FL's talk on how to use the 9-day
transcribed from voice chat given on 2/16/2005
Ok, I just posted a simple chart. [chart FL63.png] Let's just concentrate on the bottom blue line for a moment. What you're looking at here is something to determine the trend. It couldn't be simpler. What the blue line is (which changes color when it goes backwards, but basically the [dark] blue line) is nothing more than an exponential moving average of 9 days, which is basically 1215 periods on the 3-minute. Guess what? If we're above the 9-day, think of it as a green light to play the long side. If we're above the 9-day (1215 3-minute periods), use it as a green light to go long. If we're below it, use it as a red light to go short. It couldn't be simpler.
Let me post something a little bit different. [chart FL64.png] OK, now you'll notice 2 other lines there. Let's pay attention to the bluish line. The bluish line is a 2-day average, which is 270 periods [on the 3-minute chart]. Forget about the green one for a second. So very simply, the first rule is if you're above the 9-day average (and you can call it the 1215 period average), let's just worry about playing the long side. Don't even think about the short side. Now if you're above the 2-day average (which is 270 periods), the light blue one, you're going to be playing hit and run. You're better off buying into a little dip over there and kicking it out. What is a dip? What I've got over there is a parabolic stop, 20/2. You can use whatever the heck you want. It doesn't make too much difference. So when that goes negative in a downwave, guess what? I'm ready to be a buyer. Goes back into an upwave, thank you very much, I'm going to sell you out. So it's a trading mechanism, which (and I don't want to get too deeply into it) combines with the campaigning and the other stuff. So basically, if you're above the 9-day average let's play the long side. If you're above the 2-day average, you're basically playing hit and run. Ah, but now we have something else that occurs, interestingly. What happens when we go below the 2-day but we're still above the 9-day average as you can see a few days ago when we were down around the 94-95.50 area. To buy the dips down there is not the best thing to do, because that could be a turning point. As you can see, from time to time that works.
Now what is this going to miss? What are you going to be giving up? Yes, at some point you're going to be way extended to the upside, and it's going to come crashing down. You may take a couple of small losses on the way down, but if you're playing it properly you will never go short, because that's not a place to go short. Because you set up your simple rule, Oh! I'm above the 9-day, therefore my rule is play the long side. If I'm below the 9-day my rule is to play the short side. If I'm above the 9-day and above the 2-day, then let's just play kind of hit and run and see what the market does. If I'm above the 9-day and below the 2-day, Oh! That's the place to put on a position where I've got a chance for a bigger run. So the idea is you want to wait for a little bit of a consolidation, a little bit of a pullback, going below the 2-day, getting some sort of a bottoming signal, put your position on, put your stops in. Risk control is always, always, always there. Without getting too fancy into the campaigning, but that's something that you want to expect a little bit more of a move out of. Any questions?
Trumbull: Yes, could you just go over how you play the green line? I didn't catch that.
This can get you into a little trouble, but what I use the green line for, if the green line, which is the 1-day, is going below the 2-day, if I want to play the short side, I will sell into rallies. I know this is getting a little bit of a conflict, because sometimes you'll get a bottoming formation like we did a few days back, so that can be a little bit confusing so that almost requires a different dimension. So for this exercise let's forget about the green line for the time being, because that's another dimension of trading. It's another game within the game. You've got to remember that trading is more than playing 3-dimensional chess. If you can learn to play 3-dimensional chess, then you can play many dimensions in trading. But forget about the green line, that's the least of your problems at this point. Just remember the following. Above the 9-day, green light to play the long side. Above the 2-day, which is the light blue line, it's OK to buy the dips. If you want to buy the dips just buy into them, don't wait for any signals. Don't wait for anything. Just buy the dips, always using a stop, but just buy the dips. If you're going for 1.5-2 points you're going to be running 80% winners. If you get below the 2-day line, which is the blue line, now you don't want to buy the dips because maybe that's the beginning of a downtrend. What you want to see is some sort of a bottoming formation. If you see the bottoming formation, that's not a place for 1 or 2 points. That's a place for more than that. That's a minor position play. It's not a real position play like you have in your buy windows on the daily, but it's a minor position play. OK? You can use it as a trade thing. You can use it to run it up. Set a stop and see where the heck it goes. It all depends on what the market is doing in an overall position. But for the time being, leave out the green line, all right? I'm sorry, I'll take it out next time. That's all there is to it. it can't get much simpler. So you want to sell any kind of a little rally if it's in down-phase and it's below the 2-day, and play it for that. It can't be much simpler than that. Trading is not complicated. Trading is very, very simple as long as you don't try to out-think yourself, or out-guess yourself, and combine it with risk control. It's about as easy a business as you could possibly get into. Will it give you 100% winners? Absolutely not. Will it make you money month in and month out? Absolutely yes. When you're doing the so-called hit and run stuff, the smaller the target the higher your percent winners. You've got to use a little bit of an art form. If you've had a nice run already, be careful up there. Just use some simple common sense. Like somewhere around February 3rd or so, you can see it was a little bit extended. If you want to use some of your momentum stuff, I don't believe in any of those indicators, but if you want to use some of your momentum stuff, OK, maybe you hold off there. Oh! And then it gets below, on the 3rd it gets below the 2-day, and guess what? Look at that beautiful little dot1! And then it takes off again from there, and then it has another 10-point run or whatever the heck it is. It's real plain and simple, no fanciness. As I've always said, the key thing in trading is two factors, trading with the trend, and using risk control.
