Tuesday - 25 March 2008
Yesterday the market open at 3415 and closed at 3340. The highest was at 3541 and the lowest was at 3328.
If you look at my forecast yesterday ( #2), the market did go up and later fell down passing by the opening level except that it did not end a white bar and the break away level that I predicted (3470 to 3490 ) did not materialise. In fact after breaking these level , the market went up further and after reaching 3505, it fell to the level at 3452.Later it moved up again to the highest level of the day before retracing down again almost to lowest of the day . In day trading, what you are interested is in making profits ( sometimes big and sometimes small) as fast possible and later you just simply leave the market. You can do this 2 or 3 times a day.
In theory, if you had put a buy after 3490 ( expecting the market to go up further - just like my forecast ) you would still manage to make profits but in practise , you might end up losing money unless if your stop loss point is big. Besides that there were clear formation of 3 tops ( actually 4 tops ) after 11.00 a.m., a false one after 3.30p.m and another clear formation of 3 tops ( many tops ?) after 5.00 p.m.
This morning I found that there were some mistakes with my graphs and charts ( I am not making any execuses ) so I decided not to make any forecasting today. To small investors, if you are not ready to put a stop loss of between 20 to 40 points then it is better to stay away from the market. There are still days ahead where you can make profits ( even though it may not be a big one). Making small profits will make you stay longer in the market and be able to learn the market better rather than making big profits and later on you are phased ( spelling?)out without any trace.
Have a nice trading day