Is it possible to over analyze?

[rjay49]

I have reposted this as i think i put on wrong forum, sorry about that.

i have just joined forum. I have been trading only in my 2nd year and have up till today done quite well trading. I am 61 and now make most of my spending money from shares. I trade sometimes 5-10 trades a day but sometimes im lazy and dont.My question to you all, can a person over Analise.? I have never used charts or stuff that people talk abut on here. I use volume, trends, and an average of data over the all time data of the company, sounds like im doing it wrong, but the 2 years end of year profits are both over 60% as my accountant put it you are either doing it right or you are just lucky. I know i will have to learn more and am hoping to, so feedback is appreciated.
Thanks

 

[mikedsilva]

Re: A newcomer to forum

you sound lucky to me...

i've been doing this with some advice over the last 5 years and so far am down about 20%...
Then again, I wasnt actively trading... more buy and hold...

 

[joea]

Re: A newcomer to forum

Hi rjay49

What works for you is the way to go.
I know a trader who has used just a broker all his like. His stocks are valued in excess of $2million. i.e. CEY he is ahead $253,000.

Trading software takes people on different journey's. In this day and age there are platforms to trade from such as Pulse, and then there are software packages with scanning, charting, papertrading and testing facilities.

For example Paritech have Pluse as platform, Metastock as end of day scanning facility which allows you to allocate entry and exit indicators.
MDS news has Market Analyser as charting, and The Bourse as the platform.

Finally Paritech is one site you can visit and and decide for your self.
It also has a training package that teaches you. It also had a scan called Marketscan in the platform but I do not know what is in the package now.
However I can say that Pulse is a good package to start with to trade regularly, and if you use fundamental and if your are interested in news updates for your stocks. However computer literacy is necessary.
Cheers

 

[Gringotts Bank]

I think analysis is extremely important when you're not getting the returns you want. When you're consistently getting what you want, the less analysis the better.

Since you're doing well, I wouldn't consider analysing anything. Just keep on.

 

[Trevoru]

Rjay - even the dudes on the big bucks with access to every concievable annalytical tool get it wrong. DYOR in any way you feel comfortable - you're doing well at the moment so keep on doing it and make adjustments to how you are trading if it stops working. Cheers TU.

 

[skc]

I have reposted this as i think i put on wrong forum, sorry about that.

i have just joined forum. I have been trading only in my 2nd year and have up till today done quite well trading. I am 61 and now make most of my spending money from shares. I trade sometimes 5-10 trades a day but sometimes im lazy and dont.My question to you all, can a person over Analise.? I have never used charts or stuff that people talk abut on here. I use volume, trends, and an average of data over the all time data of the company, sounds like im doing it wrong, but the 2 years end of year profits are both over 60% as my accountant put it you are either doing it right or you are just lucky. I know i will have to learn more and am hoping to, so feedback is appreciated.
Thanks

There is no such thing as wrong but profitable trading methodology. If you are using a dart board and been consistently profitable then you have been lucky, but if you have been using a consistent strategy that is grounded on some underlying belief in market structure then there is a good chance you are doing something right.

If you really want to make sure that you are not just a statistical abnomrality, you can try to analyse your methodology using historical data and see if the profitability was consistent.

Analysis is an important part of trading and it helps you understand why/where your strategy makes money, establish expectancies so you know when things are no longer working and it allows you to find levers to improve your overall profitability. In summary - you need to know your methodology intimately, and not just use it like a black box and hope it works into the future.

You shouldn't worry too much about what others do - there are plenty of witchcrafts out there that are best ignored. Good luck with your trading.

Although I am curious as to how you see trends without the use of charts?

 

[Julia]

Although I am curious as to how you see trends without the use of charts?

I'm wondering about this too?
But congratulations on a good result. You're beating a lot of so called professional fund managers out there.

 

[ThingyMajiggy]

Although I am curious as to how you see trends without the use of charts?

I'm wondering about this too?

Are you two serious? You seriously haven't witnessed any trends before without looking at a chart? Wow.

 

[Gringotts Bank]

You pick up the finance section of the newspaper and see that stock XYZ just keeps goin' up each day. That's an uptrend.

 

[skc]

Are you two serious? You seriously haven't witnessed any trends before without looking at a chart? Wow.

I am asking how he pick trend without using a chart. I am not saying you can't pick trend without using a chart. So don't put words in my post please.

 

[ThingyMajiggy]

I am asking how he pick trend without using a chart. I am not saying you can't pick trend without using a chart. So don't put words in my post please.

What are you on???? Show me which part of my post is putting those words "into" your post? I never said you said that. You're wondering how he picks trends without using a chart, correct? I'm wondering if you seriously need to see a chart before you can identify a trend.

Not putting anything into anyones post, jeepers. Wrong time of the month or something?

 

[Boggo]

Rjay - even the dudes on the big bucks with access to every concievable annalytical tool get it wrong.

I am definitely not a dude with big bucks nor do I have every analytical tool but a simple fact of (trading) life is that you will have more losers than winners full stop.

If anyone tells you otherwise then they are either lucky, a liar or they are selling a system.