Now how do you determine the trend? You can use the 3-minute waves, the swing chart (and I'm not getting into this). That's a game in and of itself. Here's another game. Don't try to mix them all together. They're all separate games unto themselves. You've got scalpers long and scalpers short, position long, position short. You've got 3-minute games. You've got windows of opportunity games. And now here's another game that's utilizing moving average. No great genius work, real simple stuff. But the key to this thing is, understand where you are, have the patience to wait for the proper setup that you want to take. If you want to play positions, wait for it to go below the 2-day line. If it goes below the 2-day line, wait for some sort of a failure swing, a dot1, I don't care whether you use a parabolic, a fast one, a slow one, you can use whatever you want. And you get on board and go for a ride. It couldn't be simpler. Any questions?
Trumbull: What were the values on the volatility stop that you had when you're playing the 3 moving averages, or the 2 moving averages?
Actually I had a parabolic stop. It's just a 20/2. If you want to use a 20/3, go right ahead. If you want to use a 50/7, go right ahead. It doesn't matter. None of that stuff is critical, because the first thing that you're going to determine is that I'm using this 9-day. If you want to use an 8-day or a 10-day, I don't care. It doesn't make much of a difference. None of the numbers are critical. It's the concepts that are critical. You must stay consistent to your concepts. So basically, if you've been playing the long side ever since around February 1st, that's basically the only way you should have played the market. Anywhere from January 31st on, based on this game, and remember there are many games, but this game from January 31st on is above the 9-day (which is the 1215). And guess what it says? Play me from the long side. It's not any great genius work. That was down around the 1170 area, and we've gotten up into the 1210-1213 area. You buy the dips, put in stops. You're not going to be right 100% of the time. You're putting in tight stops. All right, you'll get stopped out occasionally. But when it goes your way, play with it a little bit. You wait for it to go down below the 2-day, that's the place for a position to ride with. Where people get screwed up is that one minute they're thinking long, one minute they're thinking short. You don't know what the heck you're doing. And granted, the S&P market, basically hasn't had any real moves in a long time. You get into some markets that are moving, or sometimes when the S&P is moving I don't believe in support and resistance, but I'm talking about a serious break of the line. So around the 10th or so, you had a couple of little tiny dips below, but it was predominantly above. You want to start seeing some of the little peaks of the parabolic being below that line, then you know that it's turned down. Is it going to fool you once in a while? Absolutely. But as far as I'm concerned you never saw one peak below the 9-day. Every peak has been above the 9-day. When the peaks start being below the 9-day, then you can say it's red light time.
Let me put up the continuous contract and we'll go back quite a ways and see what that looks like. [chart FL66.png] Take a look at that from December 10th on. From December 10th until the beginning of January, which way would you play the market, Trumbull?
Trumbull: I guess you could say the long side. That looks pretty easy.
Trading is easy. Don't out-think it, OK? Any kind of game, and as I say you can come up with a gazillion types of games. Make them simple, make them logical, make them non top-picking. Make them go with the trend. If you want to play around with a little parlaying, that's fine. If you look at December 17th or 18th or so, you were down below the 2-day. Oh! That's a nice place for What kind of trade would you be looking for on the 17th and 18th? Trumbull, go ahead.
Trumbull: You'd be looking for a position trade.
Again, how much easier do you want it?
