This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

In my previous post, I made the remark that it doesn’t take balls to make calls. However, it does take courage to plot out your trades in advance complete with your reasoning, and expectations as you pull the trigger. Dave and John are doing that at the TD. They even went so far as to lay out their expectations of a rate cut if you follow the complete thread, and read the comments. Read how this play panned out.

Let me not leave Will out of this discussion. He is doing it too! Not bad for a Louisiana education.

Dave and Will are quickly catching up to Babak and Richard in this year’s Stock Pimp contest. There were two winners last year. Is there room for four?

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I’m lifting a section of Dorsey’s website to explain how I use the 45 degree trend line.

Bullish Support Line.

Serves as a guide for the up trend of a stock. Has a habit of acting like a brick wall. Stocks will often come right down to the bullish support line and then bounce off.

Once a stock has formed a base of accumulation and gives the first buy signal, we go to the lowest column of O’s in the chart pattern and begin drawing a trend line. Starting with the box directly under that column of O’s and diagonally connecting each box upward in a 45 degree angle.

The opposite is true for a bearish resistance line.

As you can tell from looking at numerous charts, the 45 degree trend line works unless it doesn’t. If the security is indeed trending, then it just offers another area of support/resistance. There are other “creative” entries that I’m exploring, and will post them as I use them. However, this provides a low risk area to short into strength, or get long into weakness.

Richard pointed out in a comment earlier that the 45 degree trend line may very well be “the line in the sand.” That’s not a bad place to take a low risk entry in anticipation of a resumption in trend. The key is “resumption in trend.” Don’t short every bearish trend line, or go long at every bullish support line.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com