Maximum Acceptable Loss
Check every trade
to ensure that it is within your
maximum acceptable loss.
Reconcile your trading style to the maximum %
loss that you are prepared to take on a trade.
Otherwise you will seldom find trades that fit your
August 22, 2002
These extracts from my daily trading diary are
intended to illustrate the techniques used in short-term trading
and should not be interpreted as investment advice. Full terms
and conditions can be found at Terms
of Use .
The Dow broke through resistance at 9000 to close up 1% at 9053
on lower volume. The primary cycle is in a down-trend.
The Nasdaq Composite climbed 1% to close at 1422. The primary
cycle is in a down-trend.
The broader S&P 500 gained the most, rising 1.4% to close
at 962. The primary cycle is in a down-trend.
The Chartcraft NYSE Bullish % Indicator bull
alert signal is at 42% (August 21).
An analyst upgrade of Microsoft helped the Dow rally above 9000
in the last hour of trading. (more)
The All Ordinaries held on to early gains, closing up 29 points
at 3143 on stronger volume.
The primary cycle trends down.
The Stochastic (20,3,3) and MACD (26,12,9) are above their signal
lines, although the Stochastic is threatening to cross. Twiggs
money flow signals accumulation.
AMP Limited [AMP]
AMP has shelved a $ 400 million share buy-back and will raise $
750 million of new equity, to rescue it's capital base.
AMP is in a stage 4 decline with falling relative strength (price
ratio: xao) and weak MACD. Twiggs money flow shows a bullish
Resmed Inc [RMD]
RMD has formed a stage 1 base. The
150-day moving average is leveling out and relative strength
(price ratio: xao) is below zero but rising. Twiggs money flow
shows a bullish divergence.
MACD also has a bullish divergence.
Short-term: Long if stops can be placed close to the entry point.
Slow Stochastic and MACD are above their respective signal lines.
Medium-term: Wait for the All Ords to signal a reversal.
Long-term: Wait for a bull-trend on the Nasdaq or S&P 500
Thought for the Day:
teaches you to recognize a mistake
when you have made it again.
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