# Fundamental Trading Positions



## ducati916 (22 February 2006)

This  portfolio was originally instigated on Reef, but as there has been some interest shown in past threads on this forum, and will balance out the preponderance of that technical bias, so I can run it here also.

http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=8;t=000433

I'll update it probably once a week on a Friday (US time) 
It is not a short term system
There is no leverage
There are no price based stoplosses
There are discretionary exits based on appraisal of fundamental factors

This was the state of affairs as of last Friday.
The first position was opened 12/01/06
So it is early days currently



> tech/a
> 
> Here is the update;
> 
> ...




jog on


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## ducati916 (25 February 2006)

End of week update;

Ticker.............Opening Price..........Current Price...........%change
EGY...................$4.61...................$6.42......................+39%
HNR...................$8.39...................$9.00......................+7.2%
CALL.................$4.76....................$4.61.....................(-3.2%)
SAFM................$26.45..................$24.85....................(-6.1%)
FORD................$10.74..................$8.95......................(-16.6%)
UST.................$41.25..................$39.08.....................(-5.2%)
ISSC................$13.68..................$14.78.....................+8.1% closed
CTT.................$4.00....................$4.99......................+24.8%
CQB.................$17.47..................$17.58.................... +0.00%
TOL.................$29.78..................$33.34.....................+11.9%
GKIS................$14.05..................$13.80.....................(-1.7%)
KND.................$21.94..................$21.83.....................+0.00

Aggregate .................................................................+4.85%


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## Happy (25 February 2006)

If stocks have good ‘fundamental credentials’ would it be good idea to average down?


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## ducati916 (25 February 2006)

*Happy* 

The stocks have to have a combination of;
good fundamentals and
a cheap price (good value)

In which case there should be no real requirement to "average down"
If you have however bought a stock that possesses good fundamentals, but at an "expensive price" or overvalued, then by "averaging down" you can decrease your average cost per share.

The immediate problem that becomes apparant, is that if you have bought an "overvalued" stock, your valuation calculations may be optimistic, and you will still be buying too soon on the "averaging down" valuations, in which case this could become an exercise in extreme patience, as has been intimated.

The second problem is twofold.
If your valuation skills are having you enter overvalued stocks, just how confident are you of your skills within the assessment of credit risk?
Not only may you overpay, you may actually purchase a stock that is in point of fact not fundamentally sound in the first place.

jog on
d998


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## michael_selway (26 February 2006)

Averaging down makes u overweight, i.e u break the diversification rule (if u had one). It can also have unlilimited loss if it goes chapter 11.

2ndly if it drops just let it recover or something in time (if fundamentals are still good), dont need to buy more, buy something esle, something better perhaps that can rise more, spread the risk.


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## nizar (26 February 2006)

according to peter lynch....

if u buy into a good company which has good fundamentals (solid earnings growth) and the story is still good (industry), then if the price goes down, u should buy more. This is why corrections provide a terrific opportunity to pick up quality companies at bargain prices.

also, if earnings are steadily going up, but share price goes nowhere, you should just sit tight, because over time, share price will always catch up to earnings.

warren buffet also follows similar mentality. he doesnt even look at the market, one time he bought a newspaper company which he valued at 400m, but market valued at 80m, he bought the whole company but the market did not realise its potential and the price of this company kept going down for 2 years, but when the turn-around came, it was sweet..

patience is required


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## michael_selway (26 February 2006)

nizar said:
			
		

> according to peter lynch....
> 
> if u buy into a good company which has good fundamentals (solid earnings growth) and the story is still good (industry), then if the price goes down, u should buy more. This is why corrections provide a terrific opportunity to pick up quality companies at bargain prices.
> 
> ...




There are exceptiosns I guess

but im pretty sure Warren Buffet bought a few stocks like that that have gone down

thx

MS


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## Strw23 (26 February 2006)

Im no expert so dont get upset with me if you disagree but I think there is a big difference between owning what you believe to be a solid stock and after a while the price has dropped you have the oppurtunity to buy more at a cheaper price, and buying what you believe to be a solid stock but the price continues to drop and you keep increasing your position on the way down while trying to convince yourself that you are right and the market is wrong or the more I buy the cheaper it gets, etc etc. At what point do you stop increasing your position or decide that the stock will not recover? I dont do it, but I agree with the first option and not the second. In my opinion I also wouldnt call the first option averaging down. I am not saying anyones style is wrong, if it works for you good, just adding  2 cents worth. What do others think?

