Short term - knowledge library 1.0 (This thread is READ ONLY.... No unauthorised Posts), page-57

ST Trading Strategies: Part 2​

webbj
Date: 24/12/15
Time: 21:48:56
Post #: 16684909

…………………. Perhaps more importantly what I have learnt, from the back of my notebook here are my scrawled reminders..

• Don't try and catch the knife. similarly;
• The trend is your friend. Sometimes, its OK to set the trend
• Follow the money, sometimes options tell the tale first
• Get in early and don't get greedy when playing the shell game.
• How long can you wait. You may be right, but how long with your cash be tied up for.
• Liquidity is a killer. Dont get stuck in an illiquid stock or tempted by the 0.1c price tag.

Freehold
Date: 26/12/15
Time: 02:16:16
Post #: 16686545

………………..Key for new comers ... A lot (and I mean a lot) of research ...find the "massive" FA stories for the year (read enough stocks day in day out and they glow like red hot beacons) and buy large early sell on trend break (if your cautious) for safety IMHO ... I review 10- 20 plus filtered stocks in detail day in day out 365 days /year ... come hail of shine, or rain. But my performance is "poorish"... relative to some of the "super stars" here on the STT thread. There are "many" tipsters on the short term threads who will make many % multiples of their portfolio each year. Which literally blows me out of the water. Find those stars, follow them religiously and learn from them ...at the very least understand what they do and how they do it.

So success lies with "being rigorous and thorough... leave no investment stone unturned" and if you have "enough" starting capital, and your systems are in place and tested thoroughly you may just win lotto occasionally (or regularly some here will do it multiple times year). Does that sound excessive for a retail trader ..Its not .for the top tier traded IMHO

Get organised ...and just maybe you will get into some "major" profits. Don't be arrogant and think you've just arrived and you know better than everyone else here on STT threads ("You Don't"). If you add up the experience of all STT'er posters there's "1000's" of years of collective experience. Pride /Bravado/Arrogance will seriously hinder you financial ascent. What might take you 3 years will take you 10.


So some Xmas advice to those hating there 9-5 life... It is possible to earn a living trading... Yes absolutely. But its not all beer and skittles, its not random it just doesn't happen overnight , maybe 1 - 10,000 might get lucky and pick a super star stock 1st tradeand make a huge profit , but very few (single digits) can repeat it regularly .

That saying of "Preparation meeting opportunity" is 100% true in this context. If I had my time again I would not trade for 1 or 2 years just follow the guru's, learn what they do .... Then start trading ... To be honest paper trading is OK but it comes with no emotional attachment.... and its the emotional side of things that needs to be mastered. The bigger the % of you portfolio risked larger the emotional rollercoaster you are strapped into. Emotional stress will interfere with clear objective thinking ... Emotional decisions will be your downfall ... remain "Rational and objective" for as long as possible……………


moesoeloe
Date: 05/01/16
Time: 18:32:25
Post #: 16733728

I learnt the same lesson once and will never fall for it again

Never sell on open when there is huge volume dumping on open... because it will in most cases cause traders to jump in and then rallies higher.

In this case 66.8%


herbalist
Date: 22/01/16
Time: 22:56:48
Post #: 16854339

Only experience can tell you what is your best style. I am a deliberater, rather than a spontaneous person and I think that reflects itself in my trading style which is very fa based. I couldnt cope with the high speed dt style of trading. Its not in my nature.How do you know when you have found your style? not necessarily just by profit but more by being relaxed and confident. (although the two tend to go hand in hand).
More and more i think most important is you need to be positive and have self belief.

Dont overtrade. sometimes its better to just do nothing. dont trade when not in the right frame of mind. wait for the overwhelming opportunity.

Accept managed losses as part of the game. believe that you will recoup them in time rather than chasing more risky investments to recoup quickly. If you manage your losses and let your winners run then you only need to be right half of the time and you will still end up well ahead.
Every entry should be made after consideration of what you will do if the trade goes against you. What is your tolerance and exit strategy. Too many think only about the upside and dont have a strategy to the downside. Consider that before you consider where you will start to take profit.

At this end of the market dont think you have found the one that will make you rich and overcommit to one or two shares.

