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Dead Cat Bounce!

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Super Contributor
What do you mean by trading the price? Then whats the purpose of technicals?
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Not applicable
it means the price is the only truth. Don't try to seek reasons, or pre-empt bounces vs corrections. Ignore the noise and trade the truth
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Valued Contributor
hali, lets for a moment agree that price is the only truth in the market and hence all that matters (and this is my belief and how I trade) .. one must then be very careful of TA as it is merely a mathematical derivative of price and actually take us away from price and as such the truth .. so less TA is better TA ..

hence my lazy system uses only 3 EMAs while momentum uses only price
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Super Contributor
Whatever works!
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Super Contributor
So Simon lets use a practical example, lets take AGL.. how do you trade it currently by trading the price? Because its volatile and erratic and also everyday is a major gap between opening and closing prices..
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Valued Contributor
I don't think one can trade AGL right now .. it a lottery
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Super Contributor
I think theres a lot we can all learn from you btw..
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Not applicable
that is not true - it has been trending beautifully for almost 2 years if you were short. I you are silly enough to think you can make money day trading it - then sure, not possible. But nobody can make money day trading stocks on the JSE. But simple mathematics, average true range and money management makes trading AGL a breeze.
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Super Contributor
When trading the price, one has to have a "reference price": otherwise the price right now means nothing. So , how do you work out your reference price?
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Super Contributor
That's what I am trying to figure out, how is this concept applied in a practical sense. If AGL is R100 how do you know its cheap/expensive based on what measuring standard? With technicals..yes it could be wrong but you have a trend etc that you can use to predict
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Super Contributor
Ya, learn what not to do. My Mentor is John F Carter and in this forum, Kwagga and Barry ranks very high on my list...
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Valued Contributor
reference price is what it was, is it goign higher = buy .. lower = short
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Super Contributor
True that Rams. Price on its own means nothing.
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Valued Contributor
cheap / expensive is a fundamental concept, has no place in trading
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Valued Contributor
no it means everything, in totality .. only thing that is true and matters .. look at the peoples going long KIO all the way from r300, ditto AGL etc.
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Super Contributor
so then for KIO, R300 is the reference price, its a short from R300 but if your reference is R25 (a month ago) then its a long.
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Super Contributor
so then for BIL, R220 is the reference price, its a short from R350 but if your reference is R135 (a week ago) then its a long.
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Super Contributor
Dont confuse trading with investing.
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Super Contributor
price has the similar property for trading and investing.Everything is discounted in the price.
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Super Contributor
yes, thats the point, its about what you want to do with the price, sell it or buy it. You could do both, sell if trading and buy if investing.
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