having the bid-ask," she continues "You'll always do
best when you're scalping if you're more conscientious about initial trade entry. It's important to try to buy on the bid and
sell on the offer more than 50 percent of the time. That might mean you buy on the bid when you enter and you exit at the market, or vice versa."
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An extremely volatile selling climax will mess up the readings on the first reaction. In general, bull and bear flags (short-term consolidations that typically lead to a continuation of the preceding uptrend or downtrend, respectively) work in normal market conditions. But a bear flag, for example, will fail after a volatility extreme like a V-spike reversal because the market will likely make a spike and ledge (move horizontally) instead of making a good retest back down. So, shorting the reaction after a V-spike reversal is a sucker's play. Flags will also fail when there's no volatility.
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A trend day opens on one end of its range and closes on the opposite end, has range expansion, and makes a steady pattern of higher highs and higher lows, or vice versa, throughout the day. In th index futures, there are two or three trend days a month. Trend days are typically followed by consolidation days, which are tradingrange days during which the market
tests back and forth.
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"As you progress, trading increasingly comes down to limiting unforced errors."
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"Forget about making money, just get proficient at execution," she says. "Because when you start, you can be nervous and you can freeze up. And with practice, the emotions that accompany trading subside."
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Regards,
Nikhil
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