Dont chase, wait for consolidation either on uptrend or retrace and dont buy on down trend wait for clear support.
A 50c share that goes up 25c is still up 50% usually with much less downside risk than a 3c share going to 4.5c.
You dont need to be on a share before the concept is proven/company is profitable to make reasonable gains. often safer to wait till substantially derisked.


kmac
Date: 23/01/16
Time: 13:30:56
Post #: 16855959

On the theoretical side need to mention one of the best books I've read on learning to ID your own style and trade successfully. "Trade Your Way to Financial Freedom" by Van K. Tharp. He's a psychologist by trade - but don't let that put you off! (also a trading coach). He leaves no stone unturned in order to direct you towards the type of trading which suits your personality. Covers our judgemental/psychological biases, how to set objectives and develop a system that works for you, then analyses setups, timing,costs, risk factors, position sizing. Now some can probably do it without in depth study or reading but I've always got to dig a bit deeper and found this book the best source. Here's a few highlights;

- Risk control requires "tremendous internal control" - each trader controls his or her own destiny - so success depends on how self-controlled you are. ( Herbalist considered that "only experience can tell you what is your best style", which is true, but am sure most of us have some idea of our own personality type/risk profile in order to ID in advance what could be your "best fit". Experience will be the harsh teacher if you get it wrong)
- Lots of ppl go thru stages in trading of buying and selling what someone else does or tells them to, but its necessary to find a trading system right for you.
- To unlock the "Holy Grail" you need to understand and appreciate your own unique abilities. Finding yourself, achieving own potential and getting in tune with the market. (Herbalist "relaxed and confident")
- Most successful speculators have success rates of 35-50%. They are successful because the size of the profitable trades far exceeds the size of their losses - and that's needs "tremendous internal control"
- So you need to learn first 1. the importance of exits to your profits, 2. the importance of position sizing to your equity, 3. the importance of discipline to make it all work.


moesoeloe
Date: 26/01/16
Time: 19:24:28
Post #: 16871327

In the beginning my methods were a joke, buy and hope… when stocks went up i didnt take profit and they went down i sold.. and everytime i was on a good stock when there was a decent shake out.. i was one that was shaken out. I ended up losing most of my trading capital and then took a step back for a couple of months and started making a trading plan with strict rules. These rules differ for everyone and depend on your trading style. The ones that have helped me the most are trailing stop losses, not chasing stocks after the best part of a move, locking in profits and double checking facts (thanks to rampers lol). Along the way i also studied technical analysis alot which has really helped me develop the ability to pick stocks before they move, in addition to bottoms and tops of moves.

I trade using Technical and Fundamental Analysis together. With regards to technical analysis, the first things i look for are support levels and resistance levels, charting patterns, analyse the volumes and trading ranges. I will then look at the stocks fundamentals; first i look at the most recent 3b and check the correct market cap, next i look at the most recent quarterly to see how much cash is in the bank and if they need to raise cash. Then i look to see if management own any shares.These are pretty much all i use to analyse stocks to trade, but i do also follow the day trading thread most days and find alot of runners and stocks breaking out on there.

I have lots of different watchlists that i have developed and organise and keep updated. For example shells, day trade potentials, short term trade potentials, medium term trade potentials. Its alot of work keeping these updated, processing alot of information quickly and continually analysing them but thats one of my strong points. For example i pretty much know which stocks in my watchlists need to raise cash soon just from memory; and i tend not to trade these until im happy that i wont be holding when a CR is announced.

……………But if there is one thing to take away from this; its back yourself to succeed, because no one else will!


gamefisherman
Date: 30/01/16
Time: 14:13:11
Post #: 16903512

The pic below shows the % loss taken and shows the % needed to recoup from a unprofitable trade. I have seen this pic a few times over time posted in the HC threads, so not sure whom first posted it, but it is rather telling. That pic is the exact reason why I work with High Value Actions. In other words, everything I do is pre-determined as much as it can be.

1. I look for a trade and when I find a potential candidate, I will add it to a Word doc as a chart (at time of getting ready to act). All DD has been done by this time and that has also been added to the Word Doc
2. I will work out the risk reward, and write down my entry price zone and intial price target zone in the Word Doc.
3. Depending upon the liquidity of the stock, I will either average in to get a feel for how it is being traded, or will load up with my full quota.
4. Risk reward is worked out and added to the Word Doc, that includes the price zone that I will only buy at, and my initial price target zone.
5. As soon as all the conditions of my TA are met, the trigger is pulled and my stop loss that was already worked out and noted in my Word Doc is locked in so there is little chance of losing major capital. On a handful of occassions each year I will be gapped down through my trade, mostly at open on either the day after entering, or within the next few days of entry. As trading is my living, my eyes are all over my screens and my hand ready to pounce when certain results occur, that is one of them. When my losing trade is stopped, I then add the chart at that time to the Word Doc. I will either re-enter a trade up to 3 times, and if it doesnt workout, I will move on.
6. As I have faith in my trading plan, my losses are viewed as mentioned as just a cost of doing business. Sometimes I will have a losing run, so to speak. When this happens, to keep my mind focussed, I will go back through my trading plan and see how it worked on previous trades and look at them in a Word Doc. Of course I find it frustrating, who wouldnt, but being able to keep emotions in check is pivotal.

