# Take me under your wing V2.0



## pearcey29 (6 November 2018)

Hi, I am very new to this and was wondering if any one could help me by explaining 
what it means (in beginner lingo) and are there any numbers or areas i should be really looking at 

VALUE
*                             Company      * *Market* *Sector*
P/E Ratio                   12.17           16.31              13.24
P/B Ratio                   2.03             1.47                1.51
P/E Growth Ratio        7.42             1.55                0.72
P/S Ratio                   0.68             1.74                3.06

  Income
*                                    Company (%)* *Market (%)* *Sector (%)*
Dividend Yield                     6.2                    4.4                      3.6
Franking                            65.0
Tax Adj Dividend Yield        4.4                     3.0                       2.7
Dividend Stability               100.0                 91.7                     89.3


Risk
*                                      Company* *Market* *Sector*
Beta                                  1.13             0.93                0.90
Current Ratio                     0.95             1.59                3.74
Quick Ratio                        0.48             0.97                3.24
Earnings Stability               52.6%          49.9%            50.8%
Income Coverage               5.16             7.82               20.00
Debt/Equity Ratio              114.4%         28.7%            13.8%

Growth Rates
*                 10yr* *5yr* *1yr* *2yr Forecast*
Sales            --         --       7.0%
Cash Flow     --         --      -17.3%
Earnings       --         --      -10.7%     1.6%
Dividends     --         --        0.9%      -3.1%
Book Value   --      19.9%   30.8%


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## galumay (6 November 2018)

I wouldn't really look at any of that information, what is the source and context?
I dont believe its possible to be a successful long term investor by selecting businesses based on a group of metrics alone. That doesnt really imply any depth of understanding of either the business or its financial health.

EDIT - I missed your earlier introductory thread, it appears from that you are maybe more interested in trading than investing so I will step back from the discussion as its not my area of competence.


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## pearcey29 (6 November 2018)

galumay said:


> I wouldn't really look at any of that information, what is the source and context?
> I dont believe its possible to be a successful long term investor by selecting businesses based on a group of metrics alone. That doesnt really imply any depth of understanding of either the business or its financial health.
> 
> EDIT - I missed your earlier introductory thread, it appears from that you are maybe more interested in trading than investing so I will step back from the discussion as its not my area of competence.



thanks for taking the time to reply. Am i right in saying that trading is more of a short term buy low sell high multiple trades over a short time frame and investing is holding  shares for a long time while buying more of the same shares over time


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## Ann (6 November 2018)

pearcey29 said:


> thanks for taking the time to reply. Am i right in saying that trading is more of a short term buy low sell high multiple trades over a short time frame and investing is holding  shares for a long time while buying more of the same shares over time




Pearcey29, If you want to trade short term my suggestion would be to learn to chart. Once you can chart you will see certain levels for entry and exit points based on indicators which you can relate to.  There are certain chart shapes and price levels called resistance and support levels.

I use Incredible Charts they are a real pleasure to use. There is both a subscriber and free access. The subscriber gives you access to more indicators but the free access would be fine to work with for a while as you learn. Have a bit of a play with it. There is a how-to instruction manual on the site which will be good enough to get you started. 

http://www.incrediblecharts.com/


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## pearcey29 (6 November 2018)

Ann said:


> Pearcey29, If you want to trade short term my suggestion would be to learn to chart. Once you can chart you will see certain levels for entry and exit points based on indicators which you can relate to.  There are certain chart shapes and price levels called resistance and support levels.
> 
> I use Incredible Charts they are a real pleasure to use. There is both a subscriber and free access. The subscriber gives you access to more indicators but the free access would be fine to work with for a while as you learn. Have a bit of a play with it. There is a how-to instruction manual on the site which will be good enough to get you started.
> 
> http://www.incrediblecharts.com/



thank you very much ANN


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## 12Percent (6 November 2018)

Hi,

These are the basics of this game and I would advise you to read a few books before you start parting with your hard earned money. 

There are some introductory courses you can read through on various websites such as ASX and Morningstar etc too.


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## luutzu (6 November 2018)

pearcey29 said:


> thanks for taking the time to reply. Am i right in saying that trading is more of a short term buy low sell high multiple trades over a short time frame and investing is holding  shares for a long time while buying more of the same shares over time




No, not right. I think that's a misconception about trading and investing.

To buy something and simply hold it doesn't make it grow or profitable. 

What makes a purchase profitable, ultimately, is both the dividends and the capital gains. 