Its how you manage the losing trades that keep you in the market without losing your shirt.

Below is a Tradesim Report extract from my Metastock support/resistance breakout system report which assumes that I continued to trade it continously over seven years including through the GFC.

Note the losers vs winners and the win/loss ratio.

.

 

[wayneL]

I am definitely not a dude with big bucks nor do I have every analytical tool but a simple fact of (trading) life is that you will have more losers than winners full stop.

If anyone tells you otherwise then they are either lucky, a liar or they are selling a system.

Its how you manage the losing trades that keep you in the market without losing your shirt.
.

The number of winners and losers is irrelevant.

I trade a system that win way in excess of 50%... but it doesn't mean it's better than a system that winn only 40% of the time

It's how much you win when you when and how much you lose when you lose.

(which is kinda what you are saying, but just wanted to point out there are high win % systems)

 

[Boggo]

I trade a system that win way in excess of 50%...

Not many systems can average that over the long term, keep that working.

It's how much you win when you when and how much you lose when you lose.

Agree, basic win/loss ratio, controlling how much you lose is the key.

 

[wayneL]

Not many systems can average that over the long term, keep that working.

It's not that hard, but it does involve options. But like I say, the win % is irrelevant.

 

[rjay49]

Hi all thanks for the replies i have learnt a bit from them.Firstly my method so far Its probably embarrassing but its worked so far BUT i am going to do a bit more to make my decisions. The trend is not like probably trend that the experts refer as trend, I use Comsec iress and use the buying trends on the day, it tells when things are buying up or down. As i am trading good size amounts of money and only trade in Oil, Gas, and resource, (this is the field i understand), my theory is if i dont understand it i wont trade it.I only trade stocks of low prices prob penny stocks and it only has to rise a few parts of a cent or even 1 cent and i have made a very good profit. I rarely trade a stock over 20 cents.Sometimes i only make $500 a trade but i might do that 2 or 3 times a day so $1500 in a few hours to me who has worked hard and long all my life is good money, maybe not to some of you but to me its ok. I started out with $5000 and that money was interest from investment account, so start up cost me nothing. I have had 2 financial years of over $60000, for me to earn that working is long and hard.Now back to my way of doing things, as mentioned i use the buying up trend on iress, the historical data, i look at the data from 1 year-5 year if they have been around that long, and look at the highs and lows, and see what caused those highs and lows from announcements, research etc, then i go with a gut feeling where i could see it getting to again then drop my bid down a bit lower than that.I know to the experts you are probably falling off your seats in laughter but hey at the moment it works for me. I do a lot of research before making a bid sometimes days or even weeks and have that many watch lists, my laptop resembles a war field, so im not just rushing in and taking a punt.I have lost as well so its not all been plain sailing, and im a very realistic guy who has worked to hard to lose it, and only ever work with profits, from trades, i put those profits in a separate account, and that is my float, but have on occasions pinched a bit out of other account but not often. My discipline isn't that great, and on occasions hold on to a stock that i have a good feeling about, and that is something im working on.So after this long boring chat i am going to learn more now i am almost retired(computer Industry), and i look forward to this forum to get a few ideas on how i can.To all that replied i thank you for your time and respect your views good or bad as im just a learner.

 

[So_Cynical]

I am definitely not a dude with big bucks nor do I have every analytical tool but a simple fact of (trading) life is that you will have more losers than winners full stop.

If anyone tells you otherwise then they are either lucky, a liar or they are selling a system.

LOL your very busy Boggo i have no trouble getting more winners than losers and im not selling anything thou will admit ive been a little lucky, prob not a fair comparison thou..i only average a trade every 5 weeks.
~

 

[Julia]

Are you two serious? You seriously haven't witnessed any trends before without looking at a chart? Wow.

You pick up the finance section of the newspaper and see that stock XYZ just keeps goin' up each day. That's an uptrend.

OK, fair enough. It just seems rather a cumbersome way to identify trends when a very basic comprehension of charting will give you a clear picture in various time frames, smoothed out via the moving averages etc.

And if you're wanting to consider how a stock has performed over, say, three or five years, how do you achieve that without using a chart?

I'm not at all being critical of any approach that's successful, but am simply interested.

 

[rjay49]

OK, fair enough. It just seems rather a cumbersome way to identify trends when a very basic comprehension of charting will give you a clear picture in various time frames, smoothed out via the moving averages etc.

And if you're wanting to consider how a stock has performed over, say, three or five years, how do you achieve that without using a chart?

I'm not at all being critical of any approach that's successful, but am simply interested.

Hi yes i forgot to mention i just use the charts on comsec and look back at highs and lows so yes i do use a chart of sorts

 

[white_crane]

Firstly, welcome to the forum

Mate, I think you should just keep on doing what you are already doing. You have a system based on your own method of analysis and it's working! Whatever you do, don't go thinking you have to change anything because Tom, Dick or Harry has some system that they use that involves 34253424 indicators coupled with mind-bending mathematical analysis etc. - the chances are, it wouldn't work for you anyway. And that's the important thing, you've got something that works for you.

Good luck.