I am a big believer in we tend to learn from what we see. I know that my trading plan works, so I know that as long as I stick to it, winning trades will return.

Trade mindfully ie be aware of your own self talk when taking a loss as this can also have a pretty big impact psychologically, without you even knowing it often. It took me years and years to become able to trade mindfully and is something that I know that I have to check in with myself quite often and will have to do so in the future.



952i
Date: 30/01/16
Time: 23:12:28
Post #: 16905696

……………….. It began here in the STT where I asked what are good books to read, "how I made 2million on the stock market - Darvas" (thanks @Freehold) and "Technical analysis of financial markets - Murphy" were suggested to me. One book sparked interest more and more and soon enough one book lead to reading another and another.
Now recovering back my losses from my gambling period on the market tossing money on everything. Personally from my short 2year experience in the market - Greed and ego are the two biggest killers of profits. Looking back most of my losses were from Greed (have 50% profit become 10% profit cause I held to long ) and ego (no stop losses and "hoping").
Needless to say, I still have a long way to go with alot more learning. Second you think you know enough you start seeing red again.

On the theme: Watch Mark Douglas's trading psychology or read his book. Talks all about taking losses and exits will actually change the way you perceive losses.
Summary:
- Markets are often random and you must accept this, sometimes no matter how good TA/FA looks it can easily turn against you just recently I had that with RNT, spotted an ascending triangle which didnt end up breaking upwards but went down instead. Accepted it and moved on(cut my loss quick) rather than hoping for a turn.
- Study has shown if you keep tight stop losses and throw money at random stocks you have never even heard you can make still make profit.
- One of Mark Douglas's successful traders had a win rate of 3% but still made huge profits cause he quickly exited 97% of losing trades.
- If your paper trading is showing more profits than your real trading its a 100% indication your trading psychology needs to be changed.

Also a friend of mine suggested printing your rules and sticking it beside your screen each time you trade. Its worked nicely for me.
Here's a screenshot of my set see if it helps at all




nihilism
Date: 13/02/16
Time: 16:26:00
Post #: 17012743

Charting and fundamental events should not be mixed so that one can explain inaccuracies in the other... they should remain separated or else your own opinion of the news will bias your chart.


edit: the reason I say this is charting is a predictive tool. If you are relying on events to explain the problems in the chart, it becomes useless as a predictor and is only good in hindsight.

………… (from follow-up post, a day later)

……..…The major point I'm trying to make is that using rationalisation of events after the fact to say your chart was correct will not help you predict the future movements, in fact it will harm you because you will.keep making the same charting mistakes and believing you were actually correct.


Freehold
Date: 07/03/16
Time: 12:12:59
Post #: 17205513

... It's almost never a good STT strategy to buy into a Spike like this unless of course the news is spectacular and the MCap is tiny... So yes best to leave it for the Novices/Day traders to wrestle with and if you still interested then pick up the pieces in a few days. As a STT'er a common and valid strategy is to scavenge winning trades from ill informed or inexperienced D'traders who have taken emotional based decision to enter and the wrong time.


mitta
Date: 20/03/16
Time: 15:09:16
Post #: 17321701

here is some more in depth look at working with different timeframes.. as explained below would start on the higher timeframe and then work down.




Endless
Date: 20/03/16
Time: 15:31:48
Post #: 17321787

Rules of trading.

1. You need to have thought it thru enough so that you have system which is based on things you understand. If you are just buying stocks cos you think everyone else is buying that stock then you will get whacked before too long.

2. Winning trades are great but it is the losing trades that will kill you. Stop loss. Don't buy at the top. Don't chase.