Trumbull: I'm always looking for something easier, but that is pretty good. Pretty cool, thanks!
I'm trying to post another one here. [chart FL67.png] All right, who wants to tell me what they would want to do from roughly October 27 to November 18th? Based on this game, which way would you like to trade the market?
Trumbull: Well you'd be trading it
on the long side, and it's pretty interesting, you did get a pretty nice run
up, even though we don't get a position on because we haven't fallen below the
OK, that's fair enough, but at least you know which way you're going. And by knowing which way you're playing it, you're not looking I mean what people don't want to realize is that the markets are random, basically. They are truly random. They go up, they go down. However, within the randomness you have a trend bias. That trend bias is the edge that you have. If you'll stay with that edge, you'll be fine. And occasionally that edge is going to last for a hell of a long time, like there was a nice period there. Will there be losing periods? Absolutely, I guarantee there will be some losing periods in there. But when the winning period is there, don't out-guess it. Don't out-think it. I mean you can come in there day after day after day, and you'll make money on these up-trends. You don't have to say, "This looks like a top." It's nonsense. Nothing looks like a top, OK? Nothing particularly looks like a bottom. All you've got is a trend, you've got a pullback in the trend, and I'll take it back a little bit Maybe when you have a pullback in the trend, and the trend is still up, you'll have some sort of a bottoming formation, which will give you a failure swing, a dot1, whatever the heck you want to call it. This is using as a basis the parabolic. If you want to use it with the volatility it's not going to be quite so sensitive. Pick any which way you want to do it, but it tells you which way to play the market. If you look at the bean market last year, the oil market when it was running up, you didn't have to be any kind of a genius. Oh! You take something like this. Guess which way I'm going to play it. That's all it takes. It's that simple. The hard part is emotionally staying with it, and the critical part is maintaining risk control. Don't get carried away. You don't need a million things. Just think of the 9-day average as nothing more than a red-light/green-light. Green light above, I'm playing the long side. Red light below, it'll play the short side. And don't try to figure out the next two-second move, the next 5-minute move, or this or that. That's random stuff, OK? That is random stuff. What did I hear recently? I think it was Warren Buffet. He was selling some stock to buy some other stock. Because he sold one stock maybe it knocked it down. You can have all the chart formations in the world, but somebody had to do something, so on a short-term basis it will maybe look one way or the other, but a trend is a trend is a trend, and the only edge in this business that you have is the trend.
OK, I'll go back a little further and see how far this goes back. [chart FL68.png] OK, starting from October 8, it's a downtrend, so there's no reason in the world to be long after that. But look at October 7th. On October 7th we're above the 9-day, but we're below the 2-day. Looking there I can't see any type of a buy formation whatsoever. So if I'm looking to put on a long, I don't see any kind of failswing, I don't see any kind of dot1 on October 7th. So that's how that trend was ended. Maybe you would have found some reason to buy there, and you would have gotten stopped out, or maybe you would have stayed out for that day and a half, and then, Oh! The trend is down, and there's another opportunity there. Use a little bit of intelligence to see how you want to play it, but if you want to use this as a guide, you can't find anything simpler than this.
Let me go back even further and see what we come across. [chart FL69.png] OK, there's some more. Now remember, here's the philosophy behind it. When you have a movement that really doesn't do too much, you're not going to make much, you're not going to lose much. When it has a nice move, which they will from time to time, even in this thing from September 22nd on it had a nice move. Then again starting about October 1st it had a nice upmove over there. You know which way to do it. You will not make money in all of these. Just like anything else, if you try it 10 times you've got to figure 3 or 4 times are going to be a wash. Three of them you'll lose, well in this case it won't even be 3 of them, but for argument's sake 3 of them you'll lose a little bit of money, and 3 of them you're going to make a lot of money. And when you can understand that, that there's nothing that's going to give you 100% winners, you're going to get areas when you're going to make a little, lose a little. Call them washes. Then you're going to get areas when you're going to make a lot. And in the market there are basically 4 things that you can do. You can take a big profit, you can take a small profit, you can take a big loss, and you can take a small loss. If you can avoid taking that big loss, you're 90% ahead of the game. If you like this way of doing it, that's fine, it's just another game. You want to coordinate it with some other things? Starting to mix and match stuff can get you a little screwy, but you want to think of each game as a simple game unto itself. The 3-minute is one game by itself. That gives you powerbuys, etc. etc. This gives you a simple trend indication on which way to go. Will it catch the top? Absolutely not. Will it catch the bottom? Absolutely not. But maybe the 3-minute might catch the top or the bottom. So now what you're doing is you're getting into more and more and more dimensions of trading. Anyone who tries to guess what the market is going to do is going to lose. You can't guess. You must have a defined plan, and as long as you have a defined plan, in the long run that defined plan will work. As I say, on this game, you're in a downmove if we're looking at September 22. OK, you're below the damn thing. All you've got to do is sell any kind of little rally. You're able to hit and run, thank you very much. And it's really that simple, there's nothing complicated. The complicated thing is that it's not you against the market, like I've always said, it's you against yourself.
