You Can Observe a lot by Watching!

I have been trading, and mentoring others on  trading options for the past decade.  I have worked with over 20,000 students fromSidney Australia to Albany New York.  Inthat time I have worked with many systems, indicators, and studies and come to oneconclusion – If you draw enough lines on a chart, your stock is bound to hitone of them eventually.  For me, tradingis not about impressing others with fancy algorithms.  It is about Yogi-isms.

Yogi Berra was one of the most colorful figures in all of baseball.  An amazingplayer, starting his career in 1946, he eventually was named the Manager ofthe Yankees, the Mets, the Yankees again, and then finished out his career withthe Astros in 1992.  Yogi’s contributionto Americana actually goes far beyond the sports world.  He was also known for creatively phrasingsome of the most obvious thoughts ever!

Itain’t over until it’s over!

    It’s déjà vu all over again!

Thefuture ain’t what it used to be!

Andfinally – You can observe a lot by watching!

Past performance is no guarantee of future returns. But youcan observe a lot by watching!  That is mymotto for my trading strategy.  The rulesthat I have for trading have grown out of long hours of chart observation.  They may be obvious to some and too simplefor others, but sometimes simple is best. Here are my top eight chart observations.  (Charting package is from “The Wizard.”)1. Trading with the trend is the safest way totrade. (Path of least resistance)2. Breakouts provide the greatest potentialfor highly profitable trades. (Beginning of new Volatilityphase)3. The definition of a bullish trend is “aseries of higher highs and higher lows”4. The definition of a bearish trend is “aseries of lower highs and lower lows.”

5. Oldresistance becomes new support.

6. 

Oldsupport becomes new resistance.

7. 

Retracements are a healthy

component ofa trend.

8. 

Reversalsand retracements look very different.

Disclosure:  TheWizard and the author are currently holding no positions in the securitiesmentioned in this post.

All investments involve risk, losses may exceed theprincipal invested, and the past performance of a security, industry, sector,market, or financial product does not guarantee future results or returns.

TradeKing provides self-directed investors with discountbrokerage services, and does not make recommendations or offer investment,financial, legal or tax advice. You alone are responsible for evaluating themerits and risks associated with the use of TradeKing's systems, services orproducts.

TradeKing selects and defines as All-Stars certainindependent market commentators who are recognized industry personalities andexperienced traders and who provide timely market commentary via the TradeKingAll-Star blog at http://community.tradeking.com/members/tk-all-star/blogs. EachAll-Star commentator’s bio, related qualifications and disclosure as to theirrelationship with TradeKing can be found on the All-Star blog roster, availableat http://community.tradeking.com/members/tk-all-star/details. The selection ofAll-Stars commentators is solely based on the quality and style of the contentprovided. TradeKing does not measure, endorse, or monitor the performance orcorrectness of any statement or recommendation made by independent All-Starscommentators on TradeKing.com. Supporting documentation for any claims made byan All-Stars will be supplied upon request by the author, who is solelyresponsible for the views expressed. Send a private message to All-Stars usingthe link below the profile image.

Any strategies discussed and examples using actualsecurities and price data are for educational and illustrative purposes onlyand do not imply a recommendation or solicitation to buy or sell a particularsecurity or to engage in any particular investment strategy. In reading contentin the Trader Network, you may gain ideas about when, where, and how to investyour money. Although you may discover new ideas or rationale that may becompelling, you must ultimately decide whether or not to put your own money atrisk. Consider the following when making an investment decision: your financialand tax situation, your risk profile, and transaction costs.