Capital are gained when you sell something for higher than what you bought them at, ignoring inflation for now... What will make others pay higher, or pay at any price, is the value of your holdings. 

So buy what is valuable, don't over pay for it. Hang on until you need the cash or until the business deteriorate. 

Sure you can follow the trend, trade in out. But you got to be aware that there are a whole lot of smarter, more experienced, much more better capitalised than you who's more plugged in. 

It's not a bad way to make money, just most doesn't have the resources to have a chance in hell. 

So as a small investor with a few hard earned bucks... try to hang on to it; deploy it in ways small, under resourced investor could hope to gain the advantage. And that, in my opinion, is not through predicting market movement; but through careful study of the business behind all the stock quotation.


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## luutzu (6 November 2018)

pearcey29 said:


> Hi, I am very new to this and was wondering if any one could help me by explaining
> what it means (in beginner lingo) and are there any numbers or areas i should be really looking at
> 
> VALUE
> ...




Most terms in finance and investing are quite literal. The hard part is to understand what each of the variable mean and what the ratio implies. 

e.g. P is just price. 
E is earning; B is Book value; S is sales [revenue]. 

So those ratios are just the result of P divide the E, B, S etc.

Easy enough. But more importantly...

What is the E there? Most provider define it as the most recent report [they entered] reported earnings. Some define it as the average reported E last two years. Some define it as this years' and the "consensus" forecast next couple years. 

So already there's a few pile to shift through. Which is are they using. Are the actual reported E the company's actual earning power or just the current year's really bad or really good result. Forget about the forecast, they're often just a simple mark up by analyst pretending to do something useful.

So as a beginner, I think you ought to sit back, put your cash away somewhere safe... and study like heck. Sit back some more to figure things out... then slowly enter the market. 

To rush in when you're just starting with cash you've saved up and soon enough it's going to go to someone else's pocket. Then you will either take a very long, long time to recover it... or just sell out and give up on investing as it's too risky. 

But having said all that, investing is not as hard as it sound. There's a heck of a lot of harder ways to earn a living. To figure out good businesses, own a part of it and only watch it once or twice a year... that's not a bad way to make a living. 

But then you might come into the problem of not being able to survive on, say, 10% return on $100K. 
That's true but you wouldn't survive on 0% of half that too. 

Get rich slowly I supposed.


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## Ann (6 November 2018)

If charting appeals to you and you get the drift you will probably then ask how do you find stocks, that might be worth trading. You could start off with the Yahoo Finance Australia. This is not the only way to find stocks but there are all sorts of things here which may interest you, including some stock screens like this one...https://au.finance.yahoo.com/most-active/


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## Ann (6 November 2018)

Ann said:


> If charting appeals to you and you get the drift you will probably then ask how do you find stocks, that might be worth trading. You could start off with the Yahoo Finance Australia. This is not the only way to find stocks but there are all sorts of things here which may interest you, including some stock screens like this one...https://au.finance.yahoo.com/most-active/




I think this is a better stock screen for you. I just found it and it looks excellent.  Anyone else have any good stock screening sites? https://au.investing.com/stock-scre...|avg_volume::0,43113484<pair_change_percent;1


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## Ann (6 November 2018)

Ann said:


> I think this is a better stock screen for you. I just found it and it looks excellent.  Anyone else have any good stock screening sites? https://au.investing.com/stock-screener/?sp=country::25|sector::a|industry::a|equityType::a|eq_market_cap::169020,167660000000|eq_one_year_return::-99.5,6650|avg_volume::0,43113484<pair_change_percent;1




And of course finally (because I thought it was a Premium feature) it appears you can use the stock screen on Incredible charts for free. 
https://www.incrediblecharts.com/topic/Stock_Screener


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## tech/a (6 November 2018)

Ann

If you could search for any metric or characteristics
What would they be and why?


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## Ann (6 November 2018)

tech/a said:


> Ann
> 
> If you could search for any metric or characteristics
> What would they be and why?




Depends on what I am trying to achieve tech/a.


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## tech/a (6 November 2018)

Thought that would be a profit!



Ann said:


> Depends on what I am trying to achieve tech/a.


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## Darc Knight (6 November 2018)

luutzu said:


> No, not right. I think that's a misconception about trading and investing.
> 
> To buy something and simply hold it doesn't make it grow or profitable.
> 
> ...