Let me see if this goes back any further. [chart FL01.png] Let's see what we've got. That looks kind of nice to trade the long side from, and that's going back into August. That looks fairly pleasant. But what it does is it takes away the thinking. Should I be long? Should I be short? You just say, OK, I'm going to accept this as a simple game. If I'm above the blue, if I'm above the 9-day, guess which way I'm going to play it. If I'm below the 9-day guess which way I'm going to play it. You don't have to out-think yourself constantly. Wait for little dips. OK, you can buy it. Certain times it'll give you the opportunity for a position. All right the next one running from the end of August almost to the end of September, you're just playing it in one direction. What's the big deal? That's about all the data I've got on this one, without getting too nuts into it. [chart FL02.png] So you can see from August 16th that basically you'd be playing from the long side. Around August 31st could we touch the short side a little bit? Yeah, maybe, because the green steps below the line. Listen to the market. It'll make you a lot of money. And sometimes it'll say, Ha-ha, I fooled you. It'll tell you places for hit and run, places for positioning. What I've done, I've got it down to an exact science. If you buy the dip and you put on a certain stop and you've got a certain target, I know I'm right 82% - 83% of the time. I've got it all worked out to be exact percentages, and it took a good couple of months to work all that out. I know exactly what my percentages are if I buy the dip. So for example on August 18, we had a little dip there at the opening, and I know if I buy that dip and I'm looking for about a 2-point move, I know I've got roughly a 78% probability of getting that 2 point move. If I'm going for a 4-point move, I know I've got about a 71% probability of getting the 4 points out of it. Then if you want to play a little bit of Elliott Wave within it, try and outsmart yourself a little bit, I have no problem with that. As long as you realize which direction you're going to play it. If it gets below the 2-day moving average, and it makes a little failure swing, which is the double bottom, then you can say Oh, this one is worth a position. Now I know that I'm risking 3 points, and basically it comes out to less than 3 points. I know I've got better than about a 68% probability of going 10 points on something like that. So I've worked out all the numbers and all the probabilities on it. just looking at it, it's nice because it looks great to the eye, but I've actually had it all programmed and taken the time to know what my probability is on each and every movement. You guys get the idea? Any question on this? Forget the green line for the time being.
Trumbull: What trades do you use to give you those probabilities?
I'm buying into the weakness. I wait for it to turn into a downwave, and I buy in the downwave. Once you turn into a downwave-it takes a bar that has to close below the parabolic-OK, you don't buy that bar. I now can buy the next bar. I know I can buy at the opening or better, so I've taken my probabilities from the opening, and then I've taken my probabilities if I buy down a little bit more. So basically what I do is as soon as it goes down I start to buy and I keep buying on a scale-down basis against a pre-determined stop. The stop doesn't change, but what happens is that the more I buy, the smaller my risk is, because it's against a pre-determined stop. So I've gotten the probabilities based on buying at the opening price, and I also know the probabilities of buying on the low of that bar, which, yes, you cannot buy the low of the bar. Ah, but sometimes you can buy lower than the low of the bar. And on the same token you can gauge the market because I'm giving it a specific target to get out. I can also get out better than what the computer is getting out. So what I tend to do is I play a little game with myself. I keep a number of sets of books. I keep one set of books of what the computer is doing. Then I keep a set of books of how I'm doing versus the computer. And surprisingly enough, I tend to do a little bit better than the computer. The computer buys exactly on the opening, puts in its stop. I have a little flexibility on my entry. I have no flexibility on my stop, so if the computer gets stopped out, I'm stopped out period. And I have a little bit of flexibility on my targeting. That's where a little