thought i would throw some thoughts around........... it's taken...

thought i would throw some thoughts around...........

it's taken me a while, but I'm finally getting some good results with trading....so first persistance pays off, but not just persistance, as u can persist untill the cows come home, and nothing will happen, as you need to learn as well.

First thing....be very wary of learning from folk that write books and teach. Many do this as they are good at charting but poor at trading. One of the very real problems I come across time and time again, is getting shaken out of a trade before it really skyrockets leaving me behind so that I then have to chase. Many stocks do it. I have not seen one book that addresses this real world problem so I really wonder if those that write books really do trade. They seem so academic. So pure. Trading isn't.

So what to do.......

I always try to understand the fundalmentals of a company, and one thing I do over and over again is to record their market cap at the top of their run. Over time, this gives me a better feel for a target price than charting alone. If you go back and check the brains trust thread....last year I gave a target based on my observations over time of what SMN may get to if the news was good. $120 million.....or about $1.20/share.It reached it. The current hot stock PSF, based on my observations of similiar stocks (ZIP etc) gives me an idea that PSF should at least get to minimum of $100 mill or .04c a share without too much trouble...which is roughly double from here. By recording these market caps, is what happens over time you get a 'feel' for where stock should go to. It also does something else, and that is, it takes the pressure off sole charting analysis, and helps you 'balance' a real fundalmental stop from a chart based one...and consequently allows you to stay with the trend, which is much easier and psychologically less damaging to trading, than trying to analyse bar by bar.

The other thing I constantly do is that I always annualise my returns. What goes up 10% in a week, annualised is 500% per annum. A monster return. Although I don't base any trading decisions on this, it at least puts the trade in perspective, and gives me a clearer picture of that trade.

You need to put as much in your favour as you can. It's the trading that is far more important than charting.

Another very important thing is I notice, so, so many on hotcopper trying to pick the bottom. That chart of NWZ...I would never, ever, try to trade that by charting. It's in a solid down trend. It's a no-no. I have a saying that I use on every stock and that is.....If it went down last week, and it went down the week before, and for matter the month before, than what's the bet it will go down again. Stay away!

I will though make some exceptions. But they are fundalmental ones. Something I know about the value of the stock or a price catalyst like a positive company development. But it is not chart based.

You have to remember your goal is to make trading enjoyable. Fun. You want easy dollars, not hard pennies, as one well known trader puts it. Far too many here try for the hard pennies and by doing so they miss the really big dollars. It eventually leads to mediocre results, a lot of hard work, and no enjoyment. Don't let it be you.

OK....as usual I have run out of time, I was gonna post a bit more, but maybe later.....

Let good trading be your goal....not good charting.






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