3. If you don't know what you are doing, do some reading and educate yourself before you start.

4. Trading is hard and it's not for everyone. There are better ways to make a living imo. It can be very time consuming and that is the main drawback imo.


marty386
Date: 20/03/16
Time: 15:34:37
Post #: 17321802

Patience on the way up is the only patience you need.
Patience on the way down is overridden by a stop loss.


telamelo
Date: 26/03/16
Time: 10:07:36
Post #: 17363372

TRADER PSYCHOLOGY

1. Be flexible and go with the flow of the markets price action, stubbornness, egos, and emotions are the worst indicators for entries and exits.
2. Understand that the trader only chooses their entries, exits, position size, and risk and the market chooses whether they are profitable or not.
3. You must have a trading plan before you start to trade, that has to be your anchor in decision making.
4. You have to let go of wanting to always be right about your trade and exchange it for wanting to make money. The first step of making money is to cut a loser short the moment it is confirmed that you are wrong.
5. Never trade position sizes so big that your emotions take over from your trading plan.
6. "If it feels good, don't do it." – Richard Weissman
7. Trade your biggest position sizes during winning streaks and your smallest position sizes during losing streaks. Not too big and trade your smallest when in a losing streak.
8. Do not worry about losing money that can be made back worry about losing your trading discipline.
9. A losing trade costs you money but letting a big losing trade get too far out of hand can cause you to lose your nerve. Cut losses for the sake o your nerves as much as for the sake of capital preservation.
10. A trader can only go on to success after they have faith in themselves as a trader, their trading system as a winner, and know that they will stay disciplined in their trading journey.
--Bring your risk of ruin down to almost zero.
RISK MANAGEMENT

1. Never enter a trade before you know where you will exit if proven wrong.
2. First find the right stop loss level that will show you that you’re wrong about a trade then set your positions size based on that price level.
3. Focus like a laser on how much capital can be lost on any trade first before you enter not on how much profit you could make.
4. Structure your trades through position sizing and stop losses so you never lose more than 1% of your trading capital on one losing trade.
5. Never expose your trading account to more than 5% total risk at any one time.
6. Understand the nature of volatility and adjust your position size for the increased risk with volatility spikes.
7. Never, ever, ever, add to a losing trade. Eventually that will destroy your trading account when you eventually fight the wrong trend.
8. All your trades should end in one of four ways: a small win, a big win, a small loss, or break even, but never a big loss. If you can get rid of big losses you have a great chance of eventually trading success.
9. Be incredibly stubborn in your risk management rules don’t give up an inch. Defense wins championships in sports and profits in trading.
10. Most of the time trailing stops are more profitable than profit targets. We need the big wins to pay for the losing trades. Trends tend to go farther than anyone anticipates.

--Develop a winning trading system that fits your personality.
YOUR ROBUST METHOD

1. “Trade What's Happening...Not What You Think Is Gonna Happen.” – Doug Gregory
2. Go long strength; sell weakness short in your time frame.
3. Find your edge over other traders.
4. Your trading system must be built on quantifiable facts not opinions.
5. Trade the chart not the news.
6. A robust trading system must either be designed to have a large winning percentage of trades or big wins and small losses.
7. Only take trades that have a skewed risk reward in your favor.
8. The answer to the question, “What’s the trend?” is the question, “What’s your timeframe?” – Richard Weissman. Trade primarily in the direction that a market is trending in on your time frame until the end when it bends.
9. Only take real entries that have an edge, avoid being caught up in the meaningless noise.
10. Place your stop losses outside the range of noise so you are only stopped out when you are likely wrong.

www.traderplanet.com/articles/view/165953-30-great-trading-rules/

======

ASSAD'S RULES OF TRADING

Trading rule No 1. Never chase. Forget about the Dollar loss for a moment as the real damage comes from the distraction it creates.

Trading rule No 2. Wait for the break. Most traders buy inside the range, get impatient and as a result they sell on first sign of strength which ends up being the breakout.

Trading rule No 3. Don't ride the ticks and Dollar profits. It creates emotional turmoil and is draining. Prevention is best cure. Takes the fun out of the game.

Trading rule No 4. Price action trumps everything. Management lie or mislead but price action (money flow) never lies.

Trading rule No 5. Sell the news or a least sell partials. Markets discount everything and over the long run you will be better off.

Trading rule No 6. Always stay in control. Do NOT put yourself in news related coin toss trades, where the risk cannot be managed.

Trading rule No 7. Mind your own business, avoid conflict. If you take offence because someone has disagreed with your trade, then you are such a precious little petal.

Trading rule No 8. Do NOT set targets as all this creates is a premature EXIT. Run a trailer and let that take you out.

Trading rule No 9. Minimise whipsaw at all costs. It's a trader killer. The root cause of trading failure more often than not, starts with whipsaw.

Trading rule No 10. Do NOT buy stretched breakouts. More often than not they recoil back into the range to flush traders out.

Trading rule No 11. Start with long term charts and look to catch major breaks/moves. These tend to follow through and it makes it easier to run with winners.