bit of experience, a little bit of art form, comes in, more so just experience. So I can do better than the computer from time to time, OK? Sometimes the computer does better than me, but overall I've gotten to a point where the computer's saying buy right here I'm in an uptrend, so therefore I'm going to be a buyer. I'm in a correction. The computer has an exact price to buy, which is the opening of the bar. I allow myself the flexibility to buy over there. If I get an opportunity I'll buy even more if I can buy it cheaper. The computer has a stop. I use the same stop the computer has. The computer now has an exact target. I play around with the target. I'll look at the market and see what's going on, and that's where some experience comes in. Sometimes I might sell out a little early. Sometimes I'll sell out part of it. Sometimes I'll hold on for a little bit longer. Because in the research that I did I didn't take into account, although I've got it set up for it, but I didn't bother to take into account trades that occur towards the end of the day, or in the middle of the day. The middle of the day tends to be quieter. If you get a trade towards the end of the day you have the possibility of a little bit better of a run. So the computer doesn't know from any of that stuff. I can throw that into the mix. The only thing that I don't violate is the stop that the computer has. We both have the same stop. We both have approximately the same entry, and I can screw around with the targeting a little bit. I also do one additional thing. I'm buying into the weakness. I'm using, we'll call it a 3-point stop. I'm using my 3-point stop. But once it starts to turn back up and goes into an upwave, I raise my stop. And occasionally, and I know what the probabilities are of once it goes back into that upwave, I know what the probabilities are of it going another point or 2 or 3 points etcetera. Sometimes I might even add a little bit more. You know, if I've seen some sort of a flag or a wedge or whatever the hell you want to call it and I'm long and I can raise my stop, I've got a good entry on some of it, I will buy some more as it starts to break out. There's lots of little things you can do. But the one thing that I'm not doing is I'm not going short in an uptrend. I hear it all the time. Everybody is trying to find the top. It sounds nice. You're going to be a hero, you're going to find the top. Stop being a hero and just play the game, and you'll do real well.
Trumbull: OK, thanks. Just as an example, on the 19th you got that double bottom. You dropped below the 2-day moving average, so you're looking for a position now. The thing goes up a little bit, you get an upwave, and then you get a downwave. So whereabouts would the computer now pick that entry?
All right, in that case you're down below the 2-day average, so the computer's not buying weakness. You go down, you come back up. We're looking at August 19. It comes up just about to the blue line, comes back down, forms a double bottom. Now I'm not buying weakness. In that case I'm buying as it turns back up. I'm putting my stop roughly 3/4 of a point below is what I usually do, maybe a point. So in that case where you're below the 2-day I want to see a bottoming formation. So I'm not buying the weakness, I'm buying some sort of a bottoming formation where I can buy once it turns around. But once it turns around, you're going to have 1, 2, 3, 4 opportunities to buy weakness for a point or two. Play around with it. If you're just buying into it, buy it there. So if it's below the 2-day I want to see a bottoming formation, failure swing, dot1. The truth is I'm in a golden window of opportunity, although it's not the daily window of opportunity. I know what I want to do. So as long as I know what I want to do I don't care what people around me are doing. You don't need much more than that. What you've got to do is stop trying to get tops and you've got to stop getting bottoms. The big problem with that is that you'll be right occasionally. But the biggest problem with it, well there are two additional problems with it. If you're pickng tops you're going to miss out on trading the long side. So you're destined for doom in you try to play top picker, by missing the upmove. And unless you've really got a set of whatever... you will not have the guts to stay with it when it does turn back down. So it's a totally self-defeating thing to try and do. Does anybody have any questions?
