A simple trading method is to use the 20-period moving average. When the 20 is rising, buy a reversal candle at or near the 20. When the 20 is falling, sell a reversal candle at or near the 20. When the 20 is flat or wavy the price will rise and fall across the 20, ignoring it. When the 20 is flat or wavy you buy below it and sell above it. But as soon as the 20 captures/holds the price that game has ended and you go back to trend, up or down, following using the 20.
SKUL on the daily tested that 5.57 level which was the first significant low off the 6.10 high. Today it was also the 20-day MA; the rising 20-day MA. On May 16th the 20-day held the price for the first time in a long long time. So the rule says to buy a reversal candle at or near the 20. So was it a buy today? Not yet; didn't get a reversal candle today....maybe tomorrow.
On the 60-minute chart the 20 has been wavy for the last 8 or 9 trading days. The price was moving above and below it. But today the price could not get back above the 20.....oh oh. It also closed on an uptrend line going back to May 6th. Tomorrow, Wednesday is critical.
Thanks for outlining a simple trading strategy OP. As a newbie to technical evaluation, that's really useful. I'll probably test it out on one of my other stocks which I trade a little, currently with no clear strategy i.e. buy when I think it's low and sell when it's higher! (rushes off to find out what a reversal candle is...)
Any tips for a good free site to use for graphs and candles and all that jazz?
You have to love you tube despite what Omar thinks. Try searching that site for "High Profit Trades found with Candlestick Breakout Patterns" and "Oliver Velez: Elephant Walk Part 1 - Dallas" The first video reduces the number of candlestick patterns to 12. Oliver uses his own names for them but simplifies it to 3 patterns.
Free charts sites? I like stockcharts dot kom when I'm not at my platform. You have to keep in mind though that for dividend stocks they adjust historical prices for the dividends paid.
I guess I take it for granted that everybody has good charting software.....maybe not. About 10 years ago I was paying over $100/month for e-Signal. Now I use Think or Swim's platform, free with a brokerage account and every bit as good as what I used to pay for. I also have account with Scottrade but don't think much of the platform. You can also download Ninja Trader for free for daily/weekly/monthly charts and link to Yahoo data or their preferred provider. If you want streaming intraday trading you have to pay for Ninja. No Way would I pay for it...it's not near good enough.
Wedneday, June 5th.
Down 3.02% to close at low of day at $5.45. Broke thru the May uptrend line. Stopped at the 200-hour moving average and at the AB=CD completion of A=6.10, B=5.57, C=5.98. Tried to bounce but beaten back down to the 200-hr. Bear's edge here..
The 355-hour MA is at 5.38. The 50-day MA is at 5.36. The 5-day-pivot-S1 is at 5.29. The onepoint272 fib extension is at 5.31.
Meant to type "the 365-hour MA.....". Also, remember that big block trade on May 14th at $5.45 or 5.46? Closed at 5.45 today........coincidence? Not, I think. Yeah it is going down with wide price range, 3% today, but so far not much volume coming in. I'm thinking the big players are just taking it down to buy more for their next campaign. Could be getting close, time to measure the powder and wait patiently for good reversal candle.