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Please can someone explained what happens in The Procter & Gamble in a selloff day? The stock fell 40% in some minutes and came back?? The company has very good fundamentals and

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Hello Everyone,I am a 35-year old SpikeTrade member from Denmark that just begun my trading career this year.Last year we went traveling in New Zealand for 3 months and it just so happened to be from 1st of October to Christmas – the exact time when the biggest financial storm of all times in the stock markets roared.I sold my business 3 years ago and invested a third of my profits from the sale in a mutual fund in the beginning of 2007. I did a lot of research on the fund before investing. They had 20 years of excellent history, including during the dot-com bust of 2000-2001 which they foresaw and survived in great style. I knew people who had been with them, and happy so, for some years which made me more confident in choosing them to look after my money, especially after I backtested some private banking stock suggestions that a few banks gave me (they were – surprise – not profitable). The mutual fund mixed bonds and stocks, so how bad could it go I thought. Their maximum expected loss over a 3 year period was 15% with a target of 90% profit over 5 years. Had I just known then what I know now about money management, I would have set a “stop” on that investment and withdrawn my money after it went X% down. But I didn’t, so to make a long story short, when we came back from New Zealand, the fund had done everything they could wrong in those 3 months, and only 20% of what I had invested in the mutual fund was left.During the trip it just so happened that I had read one of Dr. Elders books and with risk management being completely neglected by the fund while we were traveling, I sold all my shares in the mutual fund in January. And even though the huge rally since March this year, their shares are still at about the same price as when I sold mine in January – and I am still happy with that decision.A little background to the next part of the story: Denmark is the country in the world with the highest taxes. Our income tax goes up to 60% (yep!) and our VAT is 25%. Profits on stocks are taxed by 45% (one should wonder why you should even take the risk of the market if the upside is taxed by 45%!). Losses are deductible until won back.Luckily/wisely I kept enough of my money away from the stock market to still be able to live off that money for many years to come even after the money lost. And since I get taxed up to 60% on any job income I have, and my stock profits are not taxed until the loss has been won back, I set out to win back what I lost – and to do it myself rather than to trust someone else with my money. Having read more of Dr. Elders books and other trading literature, I decided that technical analysis and short term swing trading were best suited to my personality. I am actively trading and still learning, taking small losses and small profits. I am a perfectionist but have also done my part of mistakes (even stupid ones like placing the wrong order type!) that cost some but I am generally happy to be learning without it costing too much. Setting too tight stops are one of the things I am currently working on. A couple of recent examples: I shorted AIG and got stopped out just before it fell about 15% last week. I went long NYB on Thursday last week and got stopped out the same day. It went up 5% on Friday and 10% today. Doh!We have a saying here in Denmark (I don’t know if there is one similar in the US) that “Things take time”. And I’ve found out that learning to trade with consistent profits is just one more proof of that saying. But, if trading was so easy, there probably wouldn’t be so many people with a day job.As a new trader I have been through a lot of indicators, “played” with the settings of each, read numerous blogs and trading sites, back-tested different ideas of my own for automatic trading systems etc etc. And after a little less than year at it (part time), I have ended up with less than “five bullets to a clip” and no automatic systems that work consistently and with comfortable drawdowns. Thanks Alex ? And – besides SpikeTrade – I only read John Murphy’s newsletter (Market Message) and a blog called MarketSci. Everything else has been scrapped which makes trading a lot more simple, but I also feel that I had to go through all those things indicators etc. for my education as a trader – to find out what works for me and what doesn’t.Besides being a big fan of Alex’s books, another book I’ve really appreciated this year is Brian Shannons “Technical Analysis Using Multiple Timeframes” where he shares many of the same views/approaches that Alex has, plus a few others that – at least to me – have been very useful on top of what I learned from Alex.I’ve also learnt that trading is fun (and intellectually challenging) as long as I don’t sit in front of the screen all day and every day. To me, Michael at MarketSci actually hit the nail pretty well in a recent blog post; Wasting a good life trading.As you can see (if you’ve followed me all the way here and have not been bored to death by now ?) my education in trading the markets is ongoing – and I am not expecting to be done learning anytime in the near future. So to move on a little bit in my development as a trader, I have 3 questions to Alex/Kerry/Spikers/Members. Here we go:

