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Pls help with this english sentence

  • #1
  • First Post: Edited 5:44pm Mar 30, 2009 5:26pm | Edited 5:44pm
Hi,
There's a sentense in the following that's hard for me to understand....I mean english about trading:

Quote
......When you are convinced a bull trend has started, look now for a four-day reversal. At that point you shall call
that wave one of buying. Look further and see if you have any other four-day counter trends. If you can point out another, let us call that wave two. And then look for a third. .....
On your current charts, look for a market that is established as a bull market. What you want to find is a possible four-day counter trend starting to develop. We want it to be in the first wave of buying in the established bull market. You could look at the second four-day counter trend development but
we want the most powerful opportunity.
You will want to take a position on the first four-day counter trend in the direction of the bull trend. You can make it one of two ways. You can do it on the break out of the forth day's highs when it breaks above the previous four days or you can position when the move is above the high of the established bull move......

You can do it on the break out of the forth day's highs when it breaks above the previous four days-----This sentense talks about 2 breakouts, what's the meaning exactly? Please give me a simply example to illustrate this.

or you can position when the move is above the high of the established bull move-------"the high of the established bull move" means the highest point of this trend?

Thanks.
  • #2
  • Edited 6:49pm Mar 30, 2009 6:38pm | Edited 6:49pm
Hello NEO007,

To try and answer your question about the sentence with the two breakouts, I am almost certain this was nothing more than poor wording. His choice to use "forth" distracts me significantly, because in this scenario one can't tell right away whether he means "upcoming" or it was simply a "typo" for "fourth".

Focus on "You can do it ... when it breaks above the previous four days." The "break out of the forth day's highs" of the sentence only gets in the way and does not appear to be of any worthy value. Regardless, I do believe what he means is represented in the chart posted.

On the posted chart the blue MA we will call the "bull trend's beginning", as the author seems to allow your own view of when one has or has not started.

The lower of the two white lines is OPTION 1 "highs when it breaks above the previous four days"

The top line is OPTION 2, -------"the high of the established bull move"

Whether this is what he meant, I can't be sure. Having said that, both "entry" points make sense in the terms of how he was describing the approach. Also, this seems like a good way of trading. It is rather simple. Have any idea of where you would put the stop loss? At the bottom of the four down candles?
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  • #3
  • Last Post: Edited 7:42pm Mar 30, 2009 7:19pm | Edited 7:42pm
Thnx for the response.

In my own understanding, I guess "when it breaks above the previous four days" means, actually, "when it begins to break up." So, OPTION1 means "when recovering(=breaking up the high of) the last bar of the 4day reversal".

As for OPTION2, there seems no other possible understanding....I just wanna be sure.
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