Trading rule No 12. DO NOT trades Forex short-term. It is a mugs game, news driven by central banks. It is like betting on the greyhounds.

Trading rule No 13. Turn trading rules into habit. There is no point in having trading rules if you dont apply them!

Trading rule No 14. And the most important; only tell your wife about your losers.

Trading rule No 15. Hit those stops, no questions asked. Hitting your stop and watching a stock rally hurts but not htting your stop and watching the stock fall hurts a hell of alot more.

www.asenna.com.au/asenna/node/34842


Freehold
Date: 01/04/16
Time: 23:21:45
Post #: 17405658

Hibi,


You wrote (http://hotcopper.com.au/posts/17404871/single)... "...Some of you are aware about my quest for 'perfect buy' strategy - being able to buy at a price that we can reasonably believe that it will never retrace to. This is important because, if one could do this consistently, that person could leverage their position to make any low volatile markets worth their money. ..."


You can fudge this entry which does not get revisited... but rather that a Entry that does not get revisited I like to think of a avg entry price that does not get revisited. Heres how, sniper entry with a pilot buy ... On rally attempt to sell half into the spike ... your avg cost is now much lower depending on how high on the spike you sold. Wait for the retrace to run its course and for support to enter ... now load up in with a bigger parcel ... This will raise your avg price but ensure you avg price is still well below the bottom of the retrace. Pyramid in early the same way in the 1st few legs of the rally ...ensuing to keep you avg price well below the bottom of the retrace.

The advantage is if successful you have a trade where the avg price never gets revisited ... Your entry risk is small .. 1st trade is the smallest "pilot buy" only. Upside if the trade works out can be massive.

In essence you have a Low Risk / High Reward Trade... Sure you might get stopped out of your pilot several times... but the profit when it comes could be enormous. .. I used this strategy with NOR was stopped out of pilot 3 times at around 2.7-3c ...4th time around trade timing was better and was able to achieve several pyramids in with relatively low avg entry cost and ultimate sold at 15.5c ... The end result was a trade where the ultimate profit was about 24 times the size of the loss incurred on the 3 pilot buys ...Although my pyramiding was aggressive my aver price remained well below retrace limit of prev rally ... Once I reached the point of taking 2nd trade the worst case scenario for me is break even.


Freehold
Date: 02/04/16
Time: 18:09:08
Post #: 17408109

It's not an exact science but to be successful will need a stock with outstanding FA story which is evolving

Step 1 - ID a Stock with truly outstanding FA .. I mean the best of the best

Step 2. Look for a pilot buy "Sniper" entry either straight after pivotal announcement or on downtrend break up or a break to new ST high (See sniper entry in the STT Library)

Step3. Wait for it rally and to go into considerable profit 50-100% selling the peak is not an exact science either but the key here is sell a % of your position as high as you can to lower your avg price... if it does not run far you will need to sell a bigger % if it sky rockets then a smaller % . Keep your avg price well below the 50% retrace level for the entire last leg of rally.. the lower the Avg price the more likely you are to have a successful trade. If the stock falls below your Pilot Avg entry giving you say a 10-15% $ loss then exit pilot and walk away ...sometimes we just miss time entries its a fact of life ... look for anew Sniper Pilot entry. Sooner or later you will get you timing right.

Step 4. Assuming you sold some of your position into the rally... wait for retrace ... When retrace looks like its exhausted/running out of steam (usually when low vol and/or smaller daily price range) and you see evidence of support entering (buyers starting to bid up the price) then buy a bigger parcel than the 1st keeping your avg price below the retrace low point of the last rally ... You can also buy a break to new ST high (another sniper entry) but that is more aggressive.

Step 5. Go to Step 3


Step 6. Ultimately you want to have your full planned position size purchased and in place by the time the 3nd rally breaks to a new high... Don't keep buying after 3rd rally as a rule of thumb ...

Step 7. Stop buying wait and start thinking about the FA of the stock ...is the market getting tired / exhausted by the story. The best stocks are where the story continues to evolve and getting better over several months and keeps punters interested and buying ... Define the overall TA uptrend since the start.

Step 8. Now you need to make a judgement call on when to exit again (again not an exact science)... Once you judge the FA "Sex appeal" to the market is starting to wain start selling parcels into rallies If you come in too hard on the sell you will scare off buyers so gradual staged exits are much better if you have the time (Mix you parcel sizes ie, don't keep selling 500k chunks repeatly as that will scare off buyers they will think a insto is selling )... If it now approaches the lower ascending trendline be on heightened alert...Remember it will likely break down quickly from trend ... Be the breaker not the chaser don't wait for someone else to sell down 1st . Remember you have a large position and it will take potentially several trades to exit so sniper exits are called for .... But consider bulk sell if lower ascending trendline is threatened

As a side note you must be cognisant of the stocks liquidity ... Ive seen folk take massive position in a stock that just has limited liquidity and then when they mistime the exit they have drive the price way down to exit which makes for a big loss or a smaller profit.