OK Si Gung, you're basically saying use Fundamental Analysis over Tech as the big boys are better at Tech?
Problem is ain't the big boys better at Fundamental as well - they have more and better knowledge?


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## luutzu (6 November 2018)

Darc Knight said:


> OK Si Gung, you're basically saying use Fundamental Analysis over Tech as the big boys are better at Tech?
> Problem is ain't the big boys better at Fundamental as well - they have more and better knowledge?




No they don't. Not better info, just more info, most of which are pretty useless.

An average investor have the same access to the fundamental data - it's in the presentation and annual reports. So the playing field there is more level.

What's more, fund managers and analysts have incentives to follow the crowd rather than following their own thinking. That is, it's safer for the job to be wrong along with the crowd and be wrong alone. That's why you see analyst recommendations and forecast all being very similar. 

There's a handful of cowboys of course. But they're far and few... and that's where the average investor can beat them. 

When an dude in his "office" in the shed tries to use his couple screens against racks of servers, rows of algo, maths, computer whizzes... all hard at work coding and chugging through price data. They're not going to have much of a chance. 

And even if they're smarter and their NBN optic works fast most of the time... meh. Short term pricing manipulation will take them to the cleaners soon enough. 

But if they rely on fundamental data. Back their own judgment based on their understanding of the business... all stock prices will eventually go back to that "true value". 

Just be a bit more patient in loading up, and in off loading. The market and the smart monies tend to follow and over react both ways.


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## Darc Knight (7 November 2018)

luutzu said:


> No they don't. Not better info, just more info, most of which are pretty useless.
> 
> An average investor have the same access to the fundamental data - it's in the presentation and annual reports. So the playing field there is more level.
> 
> ...




You're an Accountant aren't you? I've got an Accounting degree with extended major in Fin Planning, although I made my money the honest way  but I always thought Financial Statements really aren't a good source of information. Auditors sign off on a lot of things.


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## Darc Knight (7 November 2018)

I remember when a dodgey Bloke I know recommended Roger Montgomery''s book. I said you can't value a Company from it's Fin Statements without inside information.


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## tech/a (7 November 2018)

Darc Knight said:


> You're an Accountant aren't you? I've got an Accounting degree with extended major in Fin Planning, although I made my money the honest way  but I always thought Financial Statements really aren't a good source of information. Auditors sign off on a lot of things.




How true is this!
Most think Charting is Voodoo.
Here is the real smoke and mirrors.


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## luutzu (7 November 2018)

Darc Knight said:


> You're an Accountant aren't you? I've got an Accounting degree with extended major in Fin Planning, although I made my money the honest way  but I always thought Financial Statements really aren't a good source of information. Auditors sign off on a lot of things.




I'm not an accountant, no. But I have written an accounting software... so accounting for investors?

An investor, in looking at the financial statements, is not really there to value the business *precisely*. 

No one can value a large business precisely, not even the executives, and definitely not the board. This is because the value of a business always move... it is organic, grow and shrinks.

But more importantly, as you know, being an accountant... the data are estimates... in large corporations, larger estimates. Estimates that are often delayed. 

But aside from that, a business' value is about where it'll be years from now. 

SO already there's two approach to valuing the business - its book value, assuming it's all up to date and approximately about right and honestly estimated. Then there's the future prospects.. i.e. putting those assets to use, expanding into new markets... the likelihood of such possibilities bringing the cash back given the financial position, the product, competitors etc. 

Can't value it based on future possibilities of world domination; shouldn't really go for the book value/asset pricing only approach either... So it'll depend on the business you're looking at. 

But it is possible to value a business from its financials. Some companies' position made it possible to be more confident about the estimate; some you just don't want to touch. 

-----------

Here's how I value Sirtex in three charts. 

Remember Sirtex? Its CEO allegedly [ASIC reckons he did it too] trade on insider info. The new products they're planning to expand into "fail" because it didn't extend life in other cancer patient. 

From about $20 to $25 its share price drop to $16, then soon after to $10.50s in matter of months?




Above show that Sirtex is not going to go broke. Its cash and receivables alone more than meet coming liabilities. Inventory is produced on demand. 

Compare that to Dick Smith and you can kinda see that Dick is in serious trouble if they don't move a large chunk of their inventory. 





My favourite chart. Things moving in the right direction. Much like Wal-Mart. 
So you know it's a good business.

Other factors also backed this up... Returns, margins etc.

What about the price?




Below a conservative estimate of modest/inflation-pegged "growth" of 2.5% a year. 

