FAQ

Jul 10, 2009: 1:42 AM CST

Here, you will find the “Frequently Asked Questions” regarding policies, strategies, common trades, and other information regarding the Afraid to Trade Blog and Corey Rosenbloom.

1.  What is the Oscillator at the Bottom of Your Charts and Where Can I Find Information About it?

It is called the “3/10 Oscillator” and I wrote an article about it here:

“How Can I Recreate the 3/10 Oscillator?”

2.  Is there a Quick Page Where I Can View Your Strategies?

Yes – I’ll try to keep adding to it, but you can locate basic information here:

“Corey’s Strategies”
“How Corey Sets Up His Charts”

3.  What Indicators Do You Use?

Reference the “How I Set up My Charts” page but in summary:

20 EMA; 50 EMA; 200 SMA
Standard Bollinger Bands
Candlestick Charts
3/10 Oscillator

4.  Will You Do a Chart Analysis For ….?

I am happy to receive chart requests but I cannot fulfil all requests due to time constraints.  I will do analysis for educational purposes and post it publicly on the blog for all readers to share.  Remember I’m trying to teach you patterns, structure, how to read charts, how to find trades, etc and I am very unlikely to tell you a specific trade to take or what will happen tomorrow for free.

5.  What is the Point of Your End-of-Day Analysis Reports?  You’re using hindsight – why should I care?

Almost every day since I began trading intraday, I have printed off the charts of the stocks/futures/ETFs I traded that day and overlaid my fills (entries and exits) with what was really available by looking back in hindsight on the day.  This is “Efficiency Analysis,” noting the percentage of what you achieved vs what was realistically available from the information at the time.

The reason for this is simple - if you don’t know what you’re doing wrong in your trading, how can you find it and fix it?

This analysis later evolved beyond Efficiency Analysis to educational lessons – when I would learn a new technique or strategy, I wanted to note how many times it occurred.  So, I would draw out where I thought the optimal entry and optimal exit was during the day using that strategy.  Doing so allowed me to Internalize these patterns and “make them my own,” keeping what worked and discarding what didn’t.

After reviewing over 1,000 days of data, you start to get a ‘gut’ level feel for these principles, concepts, trade set-ups, what’s most important, etc.

I provide these reports as an educational resource for you (and me) to see the same, repetitive patterns (bull flags, divergences, etc) so that you know exactly what to expect when you see the same pattern develop before your eyes in real time when the pressure of the moment is on and you’re trading live.

If you have seen over 100 bull flags pullback into support, you’ll know exactly where to place your stop and how to play for a profitable move as the pattern unfolds in real time.  That’s how the “Cradle Trade” came about – you’ll start see tendencies (patterns) that repeat and you’ll likely find your own patterns that haven’t been discovered or named before – this is how you “Own” your trades.

Plus, you’ll start to develop an intuition or ‘gut feel’ from experience that can only be achieved over time, studying daily structure in depth.

It’s using the principle “Repetition Removes Randomness” or “The More Times You See These Patterns in the Calm of your Evening Analysis, then You’ll be Able to Recognize these Same Patterns Intraday and Act Confidently Upon them in Real Time.

It has helped me immensely to become a better trader and I strongly encourage you to do the same.  I now offer this “Idealized Trades” Summary Service which is often a 5-page PDF document that describes how to recognize each day’s structure as it is developing, what trades were optimal to take within this structure, and often provides a specific “Teaching Moment” where I explain for you a more advanced technical concept each day.

6.  What’s the Deal with Elliott Wave?  It doesn’t work.  It’s too hard.  Counts keep changing.  It’s stupid.

I’m not the chief defender of Elliott Wave.  Just like I’m not the chief defender of Fibonacci Retracements or Candle Patterns or anything else in Technical Analysis.  There are plenty of resources to get your questions answered – I’m compiling free summaries at my Elliott Wave Educational Page.

Nothing works all the time.  I treat Elliott Wave no differently than any indicator, like a Stochastic, RSI, Moving Average, or Fibonacci level.  People seem to get far more upset when someone’s (or their own) Elliott price forecast failed them then when a buy or sell signal fails in their favorite indicator – but there is no difference.  A failed signal is a failed signal.  Hopefully, you took a loss and moved on to the next trade.

Yes, it is difficult to learn – it took me over a year to feel comfortable with it.  Luckily, I was forced to learn it deeply for the CMT Examination or I never would have taken the time and effort to do so.  When I started taking random stocks and practicing my Elliott Wave Counts for the CMT Coursework, I discovered that a lot of the momentum, trend, and price principles I was using currently, fit right in with the Elliott Wave structure.

During my counts, I found that many of today’s charts on all timeframes conformed to Mr. Elliott’s teachings back in the 1930s and before long, I was hooked.  I sought out advice from other Elliott Wave Practicioners, learned as much as I could, and I’ve incorporated Elliott Wave into almost all of my trading strategies.

Technically, Elliott Wave is an advanced version of Dow Theory in my opinion.

Now, Elliott Wave is only one of many non-correlated technical (price) methods I use to make my trading decisions – I will never make a trading decision or recommendation solely on Elliott Wave.

You do not have to use Elliott Wave but please do not antagonize or mock those who have found it useful and whose trading accounts are larger thanks to tactful application of the principle in today’s markets.

The judge of any method should be “Does this make me more money using it than not?”  For me, the answer is yes and will be yes until the method fails enough times to convince me otherwise.

I do not consider myself and Elliott “purist” and I apply the counts in a liberal manner only as I find it appropriate to getting a clearer picture of possible future price moves, locating better targets, or placing better stop-losses.

Please remember I provide this service for educational purposes – I have no intention of forcing anyone to become an Elliottician, nor do I feel the need to prove the method to anyone.

6.  You Don’t Draw Your Fibonacci Grids Right.  Sometimes I Notice You Don’t Start at the Absolute High and Draw to the Absolute Low.

I am always open for questions, criticism of my analysis, and feedback.  I do make mistakes.

However, please don’t assume that because something looks ‘different’ or is not ‘exactly what you’ve been taught before’ that it is automatically wrong.

Without disclosing the exact methods, I am applying a proprietary version of Fibonacci Analysis as taught to me by Constance Brown, CMT which was then enhanced in an eye-opening, private weekend mentoring session with James Bartelloni, CMT.

Just like I am not a defender of Elliott Wave, I am also not a defender of Fibonacci Methods.  If they work for you, use them.

I employ advanced Fibonacci Methods, most of which I rarely discuss publicly on the blog.  I describe these methods of how I apply advanced Retracements, Projections, and Extensions to clients of my mentorship program as well as select webinars, seminars,  and random blog posts.

I do not recommend drawing Fibonacci grids like everyone else.

7.  What Technical Indicator do you Believe is the Most Important to Watch?

Don’t get too bogged down in indicators.  Strive to learn and identify Price Principles and think in terms of “Concepts.”

The two price concepts – which can be uncovered either with the bare eye or with select indicators – are “Trend” and “Momentum.”

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