The above strategy can be used if you have $10k portfolio or $10m portfolio.. . just vary your pilot and pyramid parcel size to suit you portfolio.

All the above is only IMHO ... and a roughie guide to allow other to develop there own variant strategy. It works super well for me... But I am fairly disciplined trader these days ... IF your using your emotions to pick entires Peak tops and Troughs you will fail ... be robotic .


Freehold
Date: 15/04/16
Time: 17:14:15
Post #: 17516394

………. probably easier to explain it with 2 examples based on the same Pilot position...

Lets say I Pilot buy Stock XYZ 1m shares at 2c = $20k

Scenario 1 - Moderate 1st Rally

XYZ it Rallies 50% only so I sell half into the Spike ...so sell 500k shares @ 3c which make my avg price holding on 500k shares left a avg price of 1c ...so the stock now needs to fall below 1c before I incur a net loss ...Lets say it falls back to 2.25c and shows support so I buy more but this time a larger amount say 2m shares at 1.25c ... my avg is now 1.82c this below the lowest point of the retract... the stock rallies and I repeat the process..


Scenario 2 - Big 1st Rally

XYZ it Rallies 200% only so I sell only 200k shares into the Spike ...so sell 200k shares @ 6c (Only required to sell a smaller amount into spike) which make my avg price holding on 800k shares left a avg price of 1c ...so the stock now needs to fall below 1c before I incur a net loss ...Lets say it falls back to 3c and shows support so I buy more but this time a larger amount say 2m shares at 3c ... my avg is now 2.25c this below the lowest point of the retrace... the stock rallies and I repeat the process..


Scenario 3 - No Rally/Spike at all

Stock Falls 10-15% below entry of Pilot and no rally ensues .. then sell at a small loss on pilot. ..and walk away look for another entry the same stock or another.


Conclusion
So the higher the Rally the less you need to sell to reduce your avg price ... and Once you get past pilot stage ... (Time of 2nd buy and rally ) you do not make a loss as if it approaches you avg cost you sellout MUST SELLOUT ...hence Low risk but high reward especially if XYZ continues to rally gains can be massive and Losses tiny as the greatest risk is taken on the smallest amount ... the pilot buy...so look for stocks with outstanding FA that will run for weeks and months ..Get the pilot to stick and sit back and watch it grow. ..Outlined exit last weekend

Clear as mud Right??

...hope this helps

………………………..this strategy works best on stock with "super strong FA" ...if you have a wish washy Fa on a stock then the stock may only rally once then fizzle out and go down or sideways incurring many pilot buy failures and ultimately a negative overall result... you must find the best of the best stories early (ie stock has not run or has not run far)..…………………………….

The principal is fairly simple and effective ... and comes down to engineering your avg buy to being lower than your avg sell after all trading in that stock is complete...but with very low risk and high % gain.



pilsner
Date: 15/04/16
Time: 21:47:45
Post #: 17517999

The number 1 rule in the market is patience and there is always a right time to enter and there will always be another chance. Its whether we choose to buy on fomo or to wait that dictates if we put ourselves immediately in a strong or a weak position. To eliminate the weak position consider also averaging your intended position size into 3 separate entries during any retrace.

there are many ways to do it but my entry timing AFTER a breakout is purely based on retrace to support. This is timeless, ie. regardless of what timeframe you are ultimately trading your charts in. just go to a smaller timeframe and look for the following set ups.

Personally with TA I use Fib retraces and an overbought/oversold indicator, it requires maximum discipline to wait for entry to come to you but this video that @Ibza posted last year is the best example I could repost to give you a simple explanation to exactly how its done.

People who say fib is inaccurate or dosent work simply don't understand the basic rules of application as contained and explained in this simple video, it is single handily the most powerful entry and exit tool I have ever come across WHEN applied and used correctly with historical chart structure and an overbought/oversold oscillator.

if this does not answer your exact question please revert as "timing a buy on a breakout" has an infinite amount of possibilities by definition.