Scott


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## saichuen (26 February 2006)

i believe it's not wise and advisable to average down whatever the reasons may be. it's one of those few rules that i will probably stick to no matter what the temptation is. on the other hand, we may wish to focus on averaging up instead.


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## nizar (26 February 2006)

michael_selway said:
			
		

> There are exceptiosns I guess
> 
> but im pretty sure Warren Buffet bought a few stocks like that that have gone down
> 
> ...




yes he did buy stocks that went down, if u read my post properly i actually mentioned one of them, but ill mention it again

he bought some newspaper company at 80m (market price) but he calculated was substantially undervalued and was valued at 400m... after he bought it, the share price WENT DOWN for approx. 2 years, but YEARS later, the share-price then appreciated to its true value and beyond since earnings also grew at that time...

when im saying it, when u buy a share and it goes down, if earnings keep going up, and the story is good, u should buy more if u did ur research... and be patient, and over-time, the market will realise its value..

warren buffet was an investor, he looked at long-term gains..

for traders like nicholas darvas and the like, if u like a share u buy it, if sp goes down, u make a loss, u use-stops and move on...

for investors, if after research u buy a share and it goes down, it doesnt mean u were wrong, it means u buy more and/or u be patient and wait for the market to realise its potential..


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## nizar (26 February 2006)

Strw23 said:
			
		

> Im no expert so dont get upset with me if you disagree but I think there is a big difference between owning what you believe to be a solid stock and after a while the price has dropped you have the oppurtunity to buy more at a cheaper price, and buying what you believe to be a solid stock but the price continues to drop and you keep increasing your position on the way down while trying to convince yourself that you are right and the market is wrong or the more I buy the cheaper it gets, etc etc. At what point do you stop increasing your position or decide that the stock will not recover? I dont do it, but I agree with the first option and not the second. In my opinion I also wouldnt call the first option averaging down. I am not saying anyones style is wrong, if it works for you good, just adding  2 cents worth. What do others think?
> 
> Scott




good point there

u have to know the stocks u buy into and have done ur research.

like i originally said, if the earnings are solid, and the story is good (industry) then u should increase or at least keep ur holding in the company.
no stock keeps dropping for no reason
eg. MXG: problems at wembley - earnings are down, so the stock goes down. simple.
eg. BSL: industry is in oversupply (story is no longer good), competition is up, costs are up and ultimate results are that earnings are down, so the stock goes down. simple

sometimes the market over-reacts, for example James Hardie last year was in trouble because of asbestos, the market punished share price by about 20% in a month to bring it to about 5.60... some smart fund managers saw the market factored in the worst possible scenario for JHX and they know from the experience that the no. of law suits wouldnt be that bad, so they picked it up, a few months later later back to 8.50-9.00..

theres always a fundamental reason for a stock to go down..

iv also read recommendations from ppl that for money and psychological reasons, u should NEVER add to a losing position...

so u could look either way, but it really depends from a trading positon or a investing position..

and also Scott, what alot of people say: NEVER become emotionally attached to a stock...

Darvas never did, and thats what made him so successful, if he bought a stock and it went down, he sold it, cut his losses and looked elsewhere, no ego, happy 2 admit he was wrong....


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## michael_selway (26 February 2006)

nizar said:
			
		

> yes he did buy stocks that went down, if u read my post properly i actually mentioned one of them, but ill mention it again
> 
> he bought some newspaper company at 80m (market price) but he calculated was substantially undervalued and was valued at 400m... after he bought it, the share price WENT DOWN for approx. 2 years, but YEARS later, the share-price then appreciated to its true value and beyond since earnings also grew at that time...
> 
> ...




I meant he bought shares that "went down" i.e bankkrupt/collapsed

thx

ms


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## bullmarket (26 February 2006)

I think averaging down becomes a bigger no-no the shorter your trading time frame is.  If a stock is trending down at the time you are considering averaging down then there is a higher probability that it will continue to trend down, at least in the short term, and so compound your losses.