And that's on the reported earnings during years where they've spent abnormally on R&D, testing to expand their drugs into other areas. With the tests coming to and end, normalised earnings will be higher.

That does not include the planned expansion into China and other markets. 

But assuming none of that happened... can the business remain as it is, in its current form and be worth the investment being asked?


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## Darc Knight (7 November 2018)

luutzu said:


> I'm not an accountant, no. But I have written an accounting software... so accounting for investors?
> 
> An investor, in looking at the financial statements, is not really there to value the business *precisely*.
> 
> ...




I'm not an Accountant, I couldn't bare the thought of doing the CA or CPA programs. My initial work taught me that. I know Accountants who have walked away from Accounting due to pressure to sign off on illegalities.

You're a smart cookie Luu, I'll have to take the time to fully digest your post, time I don't currently have. Can you give me a link to your investing software pls. So you incorporate both Fundamental and Technical analysis? Thanks!


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## pearcey29 (7 November 2018)

Darc knight if you need to take time to digest Luu's post what about me (the novice) i got more chance of speaking with aliens than understand that stuff


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## luutzu (7 November 2018)

Darc Knight said:


> I'm not an Accountant, I couldn't bare the thought of doing the CA or CPA programs. My initial work taught me that. I know Accountants who have walked away from Accounting due to pressure to sign off on illegalities.
> 
> You're a smart cookie Luu, I'll have to take the time to fully digest your post, time I don't currently have. Can you give me a link to your investing software pls. So you incorporate both Fundamental and Technical analysis? Thanks!




Would be tough signing off on else someone else will. 

From a couple experience I have at big corps., I wouldn't be comfortable signing off on their excel spreadsheet "accounting" either. 

App not up yet. Minor clean up and a mail server config should see it live soon. A couple of weeks I reckon.

It's free too, so that should be good. Or not, as it's free. 

Well, people need to enter the financial data, which isn't hard but it can be intimidating and "unnecessary" if you don't want to do it. But I reckon I've put enough incentives for users who care to to enter the data. 

Taking on the big data boys Batman. 

----

It's technical in the sense that I use charts to visualise the metrics. Lots of it. About 49 charts in total. 

Fundamental in that the metrics came from the financial statements. But it's not like most others who just buy pre-packaged data and pretty it up through a few charts... those are ok to screen the stocks for shortlisting, but I wouldn't want to put money out based on their calculation though.


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## Darc Knight (7 November 2018)

pearcey29 said:


> Darc knight if you need to take time to digest Luu's post what about me (the novice) i got more chance of speaking with aliens than understand that stuff




Haha. Stay tuned Mate. Tech/A and Luu are some of the smartest folk around when it comes to investing, and they are covering the whole spectrum of investing - Fundamental and Technical analysis.


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## pearcey29 (7 November 2018)

Darc Knight said:


> Haha. Stay tuned Mate. Tech/A and Luu are some of the smartest folk around when it comes to investing, and they are covering the whole spectrum of investing - Fundamental and Technical analysis.



yer iv noticed a lot of very smart people on here I am just way out of me depth i think


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## luutzu (7 November 2018)

pearcey29 said:


> Darc knight if you need to take time to digest Luu's post what about me (the novice) i got more chance of speaking with aliens than understand that stuff




You can ask and I'll try to help explain it. 

But that's why in the app I put tips and help with each chart. Will add and improve on them at later stages but yea, most normal people do not need to memorise what every accounting term is. We just need to know what it mean, what it tries to show about the business.

There's only 3 financial statements in the report. Well, the changes in equity is just a detailed version of the equity in the balance sheet. 

But the 3 are pretty straight forward once you break it down into bits. 

Then once the bits are slowly presented... an idiot like me could even understand it. 

That and you also got the old case studies to compare to. e.g. Dick Smith collapsed... Wal Mart didn't. Is Woolworth, or other retailers, showing similar pattern. I guess that's being technical and of course once you read the financial statements etc., more context and better judgment, but from a purely financial aspect, it's pretty straight forward.

E.g. Financial Position... the Balance Sheet.... 

Current Liabilities vs Current assets. 

Current mean it's due, or coming, within 12 months. 

Current liabilities include payables owed to suppliers, loans due within 12 months etc.; 

Current Assets are the asset that's expected to turn into cash within 12 months. So it include cash at banks, receipts payable for goods/services delivered, inventory etc.