Nobody? OK, I'll just repeat things. Markets are random, however within the randomness of markets you have trends most of the time. Sometimes you don't, but most of the time you have a trend. You can go to whatever time frame you want. Pick your time frame. What I've shown you today is strictly based on the 3-minute time frame. Window of opportunity is based on a daily time frame, but it utilizes the lower time frame to help you get your signal. Then the next thing that you always want to do is use your risk controls. Go through last week's stuff and you'll get your risk control. If you'll do that, it becomes an easy thing to trade, but the hard part is to believe it and to really do it. It's not you against the market. It's you against yourself. The market starts to break, you start to get bearish: Never be bearish, never be bullish. All you want to say to yourself is, Oh, I'm in an uptrend. Oh, I'm in a downtrend. That's all you want to know. If you're in an uptrend, in an uptrend you're either overbought or oversold. If you're overbought and you're in an uptrend, and if you were smart enough to go long when you were oversold in an uptrend, and now you're overbought in an uptrend, Hey! Let's take some profit. If it now gets oversold when you're in an uptrend, look for a place to go long. That's really all there is to it. The only edge that you can have in this business is the trend. And depending on the time frame that you use the trend can be up for one person and down for another. It really doesn't matter, because as long as you follow an organized plan, it makes trading easy, comfortable, relatively stress free, and by putting in that risk control (you know TR divided by 20, etcetera), it allows you truly to trade in a relatively stress free atmosphere. And that's what it's all about. Just don't think during the day. Your thinking is done at night. You want to do your work, and you want to say, Oh, OK (and I'm talking this game right now). I'm above this thing, I'm going to be a buyer. I'm above the 2-day, fine, I can buy any kind of silly little dip and look for a hit and run. Oh, I go below the 2-day, which probably means you got stopped out of a trade, but now you're looking to put on a minor position, not necessarily worth campaigning, but a minor position. I mean not a small amount, I'm not talking quantity, but I'm talking about a position that you're not looking for a great move out of. The great moves come out of the windows of opportunity.
I'll put that chart up. [chart
FL03.png] OK, those are your real position plays. And if you think about
the sine waves that I was just talking about, think of your moving average as
a sine wave. If you're above the volatility, the slope of the sine wave is up.
When you go into a negative amplitude, you go into a lower time frame. You find
some reason to be a buyer. You may get stopped out once or twice, but then when
you get on board and it starts to run, that's where you have room to campaign.
Because you see on this last one, it was down in the 1193-1194 area... As a
matter of fact I think Trumbull got the entry on those absolutely perfectly,
and that's where you want to position. I mean you've gotten 20 points on that.
And if you look back at the short side on the other one, you could have gotten
short somewhere around 76. it didn't go more than 10 points. If you got lucky
you got out. Worst case scenario you broke even. Three circles back you have
a window of opportunity around the 1190 area, getting down to the 1160-odd area.
So there was a 30 point window possibility. That's where you've got the opportunity
to truly campaign. Four circles back, again the 1190 area, getting down to the
1170-some-odd area, so you had possibly 15 points in that. The interesting one,
the fifth one back, which was a buy window around the 1201 area, never had any
kind of a buy signal there. Absolutely nothing. Go back one further, which is
somewhere around December 20, which occurred in the 96 area, you got 20-odd
points out of that one. The one before that, around December 6 or 8 or whatever
it was, occurred around the 1180 area. You had potentially almost 40 points
out of that. Not to say that you're going to stay with it that long, but that's
what you need when you're going to do campaigning. So when you're looking for
5, 6, 7 points, you don't have enough real room to campaign. You've got to be
looking for 10 or 15 points plus. In this market that's a decent move. A couple
of years ago you'd be looking for 50 points, but the market's been relatively
quiet. That's your campaigning area, all right? Those are the ones that I like
to concentrate on. I think anybody that will just play that, and play it across
multiple markets, you'll be surprised how well it works. One other little thing
that you can do is take this 9-day thing and if you want to filter it with a
daily volatility, the daily 9/2.5 volatility stop, it makes it very interesting.
If you're in a downwave based on the daily volatility, then only play the short
side based on the 9-day average. Will you miss the beginnings of some moves?
Absolutely. Will you avoid some losses? Absolutely, definitely. So you can use
a little bit of a filter on that if you want. But that's pretty much it in a
nutshell. Trading is not difficult as long as you don't try to tell the market
where it's going to go. Don't think about where it's going to go, OK? The only
edge that you have is what is the trend, and the trend can be different depending
on your timeframe. So figure out your time frame. If it's the daily timeframe
you have the ability to fractal down. If you're using a 2-3 minute timeframe
you don't really have much ability to fractal down. The only thing that you
can do is go to faster parabolics or volatility stops to help get signals when
you get into so-called positioning areas. That's really all there is to it.
I don't believe in all the crazy nonsense of all the indicators and stuff like
that. Yes, you'll probably see I have a stochastics and I'll have an RSI. That
helps me a little bit sometimes to look for a boil, to know that if it's in
an uptrend and it's oversold, that's an interesting area to be a buyer. That's
all I use it for. But as far as predictive value, I don't think anything has
any real predictive value. All you can say is, I'm in an uptrend or I'm in a
downtrend, period, and play it accordingly. That's it!