If a stock has begun trending up but is still below your original entry price then I suppose it would be ok to buy some more *as long as  * you would have bought the stock at the lower price anyway had you not previously bought the stock at the higher price.

Basically there are 2 ways of looking at averaging down imo.

1) As I mentioned above, ask yourself if you would buy the stock at the lower price even if you had not previously bought at a higher price.  If the answer is no, then don't average down. 

2) There is no rule in trading/investing that I have seen that says that one must recover losses in the same stock(s) that created them in the first place.  Why not consider putting the funds you are considering averaging down with into another stock that is at least trending up and with hopefully better fundamentals and outlook.  I've seen many people turn originally short term trades into long term 'investments' hoping falling stock prices will recover eventually.  Some will, some won't.

But having said this, I also think that averaging down is less risky (but not without risk) with fundamentally solid blue-chips if you have a long term outlook than with say speculative biotechs, mining/exploration companies etc.

I occasionally average down into some 'lower risk' LPT's that have retraced a little due to what I perceive as short term unsustainable negative sentiment in order to take advantage of the higher yields.  But bear in mind, my no. 1 objective nowadays is income with capital gains second, and so a quick price recovery is not essential for me. 

Hope this helps someone. 

bullmarket


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## nizar (26 February 2006)

spot-on bullmarket and well said. ur experience shows.

this point is especially the key one:



			
				bullmarket said:
			
		

> I think averaging down becomes a bigger no-no the shorter your trading time frame is


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## Knobby22 (26 February 2006)

I buy down occasionly.
e.g. I bought 4000 Oxiana shares at 83c.
Then had to buy another 2000 when they went to 78c about 2 weeks later.
I was convinced they were a good buy.

That's fair enough, but if they had of dropped to say 60c and I was buying to try to break even to make my ego feel better then that's bad buying. If you are buying on fundamentals, you have to know why you are buying and be ready to question your reasoning if it does not go your way.

Another example, a few years ago I bought some Qantas shares at $2.88 after they dropped from around $3.30 in a couple of days. The yield was about 6.5% and having quite a few shares in the company I thought it was already cheap. I felt the sharp drop was caused by short term traders stops, panic selling and short selling. So I bought quite a few of them, on a margin loan. There must have been some other fundamental investors who agreed with me as we turned the tide and I got the lowest price that day (lucky). Sometimes you just have to back your judgement. I felt the thrill that short term traders must get that day.

But if you are not confident and think you understand why the drop has occurred, you shouldn't buy but wait for a turnaround. As a long term investor you may wait months for the price to form a new base before considering buying, though you are prob. better to wait for company announcements. 

So I have done it a few times and have not been burnt yet but I know people who have been. Ion comes to mind. You really need to be sure or wait.
Most of the time I wait. If the trend is a slow fall, I definitely wait.


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## It's Snake Pliskin (27 February 2006)

Let`s put some positive spin on this averaging down thing. It`s dollar cost averaging! The funds like to use this in their brochures etc.


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## wayneL (27 February 2006)

Snake Pliskin said:
			
		

> Let`s put some positive spin on this averaging down thing. It`s dollar cost averaging! The funds like to use this in their brochures etc.




Not quite Snake. Dollar cost averaging is when buys occur at regular intervals whether the stock is going down OR up. The price movement is irrelevant

Averaging down only buys additional shares as the shares become """"cheaper"""".


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## ducati916 (27 February 2006)

*All,* 

The only important point was made in regard to the possibility of breaking money management rules by becoming *overweight in one stock* 



> theres always a fundamental reason for a stock to go down..




Well yes, its overpriced in relation to its ability to earn a return for the investor based upon its capitalization structure.



> I think averaging down becomes a bigger no-no the shorter your trading time frame is. If a stock is trending down at the time you are considering averaging down then there is a higher probability that it will continue to trend down, at least in the short term, and so compound your losses.




There is no *probability* attached to a *trend* 
A trend is by its very construct a prediction of the future.
As such it will prove to be either right, or wrong, the outcome is 50/50
50/50 offers no *probability of an outcome* 



> 1) As I mentioned above, ask yourself if you would buy the stock at the lower price even if you had not previously bought at a higher price. If the answer is no, then don't average down.