If you dont or cant use fib you can still apply the basic rules by roughly eyeing a charts structure. If unsure I always look to average in on the retrace to support and usually look to aquire a full size position (proportional to issue) 1 pip prior to the exact anticipated support. respecting stops on any downside daily closes. but allowing enough movement for any intraday spikedown shakeout. Main Rule is patience and let price come to you. If you miss out so what there are 10's of other hot dogs that will let you on.




Dazedandconfused
Date: 16/04/16
Time: 01:52:02
Post #: 17518837

Timing buys and sells.....

fwiw.... this is my opinion

If I want to buy.... I am happiest when I see a change in the volume. I don't think it matters if the volume has increased or decreased ... what matters is there is a clear change. I interpret that as a mood [perception] change on the part of the market. ... I like to see the change of volume precede the price reacting by at least a couple of days.

I am a big fan of candlestick charts. If I have timed my buy reasonably well I should be seeing the price improve after only holding for a few days. What I want to see is white candles ... these are candles where the close price is higher than the open. I like to see confirmation of a price rise in the way the volume is behaving... either the volume is rising also, or, the current volume is higher than the long term average volume. I don't like to see sudden rises or quick big percentage moves higher ... the reason is ...too many people get trigger happy and the increased volatility unnerves people. Stocks which rise gradually often rise more strongly and more reliably.

When I get agitated and decide to sell....

Again... number one indicator for me is a marked change in the volume. A stock might be rising on low volume and then over a couple of days the volume radically increases ... this puts me on alert... or it might be the other way around, high volume that drops off quickly. A clear change in the volume and the candles turning black... is when my finger hovers over the sell button. Black candles...the price can still be rising but the closing price is below the opening price... if that continues I will stay on board while the price is still rising but the moment I see the price flatten out I will sell.

There is always a mixture of black and white candles in a rising trend. I much prefer to see short-bodied candles with short wicks [top and bottom].


Anton Chigurh
Date: 19/04/16
Time: 22:38:12
Post #: 17548547

Not sure if this helps but someone asked what the elements of finding a 10-bagger were and I jotted a few examples down. Not all are FA relevant but might be of some use. Other than these, all I can suggest is:

# Do your DD (lots!) and then back yourself in, unless something material changes to prove you wrong
# Try and get in as early as possible to provide a safety net
# Follow mgmt's dialogue from qtr-to-qtr, year-to-year, assessing if they stick to promises/plans.
# Research the broader sector your company operates in, to check for head/tailwinds.
# Monitor your company's key clients in great detail - especially if your company has high customer concentration and would be greatly impacted by the loss of any one client.
# Check accounting methods being used, to ensure mgmt are not fudging numbers to paint a rosier picture than what operations would suggest. Understand figures such as impairment, DA and learn how to back certain figures out of an earnings result to give a truer reflection of how the company has performed.

imo, re: 10-baggers, pick:
- any miner with an upcoming drill program of some substance, in a non-hated sector
- any (I mean, ANY) shell.
- a micro/small cap, with low mc, with the potential to win significant contracts with large companies (e.g. TLS, Big 4 banks, BHP, RIO, etc)
- a micro/small cap, with low mc, with already decent revenue, less than 12 months away from +ocf and with a reasonable pipeline of tendering opportunities at-hand.
- a small cap with strong, early, earnings growth
- a micro/small cap, that has been founded-by or had join, a director/mgmt team, with a significant history of success.
- a fad stock, in the right place at the right time, with mgmt that have strong marketing (BSing) skills.

None of the above guarantee anything - especially a 10-bagger, but all can lead to one, with a bit of all important luck.


TheGladiator
Date: 22/04/16
Time: 13:15:39
Post #: 17578927

When I first started out trading I never really knew what people meant when they said you should have your own "trading strategy". Aren't you supposed to simply find a stock you like it and buy it? Shouldn't our only strategy be to make money? It took lots of hard lessons (or shall I call them losses) to figure out that there needs to be more than just finding a good stock. There are many great stocks that are expensive, so should we buy them? .... There are many hyped stocks, should we jump in on the hype?

There are many stocks in my list which I would love to buy but they just don't fit my criteria even though I think they are great stocks. Some of them run but not buying others has saved me many times as well.

So moral of the story is make sure you have your own "strategy" and sets of criteria which a stock must tick before you jump in..


Malaga
Date: 29/04/16
Time: 21:48:58
Post #: 17638560

One thing I could add is most money is made or lost on the day of a big announcement.
My rule is sell 50% on the day of an announcement. Watch the trading for first hour to see how market reacts. If unsure set a trailing stop loss.. Every time I have reacted and sold the lot the share has gone up next day. Every time I have thought wow that was great buy more the share has gone down.
Freeholds posts in entry are great starters.
Keep experimenting to find what works for you.