1. Force Index:Do divergences between a price rally and Force Index have to cross the zero line to the negative side to be valid (like breaking the back of the bear in MACD-H)?
2. Trading MACD-H divergences against general market direction:Alex has written that MACD-H is one of the most powerful signs in technical analysis. If it really is such a powerful signal, should one trade negative MACD-H divergences (i.e. short a stock with such divergence) seen on a daily chart when the general stock market trend is up?
3. Is this a bearish MACD-H divergence?I wouldn’t usually look for divergences on 30 minute charts, but this example is from a 30 min chart of Stec, Inc. during October. The stock now trades at $12, so quite obviously it wasn’t a long lasting bearish divergence – if one at all.

MACD-H made a high on Oct 14th, ticked down and then back up on Oct 15th. Then down again and up a couple of times to almost reach a new high on Oct 19th. Now, is there a bearish divergence from Oct 14th to Oct 19th or does it not count as such because of the few small upticks in MACD-H on Oct 15th?Thanks for reading and I hope that you will help me by answering the questions .Best regards,Rasmus

“This question comes from David C, an active SpikeTrader – Alex” I have a question for the group regarding Entries. I have been having difficulty lately making the decision to pull the trigger on certain types of entries. I realized I don’t actually have a sound methodology/logic. I am curious as to what others do in these situations: I will give you two examples using Buy Stop Limit Orders:

1. Gap Moves – Stock ends Friday at $29.90 with a high of $30.0. I place a Buy Stop Limit Order at $30.01. I believe the stock is ready to move higher. On Monday it gap opens at $30.50 and continues to move higher. What do you do?On the one hand the stock is doing exactly as you had hoped, but on the other hand, how long do you wait for a pullback, what criteria do you use, and if it pulls all the way back to $30.01 do you still want it?
2. Failure to hit your Buy Stop – Price never gets to your Stop, it either declines or remains flat. I have seen some Spike members pass on this trade altogether, but sometimes they buy at the lower price. I realize both answers may be correct, by I am confused and would love to have more color on this.On the one hand, you bought the stock you wanted at a better price, but on the other hand, if you saw this type of price action on Friday (before you placed your order) would you still want this stock? And I know you are probably doing your best with your one and only Spike pick for the week, but would you change any decision for your personal account?

Of course the goal is to make the trade if the probability is still in your favor. I have closely followed the Spike group for a few months now and sometimes they take the trade and sometimes they do not.What criteria do others use in these instances? Personally, I have had several trades this week that gapped up on Monday and I did not make an entry. So far, they have gone on for much larger gains on Wednesday and Thursday. Last week a large gap down on Monday cost me 10+% on my SpikeTrade pick. I had believed that most of the time the gap is filled sometime during the day, but this was not the case with any of my selections. I had to decide whether to chase and for now I just watched.Appreciate any responses.David C

I am a new Spike member and am viewing videos in the vault. I’ve just watched Jeff P’s presentation on how he selects his Spike pick every week, and I wanted to know if he or any other Spike member could or would recommend a stock screening tool that would screen stocks as his would as he described in his video presentation.I use Qcharts.Thank you,Lynne B

I recently reviewed John T’s presentation to the Spiker Group. In his presentation he touched on a stock scan using MACDH Divergences and New High/Low criteria.I have been attempting to create such a scan in Trade Station for several weeks to no avail. I have searched the TS support forums and tried to copy and paste code but my proficiency level is sub par.Are there any TS Spikers who can assist me with constructing such a scan? If so, I thank you in advance and will look forward to reading your reply’s to this post. And thanks to John T’s presentation and drawing attention to this scan. Otherwise I would still be (and continue to be) a student of TS programing code.Regards,Danny B