Of course.
The higher price may have offered marginal value.
The lower price may offer compelling value.

jog on
d998


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## Knobby22 (27 February 2006)

"There is no probability attached to a trend 
A trend is by its very construct a prediction of the future.
As such it will prove to be either right, or wrong, the outcome is 50/50
50/50 offers no probability of an outcome" 

I disagree ducat.
If there is a trend down and you cannot understand what it is based on what you have worked out in a fundamental sense then you need to assume you may not know everything. If the trend is based on some short term factor and you are looking long term then what you say will make more sense.

AMP was a good example where the information was not out there while the price was dropping.


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## bullmarket (27 February 2006)

Hi ducati

I disagree with your comment below.



			
				ducati916 said:
			
		

> There is no *probability* attached to a *trend*
> A trend is by its very construct a prediction of the future.
> As such it will prove to be either right, or wrong, the outcome is 50/50
> 50/50 offers no *probability of an outcome*




Obviously I accept there are two possible outcomes when making a call on whether a trend will continue or not - ie...you will be either right or wrong.  But I still believe there is at least a slightly higher probability, for the short term at least, that a stock will continue in its underlying trend because of its prevailing momentum if for no other reason.  _Of course the trend will eventually change but until that actually happens I believe you have a higher probability of making correct calls on trends and being profitable if trading with the trend than against it._

Regarding your comment that a 50/50 event offers no probabililty of an outcome, I believe that view is *totally wrong *.  Surely even calling heads on a toss of a coin, with its 50/50 possible outcome, gives you a probability of 50% in being right.  So even in your case where you believe a trend is a prediction of the future (and in your case only a 50/50 prediction) then you are in effect saying that you still have a 50% probability of predicting the future direction of the trend.

cheers

bullmarket


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## saichuen (27 February 2006)

bullmarket said:
			
		

> 2) There is no rule in trading/investing that I have seen that says that one must recover losses in the same stock(s) that created them in the first place.  Why not consider putting the funds you are considering averaging down with into another stock that is at least trending up and with hopefully better fundamentals and outlook.  I've seen many people turn originally short term trades into long term 'investments' hoping falling stock prices will recover eventually.  Some will, some won't.




of all the reasonings that people may come up on averaging down, this is the one that is perhaps the most sensible decision to take, in terms of money and risk management.


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## ducati916 (27 February 2006)

*Knobby* 



> I disagree ducat.
> If there is a trend down and you cannot understand what it is based on what you have worked out in a fundamental sense then you need to assume you may not know everything. If the trend is based on some short term factor and you are looking long term then what you say will make more sense.




While that may indeed be the case, in reality, it happens very rarely.
If it should occur, then I would have no business taking a position.
Technical trends are meaningless, as they are largely populated by technical traders who are in large part meaningless, due to their reliance on stoplosses.

*bullmarket* 




> Regarding your comment that a 50/50 event offers no probabililty of an outcome, I believe that view is totally wrong . Surely even calling heads on a toss of a coin, with its 50/50 possible outcome, gives you a probability of 50% in being right. So even in your case where you believe a trend is a prediction of the future (and in your case only a 50/50 prediction) then you are in effect saying that you still have a 50% probability of predicting the future direction of the trend.




No not really, if we utilize aleatory probability, then yes, 50/50 would count as an outcome. However this is never really the context that traders/investors really use the concept of probability when talking about trends, and that is what is being discussed after all.

When the concept of trend is introduced, probability, goes out the window, as we are now talking in reality within a deterministic context. Determinism is a philosophical proposition that proposes that events, in this case "price action bracketed within the trend" due to being causally determined  by an unbroken chain of prior's, thus is predictive of future direction.

In the stock market, probability defined by DETERMINISM is false.
Therefore, if, you define probability as an aleatory construct, then 50/50 is random, and thus makes a total nonsense of "trend" defining anything at all.

jog on
d998


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## wayneL (27 February 2006)

Duc



> While that may indeed be the case, in reality, it happens very rarely.
> If it should occur, then I would have no business taking a position.
> Technical trends are meaningless, as they are largely populated by technical traders who are in large part meaningless, due to their reliance on stoplosses.