952i
Date: 29/04/16
Time: 23:30:41
Post #: 17639070

On the weekend topic: Trading Strategy

Interesting topic as I'm still in the process of building an STT strategy I like and am comfortable with. I had a nice DT strategy but moving onto STT as I realised how many bags I've missed by not holding.

I find STT far less stressful + fits my uni/work lifestyle. I think DT is still good every now and then for major breakouts.

For STT my strategy comes from 4-components:
1. Psychology
2. TA
3. FA
4. Risk Management

1. Psychology
I've got my psychology strategy written out for me. I think there is no black and white each person will have a different approach. Right now I'm teaching myself its alright to lose every now and then, still in early days and fiddling with the correct STT strategy so not having high expectations for myself is important. Although I still get mad anytime I get stopped out and have to take a loss even when its small.

2. TA
I had a good feel of TA in my head, but still found myself making errors. So I recently wrote up a step by step procedure for deciding my entry/exits from STT procedures. Sometimes I'll look back at a loss and think "damn why didnt I see that". So now its on paper less likely I miss something.

Background just refers to the historical chart at the current price.
Where as current price action refers to the price moving the last week or so



3. FA
I wont talk much about FA only cause the majority of posters on this thread are far more formidable in FA than I am. I think the more capable people can give insight on FA strategy they use, or use the knowledge library for ideas.

Usually my FA quite basically: Undervalued MC, Low EV, Peer comparison, Want the stock to be in a moving sector, Cash in bank, Good management team with low cash burn.
Two things I ask myself from FA perspective:
- Would you pay the current MC to buy out this company?
- I want to buy the company only if its heavily undervalued and has the potential to become overvalued. Can it reach over-valuation? (Even if I'm wrong about it reaching over-valuation it might reach a better valuation or fair valuation and I'll make some coin at least)

4. Risk Management
Quite simply: Stop losses + Position size. If I'm not 100% sure or feel like I might be letting FOMO get to me I drop my position size by 33%.

Right now my STT strategy in on sentence: 80% TA and 20% FA
What I would like ideally: 70% TA and 30% FA (aka I need help with improving my FA lol)



mouse
Date: 29/04/16
Time: 23:41:44
Post #: 17639107

My trading plane depends on why i'm buying the stock in the first place and also what the chart say's.

Catalyst stocks:

These types of stock's i buy normally just to sell on news, i don't care about what happens after as long as i make coin out of it. For instance, i had bought NWH weeks back knowing that an announcement was coming out and that it would make the SP move, today on open after the announcement i sold and didn't look back. Stocks are always best to sell on open IMO, and this type of play i don't stress if the SP comes back cos i know there an ANN coming

Then there is trend stocks:

Once a trend has been identified, i always go after the mid cap at the cheapest MC... The positions are large and the volume is there to manage it, if I'm right about the trend then i should bag which gives me the confidence and capital to go after specks.

VMC i entered in the low 20's just after DKO ran to 14c, only half but was pretty confidant with both so when DKO released the results i knew i had to get more VMC... Now day's i do my buying is always a Friday midday or afternoon, if the price has not come back but looks like selling then i wait till next Friday. For some strange reason i have noticed that Fridays are sell days.

The only times i buy outside of that rule is when a chart says it's supported or i notice a major retrace, any stock with a retrace after a run in a hot trend is buy IMO and even more so when the MC is cheap.

Selling on trend stock is a hard decision, it all depends on how hot the trend is. Normally i like to see between 3 & 5 bags on these plays and if I'm lucky i will see a few more. Always try to find a value on stocks as this is the best way to tell you where the SP could head too, easiest way to do that is compare it to others, have look at charts and see were others have tapped out at, translate the SP to MC and now you have something to work off, i then give a discount of 20% to the value as a buffer zone. Once it's in that zone then it's by by and on to the next one.

The only time i add to a stock is when i have bought half, the only time i buy half is when I'm unsure what the SP will do or the MC looks a little high otherwise I'm all in.

Let me know if you want more info


minoil
Date: 30/04/16
Time: 08:06:22
Post #: 17639831

mmmh, much prefer to break the rules...........however, i will not buy on an announcement........too messy for me.............and...........particularly with shells, that, i hope i have been in early...........sell at open on the announcement of a deal. Seen too many get a rush of blood, then get nasty...........safe profits.
Prefer to leave the announcement crap to the DTers to squabble over, and go looking for the next bus