It's not rocket science

[tulip]

'Tis possible to make money in a Bull Market, a Bear Market and a market going nowhere.


Using very simple T/A, identify stocks in a "sustainable" uptrend. That should not be too difficult an assignment. We tend to make things far more complex than necessary. It seems to me that some people evaluate the effectiveness of a T/A indicator or combination of indicators based on the degree of difficulty to "master" them and correctly interpret them. Ten million trees have been cut down to provide the paper for experts to describe in their books how to use T/A to make your fortune. How many books have been written on T/A? Even a broken clock is correct twice a day. Look through the smoke an dmirrors on T/A and stick to simplicity.

Check out the financials, look for strong cashflow and profit growth. Look at the quality of the management. For confirmation look at whether successful investment companies are increasing their shareholding, or whether directors are buying. Keep it simple.

Listen to the Market. Have a stop loss in place. No matter how certain you are that you have selected a good stock the market has a habit of making a fool out of you. You are a winner if you can cut your losses and evaluate your losing transactions.

Simple! Even in a bear market there are opportunities, you don't ever need to look for bargains.

 

[tech/a]

Tulip.

Sound basic principalls.

Buy in a trend ---fine---if it turns against you you have a stop---fine again.

How wide is the stop?
More importantly when do you exit?

Would you agree that you "Cant go broke taking a profit"?

It certaintly isnt Rocket science thats too simple most who study it actually pass it.Yet 97% who become involved in trading fail!----some are Doctors,Rocket Scientists (Have degrees or doctorates in physics) or dumb asre builders like myself.

I certaintly agree with you.
Humans have this amazing ability to turn the most simple into the most complex and think that the more complex it is the better it must be.

To those people I say.

Breathe in---------- Breathe out------if existance is that simple why complicate everything else in life.
(Mind you there is a simple answer---"Because Im a woman!!" They think differently dont they!).

tech

 

[Stockcaddy]

Agreed with every point made in this post...It's amazing how easy the market becomes after a little education and a sound trading plan sticking to enter and exit criterias, etc...

Not hard in my case due to the fact the sotware I use i can set alarms for favourite stocks to basically stop the accumulation stage and begin the ascent phase, it is as simple as waiting for the sell orders to deteriate isn't it.

Basically the best tip is make sure you

1. The right tool - software
2. Education ( 1 on 1 )
3. A sound trading plan, stick to criteria
4. P/trade (implement strategies, mistakes don't cost)
5. Professional ongoing assistance

I'm sure alot of people will agree so first of all if you haven't got one of these then you need to take action to improve correct...

Take care

regards

Daniel - stockcaddy

 

[tulip]

“Stops”.

1) I don’t buy a stock on a whim, the stock must meet sound criteria. Therefore I am confident, extremely confident that I have at the very least, a resilient stock. At best one that will continue on it's merry way. I have strong expectations on how that stock should behave. I accept the rythmns of the market, I accept “fundies” need to sell and directors sell without reading too much into it. But if the stock does not trade as I expect, without any obvious explanation I’m outta there. I accept the market decision at all times. In the case of a well researched stock (T/A & F/A) I sell when the chart tells me something smells. I do not have a stop loss.

2) I’ll sometimessometimes buy a stock that anyone could see has broken out big time, massive rise, massive volume, massive strength for a short term (days to a couple of months max.) trade. I have charts of stocks that meet criteria such as these, and I know all the twists and turns that can take place in these types of stocks after they have met my criteria as a buy. In this case, whatever you think will happen, wont! I could not suggest what an individual stock will do, but I am confident enough to know that over a short period of time the profits will far exceed the losses provided I ride out the emotional buying and selling, unless of course an early Christmas present is staring me in the face. Again, I set no stop loss. I know I can lose a decent whack on one stock.

“Can’t go broke taking a profit”.

I think I know where you are coming from. My criteria for buying stocks doesn’t lend itself to tight stops and lots of little profits. I accept the market will prove me wrong and I’m prepared to take my medicine.

 

[tulip]

stockcaddy, what is it that you are trying to sell. Have you personally been successful trading in a market that is in a downtrend? NO? There would be many successful strategies flying around over the last few years, throwing darts is as good as any. Any fool could have, or should have made money in this market.

Theory and backtesting and statistics count for nothing unless you can actually recreate the exact market conditions at any point in the past to prove your strategy.

 

[tech/a]

but I am confident enough to know that over a short period of time the profits will far exceed the losses provided I ride out the emotional buying and selling, unless of course an early Christmas present is staring me in the face. Again, I set no stop loss. I know I can lose a decent whack on one stock.