IF current assets can barely meet current liabilities... the business is not in a good position. Chances are it'll either have to borrow more cash, raise more cash or go bankrupt. Or sell most of its inventory at prices as marked etc.

So once broken down, things become a lot clearer.

But as business is dynamic, factors such as the economy, household debt, bad luck, good fortune... Or some idiot executive with plans for empire building wanting to takeover.


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## Ann (7 November 2018)

tech/a said:


> Ann
> 
> If you could search for any metric or characteristics
> 
> What would they be and why?





Ann said:


> Depends on what I am trying to achieve tech/a.






tech/a said:


> Thought that would be a profit!




This is true if I am charting for myself and my own portfolio, however I may just want to chart a Commodity or a chart of a penny dreadful someone may have commented upon, so I would look in different ways for different things. So no, it is not all about profit when I chart.

If you are wanting to know my trading plan then it goes this way....

First I choose a theme for myself, one which interests me and a way to focus on certain stocks. My last three main themes over the last couple of decades has been health stocks, then stocks that were adjuncts to mining companies, then my most recent theme has been stocks that offered a DRP (Dividend Re-investment Plan). Sometimes I will trade something out of the theme but not often. When I have closed out of all my stocks, I then look for another theme.

I am a long term investor and try to ride a stock as long as I can. I take a very long term view of a stock (twenty years or as much as is charted) and work out if it is going up, down or sideways by drawing support and resistance lines on a weekly chart. I only buy stocks if they are going up or have come from a long sideways consolidation and risen above my drawn resistance lines. I check the PVI (Positive Volume Index) to see if the punters are excited, the RSI to see it isn't into overbought territory and the MACD to make sure there isn't an approaching cross down and I also check volumes for steadiness. If all those signals are looking good and all else is looking positive I will enter into the trade.

I have a 30 week simple MA and a trailing stop of 10.2% of weekly close. If the stock breaks below a support line and falls below the MA and hits the stop then I do a manual close out of the stock. I never re-enter that stock even if it rises back up again.

If I am looking at Commodities (which I don't trade) I draw chart patterns, RSI to check how over/under bought it is but mostly I look at the COTs (Commitment of Traders) to see if they are contracting or expanding.

If I am looking at charting someone's penny dreadful I will take a shorter term view, maybe a year or two, draw supports and resistances, PVI, RSI, MACD and Volume, no MAs. I will also take a glance at the overall sector to give me an indication of what is potentially likely as a fall or a rise.
Hope that covers what you wanted to know tech/a. How about you?





pearcey29 said:


> Darc knight if you need to take time to digest Luu's post what about me (the novice) i got more chance of speaking with aliens than understand that stuff




pearcey29, there is a lot of jargon flying around and there seems like so much information, an understanding will come to you in time. Try to keep it as simple as possible for yourself. Learn to chart, work out if you want to do short term trading or longer term. Choose your stocks with a theme of some kind, maybe mining, health, energy...whatever.  Make a trading plan for yourself. Test it out on the Trading Game here. Don't rush to throw your money into the market, you may never see it again!


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## tech/a (7 November 2018)

Thanks that gets me right up to date.
Me short term futures DAX


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## Darc Knight (7 November 2018)

luutzu said:


> I'm not an accountant, no. But I have written an accounting software... so accounting for investors?
> 
> An investor, in looking at the financial statements, is not really there to value the business *precisely*.
> 
> ...




This is brilliant. This is how Accountants talk about Fin Statements being like a story book,


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## Ann (7 November 2018)

tech/a said:


> Thanks that gets me right up to date.
> Me short term futures DAX



Interesting, the DAX looks like it has a fully formed head and shoulders pattern coming from December 2016. It must be getting harder to trade.


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## willoneau (7 November 2018)

Ann said:


> Interesting, the DAX looks like it has a fully formed head and shoulders pattern coming from December 2016. It must be getting harder to trade.



Ann commodities, futures and fx arn't like stocks, have a go with a demo account and see how you do?


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## willoneau (7 November 2018)

Pearcey29 go read some of the threads by Peter2 or tech/a they actually show you what is involved in actually trading and how much work is needed to be a consistent profitable trader.


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## ducati916 (8 November 2018)

To date, you have only been exposed to [those] traders that trade price. Price you have to trade directionally. You [could] also trade [price] through trading volatility. By doing so, price becomes market neutral.

One [major] advantage to trading volatility, rather than price, is that volatility has [historically] firmer boundaries as compared to price, which can help when deciding on value inputs.