Despite being a technical trader, I agree with your points re determinism, probability etc. In fact if you recall I raised this point (albeit from a different angle) on Reef.

Your posts always contain some sort of logic, even if tenuous or faultily constructed because of your  emotional bias against t/a-stoplosses etc.

But sorry mate, that quote above is pure :bs:

Your logic is self defeating. If trends are largely populated by tech traders, these selfsame traders can hardly be meaningless now can they? And what have stoplosses to do with a trend? 

In actual fact tech traders *are* _mostly_ meaningless (the only sub-point you jagged here) as trends are largely populated by investors...f/a investors! It is *they* who create the trend. They are the "THEY" that we tech traders refer to obliquely and _ad naseum_

This makes the trend extremely meaning*full*. TA traders merely exploit this *f/a created trend* and their only influense is to tidy up around the edges.

Financial market trends are deeply rooted in human psychology and nothing to do with t/a. T/a just plots it on (electronic) graph paper.

Cheers


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## bullmarket (27 February 2006)

no problem ducati 

I posted my views on averaging down and the relationship between probability and trends in earlier posts with my supporting reasons.

We obviously disagree and that is fine     I don't have a problem with that......each to their own and what works for them as I don't see any value for me in rehashing my views and reasons from earlier posts  

cheers

bullmarket


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## Knobby22 (27 February 2006)

Pefectly stated Wayne and I completely agree with you.


Ducat, don't get caught up in the psychobabble that surrounds Warrren Buffett. I invest like you. I do OK. 

If you are talking about noise then ignore the chart but clear movements mean something, could be insider trading.

I pay some attention to charts though they don't make my decision for me. What you are saying is betraying you as a babe in the woods. Beware the wolf!

Please don't take this badly. You are on the right path. Take our comments in and think about them. What makes a winner is that he/she learns!


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## It's Snake Pliskin (27 February 2006)

wayneL said:
			
		

> Not quite Snake. Dollar cost averaging is when buys occur at regular intervals whether the stock is going down OR up. The price movement is irrelevant
> 
> Averaging down only buys additional shares as the shares become """"cheaper"""".




Yes, but I did say I was putting some positive *spin* on it! Yes it is regular such as 100 units every month regardless of the price.


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## ducati916 (27 February 2006)

*WayneL* 



> Your posts always contain some sort of logic, even if tenuous or faultily constructed because of your emotional bias against t/a-stoplosses etc.




True, my contempt knows no bounds. My emotional control is nonexistent when the whole concept of technical analysis is raised.

But putting all of that aside for a moment;

We have a chart showing an uptrend, defined by higher highs, and higher lows
So far so good.
Along comes Mr Technical analysis, ahhhhhhh, uptrend, and I shall define my uptrend via, trendline, EMA, PP, Horizontal Support, take your pick.
I shall place my stoploss HERE. I draw my line in the sand. If PRICE trades lower than my line in the sand, ID, EOD, EOW, EOM, I am history.

That stoploss is defined by a squiggly line that means what?
It means absolutely nothing. ZERO.

In reality it is dictated by his RISK MANAGEMENT.
I do not know what I am doing, therefore, I must limit my risk, engendered by my pitiful lack of knowledge, and place a stoploss.

Therefore, by definition, as regards positions in stocks, technical traders are accorded no weighting, as their positions will flip-flop like a dying fish, which resembles a lot of their returns.

Take my favorite example of the moment, GOOG.
http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=2;t=000219

Techies........clueless.



> Your logic is self defeating. If trends are largely populated by tech traders, these selfsame traders can hardly be meaningless now can they? And what have stoplosses to do with a trend?




No, we need to sell to someone, and technical analysis is so LAGGING, and the terrible irony is that you think it is the opposite!



> In actual fact tech traders are mostly meaningless (the only sub-point you jagged here) as trends are largely populated by investors...f/a investors! It is they who create the trend. They are the "THEY" that we tech traders refer to obliquely and ad naseum




We create SUPPORT, you guys, the late comers provide the trend for us to realize our profits. The trend ends when we sell, and break the trend, and violate all your squiggly lines.