So this is a Theory?

“Can’t go broke taking a profit”.


Do you agree with that statement?


My criteria for buying stocks doesn’t lend itself to tight stops and lots of little profits.

But how do you exit?You seem to have the entry down pat but all at sea with exits.


Again, I set no stop loss. I know I can lose a decent whack on one stock.

Fine but how do you define our risk?
If you know you can lose a decient Whack on a stock why dont you limit this possibility? Lets face it if your entry is spot on then the Stop wont ever(Rarely) be used!
Do you know your win rate?
Do you know your initial Drawdown?
Do you know your Risk Reward Ratio?
Do you know your maximum string of losses?
Do you KNOW your profitable and if so How?

Not critisising just asking you to THINK a little before you dismiss the simplisity of Trading Profitably purely on a good ENTRY, frankly I can prove entry has very little to do with profitability.
ALL novice Traders are CERTAIN thats where the profit lies---ENTRY.

tech

 

[tulip]

Tech/a, I don't see you with the difinitive exit strategey. All I see is you stuck absolutely on a method tested over a couple of years. Wooppee Doo!

Maybe you should step back a little from your tutorial style (I can highlight too!) and actually listen to others' points of view. My exit strategy is based on AVOIDING emotional selling which stop losses will expose you to. As I said very plainly I get out when the market tells me something is wrong. If your small, narrow mind needs that in some mathematical formula then here it is.

7,15 - 6,21,3,11 - 25,15,21,18,19,5,12,6 !

I refuse to answer your self serving, egotistical, ALL KNOWING questions.

 

[tulip]

Two questions for the Tech/a.

Say you had bought EPR for 11c several weeks ago. What would be your exit strategy and why?

Say you had bought LIP on Monday 24th Jan for $2.53. What was your exit strategy and how would this help?

 

[tech/a]

Tulip.

Fine sorry I butted in.

In answer to your question.

EPR I wouldnt trade a chart like that.But had I bought it 3 weeks ago Id still be in it.I cant see a reason to sell it at this point.My stop would be 9.7 cents below the resistance at 10c.I have no idea of R/R expectation here but would feel that 19c wasnt out of the question,giving around 7:1

LIP happens Ive had worse(delisted) but had I bought this----then this would have been the maths.

I run portfolios with $10k position sizing(10 in a portfolio) so Id have had 4000 of these Id have sold at around $1.70 when it was obvious the sheet had hit the fan.
Thats a 70c loss or $2800.
2.8% of initial equity.
I trade mechanically but Im sure you know this!

Well done carry on.
Ill see what I can learn.
Look foward to your next piece.

tech

 

[tech/a]

Tulip.

Fine sorry I butted in.

In answer to your question.

EPR I wouldnt trade a chart like that.But had I bought it 3 weeks ago Id still be in it.I cant see a reason to sell it at this point.My stop would be 9.7 cents below the support at 10c.I have no idea of R/R expectation here but would feel that 19c wasnt out of the question,giving around 7:1

LIP happens Ive had worse(delisted) but had I bought this----then this would have been the maths.

I run portfolios with $10k position sizing(10 in a portfolio) so Id have had 4000 of these Id have sold at around $1.70 when it was obvious the sheet had hit the fan.
Thats a 70c loss or $2800.
2.8% of initial equity.
I trade mechanically but Im sure you know this!

Well done carry on.
Ill see what I can learn.
Look foward to your next piece.

tech

Opps a change made in the above.
The highlights were /are made for easier reading and making a point.Think they are great.

 

[tulip]

So your stops are not the panacea to all ills on the market and perhaps there is room for a person who uses discretion?

 

[tech/a]

The occurance you have shown is indeed rare.
Stops are for the other 99.99% of trades which dont have those type of reactions.It does happen and it will happen.

We certaintly differ re stops but if it suits you to trade without stops Im not going to attempt to alter your opinion.

You know if you trade profitably I have no idea.
I know my methodology returns + 100% gains and its public record.

Im happy with mine and just as happy pointing those who dont have those returns in the direction I travelled to get there.

If your happy with 10% or your getting 1000% fantastic.
Again my apologies I thought you were looking for some direction.
My mistake.

Tulip if you can call ONE move like LIP even a day before it happens,using "Direction" or tarot cards I and the whole trading community will be very very impressed.
Your claiming then to have a skill beyond mere mortals.

I wait in anticipation of a demonstration of "Directional Trading"
Im up for learning.

tech