Bounce Plays 101
"The Harder The Crash, The Higher The Bounce!"
When playing the bounce, my favorite 'tool' for catching falling knives is the Fibonacci retracement.
(Works for me most of the time)
The lines "Buy the fear" or "Buy when there is blood on the streets" have their merits when it comes to technicals.
But hey! Don't worry, I won't be explaining what I just wrote.
I just felt like writing it because it felt right. Hahaha. Here I go again.
I'm currently just too lazy to explain how to play the bounce in such lengthy detail.
After all, there is no such thing as absolute truth when it comes to technicals.
Only possibilities.
But to save you from all my nonsense. Here's an example. Watch and Learn:
Another thing to remember when you bet your balls on the bounce:
Never listen to market noise. Don't let your judgement get swayed.
SELL THE BOUNCE!
But If you do listen?
Well... At least try to feel the 'force' and try to be like this guy:
Happy Bouncing!
Currently Applying these on ORE/MARC.
Check my port : (Click Here) - para di nyo masabing i'm giving you crap:
Picks for May 7-11
4. ORE Chart 5.5.2012
5. ORE Chart Update 5.7.2012
6. ORE Chart Update 5.8.2012
7. ORE Chart Update 5.11.2012
8. MARC Chart 5.5.2012
9. MARC Chart Update 5.7.2012
10. MARC Chart Update 5.8.2012
11. PHES Chart 5.5.2012 - Status Update 5.8.2012 (Did not go to desirable bounce levels)
Additional Notes on Bounce plays:
+ Always observe the "3rd day rule." For those who haven't heard of this rule, it's when you take profit on the 3rd day of a stock's ascent or buy a stock on its 3rd day decline. One very important thing to consider is that when you buy on the 3rd day (for bounce plays), the volume traded should be lower than that of the previous days' decline.
+ When you buy using Fibonacci retracements, make sure the day's closing candle doesn't violate or close below your retracement level.
+ The best candles to watch for when playing the bounce are, the abandoned baby, the hammer, and some variations of dojis. Check out these candles here: http://www.candlesticker.com/
+ Be sure to go for liquid stocks. Illiquid stocks usually don't bounce.
+ 61.8% and 76.4% Retracements would be the ideal crash-point for pickup.
+ To maximize profits: If on the fourth day during the bounce the stock closes strong (prices closes at the day's high) , hold and sell within the first hour of the next trading day. But in case prices gaps down on the fifth day, do not hesitate to sell when the bell dings.
+ Make a checklist of these notes: the more you have these "ingredients" on the chart, the higher the possibility of a bounce.
Of course, that's just me. Don't believe the crazy trader. Hihihi.
Source: Trading 101: Bounce Plays - by ZeeFreaks (zeefreaks.blogspot.com)
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