Thursday, May 15, 2008

Ooops. Read the Manual.

Interesting. I made a mistake when I was picking stocks to watch with regards to deciding whether swing trading was right for me. My mistake was that while I found to stocks (TSX:DWI and TSX:IGM) that were showing trends, neither was in the buy (or short) zone in between the 10 and 30 day moving averages. Good thing I'm just watching and not buying.

Now, both of them are in the process of pullbacks, moving in the opposite direction of the trends I identified in my last post. Which is good, actually kind of confirms the system. Now what I have to look for is for the pullback to bottom, and hopefully reverse within trading zone. I think I may need to come to a better understanding of ADX before looking to actually trade using the swing trading system, as I am at a loss for why the ADX is going up for DWI and down for IGM. According to this would mean that the uptrend for DWI is strengthening and the downtrend for IGM weakening, but I'm just not clear on why.

Lots of factors to figure out.

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