> Financial market trends are deeply rooted in human psychology and nothing to do with t/a. T/a just plots it on (electronic) graph paper.




Yes they are (psychology)
TA is just nonsense.

*Knobby* 



> Ducat, don't get caught up in the psychobabble that surrounds Warrren Buffett. I invest like you. I do OK.
> If you are talking about noise then ignore the chart but clear movements mean something, could be insider trading.
> I pay some attention to charts though they don't make my decision for me. What you are saying is betraying you as a babe in the woods. Beware the wolf!
> Please don't take this badly. You are on the right path. Take our comments in and think about them. What makes a winner is that he/she learns!




What on earth are you waffling about?


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## wayneL (27 February 2006)

Duc

TA is such a broad church (as is FA  ) I find it comical that you have a single set definition of what a technical trader is and what he/she is trying to achieve, and set about lampooning all TA based on the one model. (TA is lagging? ...like FA isn't? AHAHAHAHAHAHAHAHAHAHAHAHAHAHAAH!)

You can bluster and pontificate all you like. But the reality is journeymen TA traders regularly extract attractive returns from the market. The apprentices and pretenders may struggle, but the jouneymen outperform. (FA practitioners experiences are the same  )

This much even you cannot deny unless you are seriously deluded.

Your continuous bleating about TA being nonsense, and scarcely veiled personal sleights of practitioners, in the face of all evidence to the contrary, is making me seriously question your ability to logic. I mean it's so simple a concept. Your intellectual need for complexity is blinding you to reality. 

Duc, you don't have to look at charts if you don't want to. It's OK, we won't think less of you for that. But it's kind of infantile to argue against reality. We make money. Full stop. Case closed. 

It seems you have this intellectual immaturity that must denigrate all other forms of study in order to justify your own. As a society, most of us moved past that soon after The Inquisition.

The TA traders here have resisted in denigrating FA out of the sense of reality I was speaking of, and out of plain good manners.

Now Puleeeze drop the TA bagging, it is getting monotonous, and it drags the forum down to the level of the rubbish forums around.

State your case for FA, by all means, but c'mon.... reasoned logic only.

Cheers


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## bullmarket (27 February 2006)

Hi ducati 

I disagree with your comment below.



			
				ducati916 said:
			
		

> That stoploss is defined by a squiggly line that means what?
> It means absolutely nothing. ZERO.
> 
> In reality it is dictated by his RISK MANAGEMENT.
> I do not know what I am doing, therefore, I must limit my risk, engendered by my pitiful lack of knowledge, and place a stoploss.




I believe stop losses are a crucial concept that especially short term traders should include in their trading strategies/plan.

*I don't believe at all that a stop loss level means nothing*. What it means to me is that the trader admits that at the stop loss level his/her expected price action did not eventuate (and no-one will have 100% winning trades) and the likelihood of their expectations occuring within a reasonably short time is low.  Hence in order to preserve capital the trader sells out at the stop loss level to look for better opportunities elsewhere.  Obviously everyone will hope their stop loss levels are not hit too often.

_You're going to be hard pressed to convince me that there are not any very successful and profitable technical analysts out there who use stop losses as part of their strategy_.  Some of them even go on to write books about it.   

How a trader sets his/her stop loss levels is purely up to them according to their objectives and risk tolerances as there is no one-size-fits-all method for setting stop losses 

Imo, given that no-one in the long run will have 100% of winning trades the vast majority of traders will most likely experience a large number of small winning trades cancelling out a large number of small losing trades  * (assuming the use of well set stop losses)  *   with then hopefully a few trades going off on reasonably good profit runs.

*Imo Rule #1 in trading is Preserve Your Capital* and using stop losses is a good way to do that.

Good luck with your trading/investing 

cheers

bullmarket


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## wayneL (27 February 2006)

bullmarket said:
			
		

> Hi ducati
> 
> I disagree with your comment below.
> 
> ...




Yes, well reasoned comments Bullmarket.

What works....is real!