You will need to venture into the world of options to do so. I've never traded Australian options, only US, so I have no idea if its actually possible in Australia. Seek out Wayne on this question.

jog on
duc


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## tech/a (8 November 2018)

Ann said:


> Interesting, the DAX looks like it has a fully formed head and shoulders pattern coming from December 2016. It must be getting harder to trade.




Always the same.
Trade long and short.
Only trade for a couple of hrs 
A couple of days a week


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## Darc Knight (8 November 2018)

Is it really necessary for an Investor to have a thorough understanding of Fundamental and Technical analysis when using investing software nowadays. Obviously a thorough understanding helps but is it really necessary with software?


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## luutzu (8 November 2018)

Darc Knight said:


> Is it really necessary for an Investor to have a thorough understanding of Fundamental and Technical analysis when using investing software nowadays. Obviously a thorough understanding helps but is it really necessary with software?




Sun Tzu says, to know oneself and know the enemy will ensure complete victory. To know oneself but not the enemy, half half; To know neither and you're screwed. 

Of the (five) conditions for success, one is to know the field of battle. 

The stock market has many players. Among them are the managed fund, the index fund, the traders.

What do they have in common? Trend trading. 

So when a stock drop by a certain amount, the index funds will offload their holdings; that often further pushes the stock down... if it goes below the top 200 or 300 etc., others will sell out of it for no other reason than their portfolio just don't do "small, micro, cap". 

So there's momentum. 

How does an average investor possibly take advantage of that? 

My opinion is that they ought to have a pretty damn good idea of what the approximate value of the stock is. Then depends on sentiment, how much of a bargain the price depresses to etc., might be able to further advantage from market action rather than fundamental alone. 

But without a reasonable idea of the company's value, it's hard to take full advantage of the market/technical aspect.

Check out my app...

www.danginvestor.com

It's in testing mode... I'll switch it on and off, mostly off... but it's working. 

Just remember your login and password as they're encrypted and I haven't yet done the reminder.

Check out the videos I made. It should give an overview of what it's all about.


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## Darc Knight (8 November 2018)

Site looks very nice @luutzu I'll have a play with it shortly. Thanks!


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## luutzu (8 November 2018)

Darc Knight said:


> Site looks very nice @luutzu I'll have a play with it shortly. Thanks!




Thanks Batman. 

btw, just download the FREE research available. The ones that's not free will need a visa/mc. The payment gateway is in test mode and won't accept.


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## Darc Knight (8 November 2018)

7 day 100℅ money back guarantee. Very good Luu!
It's all done online via the site @luutzu ?


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## luutzu (8 November 2018)

Darc Knight said:


> 7 day 100℅ money back guarantee. Very good Luu!
> It's all done online via the site @luutzu ?




The app itself is free. No money or any fee to use it.

But it is also a *research exchange platform* where users can sell [or give away] research they've done. Namely, the financial statement data.. and if they care to share their notes or research, they can also include that in the listing too.

The idea is, you would only buy the research after you've looked and read about it elsewhere, want to take a closer look but doesn't have time or doesn't care to enter the financial data.

If other members have done the research and wish to list a copy on the Exchange, then you can download it, pay the price the user wanted for it. Price can be free or a few bucks. Up to the user.

I simply get 25% commission on each successful sales. The seller get 75%, payable each month.

Kinda like eBay for investment research.


So the 7-Day money back is for instances where the listed research is not complete or falsely advertised. 

But that should be rare as I've designed the charts shown in the listing showing live data with documentation (if any) attached. From that audit alone, users would know what's in the listing they're about to buy. 
----------

I guess the premise here is that the data that's available out there aren't that good. And of the ones that are useful you can get them for free so why pay for them.

Most people wouldn't bother entering financial statements if the business  doesn't already look interesting to them. 

So when it's listed... it's quite interesting and might be worth a much closer look.


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## Ann (8 November 2018)

willoneau said:


> Ann commodities, futures and fx arn't like stocks, have a go with a demo account and see how you do?




Yes, I really should willoneau. One day! 



tech/a said:


> Always the same.
> Trade long and short.
> Only trade for a couple of hrs
> A couple of days a week




Yes after I said it I realised it would make no difference going long or short. What sort of indicators or signals do you use for an entry/exit?


