Ali Son wrote:So how many years is that since you first noticed what a flag looks like on a candle chart? Did you have a mentor trader who clued you in? Did you use it when you were employed full-time as a trader?
Time projections==proejcting (forecasting) in advance how long it takes for price to reach those areas of S/R. A few gods of EW do it consistently to the day, believe it or not. That's the only piece you are missing (and the most difficult) from your methodology. Perhaps Darvas method solves this, but if not, one is still a prisoner of the "random" (though logical some say) appearance of the inteaction of price and time.
Time is really the distance that price will move in between S/R and through S/R to the next S/R, forecasted in advance. Hence, to do it, you must not only have a price target in mind (S/R) but know the speed which is related to intensity, which might require greater understandings of pattern recognition and momentum ("intensitiy").
It's not esential as your methodology is sound and fairly accurate but gives those grey beards who can do it, Oracle-like piece of mind. Yes, it sounds crazy, until you've seen it done, again and again over the years. Don't ask me how. (I know S/R [called fibs, etc.] is essential to it though.)
I have been trading for 2 years full time and 10 years part time.
I did all the usual stuff, books, seminars, work with full time traders, ect.
As far as time goes, I never know when price will reach an area of support or resistance.
When we were trading at 6 year highs, I went back 6 years to find resistance just like Weinstein recommends.
Time is not important to me.
Here is a news flash about everything you mentioned, Fibs, Gann, EW,
MA's, pivots, ect.
All that crap is only out there for someone to sell you.
They only work when they happen to form near true support or true resistance.
Stick a Fib or a pivot or your favorite indicator or MA on one of the charts I post here and watch them work when they line up with the horizontal line.
When I put a horizontal line on a price chart in an area of support, the price will at least attempt to stabilize. It will bounce if it is true support.
In many cases if it is a retracement in an uptrend, the uptrend will resume when the price revisits this area.
That last part is the key to the whole situation.
If the equity has begun to make the downstair pattern, it is no longer in a uptrend. When the price revisits old support during a downtrend, it will only act as a speed bump as the downtrend picks up.
The bounces will be small and not worth trading in many cases.
That is where Weinstein's 4 stages is most important.
Weinstein says never buy a stock that has entered a stage 4 downtrend.
Never! He is right. Wait until it enters a stage 1 trading range and breaks out into a new stage 2 uptrend.
A lot of stocks like BRCM entered a stage 4 downtrend long before the recent sell off. I have been buying puts on BRCM, AAPL, YHOO, EBAY since February because they all entered stage 4 downtrends a long time ago.
Look at the weekly YHOO chart below.
It broke down in February.
YHOO is in a trading range now.
Notice I said trading range not stage 1 trading range.
If it breaks down below the low of this range, then it is a stage 3 trading range as stage 4 resumes instead of a stage 1 into a stage 2 uptrend.
That could happen if this is a new bear market.
Notice I don't commit to what the market is going to do.
I just use the 4 stages to keep me on the right side of the market.