Cheers


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## ducati916 (27 February 2006)

*WayneL* 



> TA is such a broad church (as is FA  ) I find it comical that you have a single set definition of what a technical trader is and what he/she is trying to achieve, and set about lampooning all TA based on the one model. (TA is lagging? ...like FA isn't? AHAHAHAHAHAHAHAHAHAHAHAHAHAHAAH!)




Technical trading is not really that broad at all.
In fact its rather limited.
It is trading charts, +/- technical indicators, in a variety of timeframes.
Thats it.

Technical analysis is lagging.
No Fundamentals do not lag.



> You can bluster and pontificate all you like. But the reality is journeymen TA traders regularly extract attractive returns from the market. The apprentices and pretenders may struggle, but the jouneymen outperform. (FA practitioners experiences are the same  )




I have never stated that ALL technical traders lose money.....just most of them.



> Your continuous bleating about TA being nonsense, and scarcely veiled personal sleights of practitioners, in the face of all evidence to the contrary, is making me seriously question your ability to logic. I mean it's so simple a concept. Your intellectual need for complexity is blinding you to reality.




What evidence?
Save TechTrader, I have seen ZERO evidence of consistent success.
In point of fact, most of the public systems, methodologies, have either lost money, or returned so little that it was hardly worth the effort. 



> Duc, you don't have to look at charts if you don't want to. It's OK, we won't think less of you for that. But it's kind of infantile to argue against reality. We make money. Full stop. Case closed.




Thankyou, thats a real relief.
Case closed...................Oh I don't think so.
Apart from tech/a, in Australia, and his TT, I have not seen another (apart from myself) publicly traded series of trades that lasted for any significant period of time. There are many claims, but very little in the way of evidence.

I was tracking a discretionary trader in the UK, who traded via technical analysis, and his results were desultory. 



> It seems you have this intellectual immaturity that must denigrate all other forms of study in order to justify your own. As a society, most of us moved past that soon after The Inquisition.




Not at all.
I illustrate the flaws that I find in TA, anticipating a reasoned argument that will illustrate the fallacy within my logic. Unfortunately, no evidence, or reasoned argument emerges, just the usual attack on personality, intellect, emotional balance, drug useage, etc, etc. Yours is more of the same.



> The TA traders here have resisted in denigrating FA out of the sense of reality I was speaking of, and out of plain good manners.




Nonsense.
They understand so little of Fundamental analysis, they could not even begin to attack it with reasoned argument. What would initially emerge would be the usual brainwashing from authors of technical trading literature.



> Now Puleeeze drop the TA bagging, it is getting monotonous, and it drags the forum down to the level of the rubbish forums around.




Absolutely, the minute someone demonstrates the inherent value that resides within technical analysis. I mean, I am outnumbered on this and other forums, everyone wants to make money, yet, apart from all the usual platitudes, no real thinking seems to emerge.



> State your case for FA, by all means, but c'mon.... reasoned logic only.




Of course.
jog on
d998


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## Knobby22 (27 February 2006)

For the first time ever I have used the ignore button.


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## wayneL (27 February 2006)

Duc

I am allowing you the last word. I have more entertaining things to do than counter every point.

Leave it there.

Fair warning OK?


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## bullmarket (27 February 2006)

Hi ducati 

re your comment quoted below:



> I have never stated that ALL technical traders lose money.....just most of them.




It's widely accepted that less than 10% of traders are profitable (at least to any significant extent) in the long run, so you are not saying anything new there as far as I can see.

What I and others with similar views have been saying about the plusses or whatever re technical analysis, using stop losses, averaging down being a minus etc etc is simply what the overwhelming majority of the 10% of traders that do succeed in the long run are most likely doing.....nothing more, nothing less 

cheers

bullmarket


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## wayneL (27 February 2006)

It should be pointed out, that as recently as January 2004 (and probably even more recently) our Duc was a technical daytrader, posted trades publically and did rather well. 

The implications of this, apart from the glaringly obvious, is that here we have a person with less than 2 years experience in fundamental analysis, speaking with all the authority of Peter Lynch or Warren Buffet.

I leave you all to draw your own conclusions. 

I think this topic, now well off course  should be closed.

Duc,

If you still feel like disclosing your positions, please start another thread, and lets all endeavour to keep that one on track.

Cheers


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