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## tech/a (8 November 2018)

Price action / volume explosion / Range / volume withdrawal / blah blah.
We are currently developing pattern recognition 
Using AI it’s suprising what an algorithm can find in a data set 
That we cannot see with the naked eye.

And more


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## Darc Knight (9 November 2018)

Even with the basic understanding an Accounting degree gave me, I still felt the average person was pushing the proverbial uphill trying to compete with the big boys, thus I went into Index Funds. Think I'll dust off the textbooks (or buy newer ones) and try this Voodoo you guys do!


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## luutzu (9 November 2018)

tech/a said:


> Price action / volume explosion / Range / volume withdrawal / blah blah.
> We are currently developing pattern recognition
> Using AI it’s suprising what an algorithm can find in a data set
> That we cannot see with the naked eye.
> ...




Yea, AI is getting pretty damn amazing.

Just uploaded a couple YouTube videos and the damn thing recognised that I bootlegged other people's music. Which is fine as long as others get the revenue from the ads. But man, pretty impressive how they could detect that so quickly.

You've probably heard of Ed Thorp Tech? He's the godfather of these trading things, developed his own system and did incredibly well. 

From the little I read of him so far, seem his genius lies in not just the system but also knowing the underlying assumptions behind them so that he can personally intervene when the system and the new reality doesn't fit anymore. 

From that same book, it seem that some traders at the big firms fail to recognise that their system is not all truth and all powerful all of the time. So they develop a model that might have worked under x, y, z assumptions... but the new black swan throw a wrench in it and those who use it without realising the ifs and why, just go along thinking it's all great like before. 

Our late Pixel, rest in peace sir, was a mathematician and programmer. Quite impressive crowd this forum has.


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## tech/a (9 November 2018)

luutzu said:


> Yea, AI is getting pretty damn amazing.
> 
> Just uploaded a couple YouTube videos and the damn thing recognised that I bootlegged other people's music. Which is fine as long as others get the revenue from the ads. But man, pretty impressive how they could detect that so quickly.
> 
> ...




Thorp is a genius.

However the whole AI area has exploded beyond belief.
The most exciting and diverse area you can possibly NOT imagine.
I'm the money guy in this pursuit but I can tell you I'm seeing stuff
and being introduced to possibilities I cant even begin to explain.
*The wheel is re inventing itself.*

Amazing, Exciting, Ground breaking.
Available.


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## fiftyeight (9 November 2018)

tech/a said:


> Thorp is a genius.
> 
> However the whole AI area has exploded beyond belief.
> The most exciting and diverse area you can possibly NOT imagine.
> ...




Available if you have a son who has a  PhD in Physics (I think) and can code haha


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## tech/a (9 November 2018)

Patience


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## Ann (9 November 2018)

tech/a said:


> Price action / volume explosion / Range / volume withdrawal / blah blah.
> We are currently developing pattern recognition
> Using AI it’s suprising what an algorithm can find in a data set
> That we cannot see with the naked eye.
> ...




You are using a computer program to make all the trading decisions or am I misunderstanding you? If so how is that working out for you?


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## tech/a (9 November 2018)

We are currently working on data analysis 
And AI. There isn’t anything in the market which 
Is all collated in one place which can deliver the
Necessary metrics for traders to be confident in their 
Methodology. Boxed programs like Amibroker fall very
Short. Once you have this AI can be developed.

This has been many years in the making and when your
Working with perfectionists in correct and meaningful 
Data analysis it takes time. I understand this.


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## barney (9 November 2018)

tech/a said:


> *We are currently working on data analysis
> And AI*.




Tech .. as you would know there are a lot of others pursuing this line of thinking, and well done if you believe you may have found an additional edge in it's application …

Genuine question, as I know you have been a long time profitable trader …

If you and your Son were able to generate an apparent edge in this field, would you …

a) Trade the crap out of it … or   
b) Commercialise the findings …. and try and profit from the analysis … or
c) Do a) first, then b)


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## ducati916 (10 November 2018)

tech/a said:


> Price action / volume explosion / Range / volume withdrawal / blah blah.
> We are currently developing pattern recognition
> Using AI it’s suprising what an algorithm can find in a data set
> That we cannot see with the naked eye.




First, an 'algorithm' is not AI.

Second, given that the market is a non-linear random walk, does it really matter that in any given data set the algorithm can 'see' [to the eye] an invisible pattern?

Third, how important is the calculation of probability to the algorithm?

jog on
duc


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## Ann (10 November 2018)

willoneau said:


> Ann commodities, futures and fx arn't like stocks, have a go with a demo account and see how you do?




