Fixed Rule on a Random Market

June 14, 2019

Look at the chart. (Lets study it. Plot tayo alma on a 3 or 5 min tf. Una wala sya gaanong volume. Then all of a sudden nagkaroon at nabreak nya alma. Candle stayed above alma so dun ang entry if early mo to nakita si CYBR. This is a daytrade btw. So yan first entry ng mga early nakakita. Then nabreak si alma at nagstay below so that’s where you exit. Nabreak nya si alma but di sya tumuloy baba or bumulusok baba. Lumalaban ang buyers. So lumalaki volume meaning yung pagbreak sa alma was just a healthy pullback. So we wait ulit na mabreak alma at magplace ng buy order. So nbreak nga si alma at ngstay above alma yung candle so it is where we buy. Second entry ng mga maaga nkakita knina. First entry ng mga late na nkpansin ky CYBR. Then pgbreak sa alma ulit dun na tayo benta and call it a day.)

I did not trade cybr kanina but if I did it would sure look like this. Now as I was explaining this trade kanina may ngmention ng certain rules. Meron daw rule na pag ang stock umangat 20% at ngstay dun by lunchbreak malaki chance magceiling sa hapon. If naman daw umangat 20% at bumagsak by lunch break mabubuhusan. Meron din rule na. Well eto medyu sikat. Sa breakout. Kapag ngclose ang candle above 50% ng breakout meaning nun mgcocontinue taas ang price next trading days at kapag naman ngclose below 50% ng candle e failed breakout. Meron din 52 week rule on friday. Medyu limot ko na but parang pag ang stock ngclose sa 52 week high sa friday mgcocontinue yan by monday at tues bentahan. Meron din ceiling trades. Second ceiling day usually magandang exit. Meron din perfect fibo level. Dun daw lagi nagbobounce ang stock.
Ok, I acknowledge na this “rules” were made dahil sa madalas naoobserve but I do believe na random ang market. So using fixed rules sa trading pag random market dindeal mo is not so smart. Of course you will react. Kasi most sa inyo nakuha nyo ideas nyo sa trading galing sa books or sa net but hear me out for a minute. Focus tayo sa pse. When I say random ang market ano ba yun? Ganito. On a single stock there are thousands of traders with different opinion of where the stock would go or what yung tamang price ng stock should be at any given time. How can that result on anything except random diba?

So balik tayo sa fixed rules. Ok, pag 20% day akyat until lunch e malaki chance mag ceiling. Ok lets say na by lunch time si CYBR eh 50% na. After lunch ganun pa rin at dumami na bids. By closing nagbuhos si wealthsec at atr at ngdomino effect down to 5% na lang si CYBR. Let’s just say na nabaliw trader ng wealthsec at ngbuhos. Ok, so the fixed rule was broken. It did not work. Let us say naman mahaba conso ni TUGS at ngbreak out. Ngclose ang candle below half or 50% so failed breakout at napa exit ka only to find out na kinabukasan namili ng namili col kaya umangat ulit. So di nangyare yung expected mo na failed breakout. Ok sa fibo naman. Me golden ratio. Dun na level string chance magbounce. Well ok, sa fibo kasi dapat naiintindihan mo na these levels are just support at resistance levels. Kahit ignore mo na numbers just bank on the idea na kapag di binutas ang support or umupo lang sa support at paakyat next candle its an entry or dun ang entry with a cutloss point one or two flucs below support ksi para masira yung analysis mo na mgbobounce sya e dapat butasin nya support para mgcut ka. Kaya one or two flucs below support ang cut if bumili ka near support na umaasa ka magbounce. Why doon cut mo?ksi pg binasag nya support meaning di talaga magbobounce. Ok next topic na lang nga yan. Next lesson. So ok, im writing as I think lang ha. Ok so 52 week rule on a friday. Let’s say by lunes nagbentahan for some reason. Ok parang ang haba nan Gets nyo na din cguro examples ko. So if panget fixed rules sa random market ano best gamitin? Ok eto. Find indicators na sumusunod sa price. Madami yan. Ema, alligator, ma, etc. Let’s just take ALMA for example. Blik natin sa CYBR na 50% buong araw at near close ngbuhos si wealthsec. Ano man mangyare babasagin at babasagin muna ng candle o ng price si alma if may nagsell down. It dont matter if ng come true fix rule or not. As long as malakas yung stock di nya mabbreak alma support. Dun naman sa breakout na pag 50% above ang close e magcocontinue at pg below 50% eh failed breakout if gamit mo alma its either mghold alma or mbreak. Yun lang ksimple. Ok, so since random at ever changing prices at si market try to find tools na di fixed at nakakasabay o ngrereact sa galaw ng market. I know I know marami mgdidisagree syempre iba turo sa inyo at iba kinamulatan nyo but try to ponder upon this idea lang. You may use it. You may not. I just want to share. Thank u.