Breakouts and Technical Analysis of Chart Patterns
I'm very bearish on the U.S. dollar and have been for years. That's why I have so many of them. This sounds like a contradiction, but let me explain. The reason I have so many dollars, even though I think they're worth less and less, is because I don't hang on to them. In my mind, cash is trash.
Handling Gap Entries
Many times an opening gap can be the high (or near high) for the day. Stocks often quickly reverse from these situations. Therefore, blindly entering on an opening gap could be a bad idea (reminds me of the "Bad Idea" jeans). Below is a bit of a "no brainer" situation. The stock gaps opens and quickly reverses. Even though the entry triggers, this position should be avoided. A "second entry" could then be placed above the opening range (i.e. intra-day high).
Before I present some eye-opening findings, allow me to propose a thesis:
Every market has its personality, and that personality is defined by two traits: Volatility and Trendiness. A volatile market is one that moves a great deal from time period to time period. A trendy market is one that tends to move in the same direction from one period to the next. Over time, markets change their personalities, which is to say they change their volatility and trending. This is part of what makes markets so difficult to trade: just as traders adapt to one market personality, another is likely to take its place.