I am going to have a week off work shortly, which demo account would you suggest willoneau?


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## luutzu (11 November 2018)

ducati916 said:


> First, an 'algorithm' is not AI.
> 
> Second, given that the market is a non-linear random walk, does it really matter that in any given data set the algorithm can 'see' [to the eye] an invisible pattern?
> 
> ...




I thought they're basically the same. But would "algorithmS" be?

I have to look this up as I always assumed that they're basically the same thing, just that AI is a kind of master algorithm with a bunch of if statements, loops etc., all directing to various other algorithms to solve a problem based on certain inputs. 

https://www.quora.com/What-is-the-difference-between-AI-and-Algorithm


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## ducati916 (11 November 2018)

luutzu said:


> I thought they're basically the same. But would "algorithmS" be?
> 
> I have to look this up as I always assumed that they're basically the same thing, just that AI is a kind of master algorithm with a bunch of if statements, loops etc., all directing to various other algorithms to solve a problem based on certain inputs.
> 
> https://www.quora.com/What-is-the-difference-between-AI-and-Algorithm




That is much closer to the reality, there will be thousands if not hundreds of thousands of algorithms involved in certain areas of AI. They are necessary but not sufficient.

https://en.wikipedia.org/wiki/Artificial_intelligence#Reasoning,_problem_solving

But actually that's not my primary objection. My primary objection is that unless the AI developed can accurately predict the future, then apart from [potentially] reacting faster to micro-data intra-day and attaching probabilities to it, it does nothing new.

jog on
duc


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## tech/a (11 November 2018)

Barney

Both
Uqant is coming

Duc
I’m the money guy


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## ducati916 (11 November 2018)

tech/a said:


> Barney
> 
> Both
> Uqant is coming
> ...




Indeed. Hopefully it returns you even more money.

jog on
duc


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## barney (11 November 2018)

tech/a said:


> Barney
> Both
> Uqant is coming




Cheers ….. Exciting times for you and the young fella


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## tech/a (11 November 2018)

For everyone Barney 
The journey will be available 
To those who wish to become educated
It already is. The problem is that it is spread
Widely over many experts. Soon a great deal will
Be collated into one area and made understandable 
To people like you and I,along with the many who are
Well in front of us.

Data analysis as we know it on the level we know it
Will become obsolete.
It’s time to move to the next level.


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## willoneau (12 November 2018)

Ann said:


> Yes, I really should willoneau. One day!
> 
> 
> 
> Yes after I said it I realised it would make no difference going long or short. What sort of indicators or signals do you use for an entry/exit?



Indicators or signal type doesn't matter as long as it has positive expectency


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## willoneau (16 November 2018)

Tech/a I believe that when a lot of people start using AI to trade the market they will eventually start cancelling out each other . There needs to be imbalance in the market for it to move, just my thoughts .


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## tech/a (16 November 2018)

willoneau said:


> Tech/a I believe that when a lot of people start using AI to trade the market they will eventually start cancelling out each other . There needs to be imbalance in the market for it to move, just my thoughts .




Countless ideas,markets,timeframes.
There are millions of Monkeys trading as we speak 
They aren’t cancelling each other out.

AI finds paths we don’t even know exists.

Markets won’t move as a consequence of AI.


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## willoneau (16 November 2018)

tech/a said:


> Countless ideas,markets,timeframes.
> There are millions of Monkeys trading as we speak
> They aren’t cancelling each other out.
> 
> ...



No markets will move in spite of AI


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## willoneau (16 November 2018)

Don't follow monkeys cancelling each other out?
 I was actually referring to the algo scalp trading which came to mind.


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## tech/a (17 November 2018)

Monkeys —- all traders in the market.
Scalps just one trading challenge.

Markets will move in spite of just about everything.


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## willoneau (17 November 2018)

Ann said:


> I am going to have a week off work shortly, which demo account would you suggest willoneau?



I'm using Pepperstone but be careful think some dodgy people around. The little checking I did seemed ok and I did take some money out which happened straight away. If only trading small say $500 what have you got to lose. Being in Aussie was a little reassuring too, main branch in UK .


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## wingnawingna (18 November 2018)

pearcey29 said:


> Darc knight if you need to take time to digest Luu's post what about me (the novice) i got more chance of speaking with aliens than understand that stuff



You and me both LOL.  Don't think we'll the answer here.  Might have to do more research on here.


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