F/A, T/A or Combo?

[ceasar73]

I am a newbie to this game. I have been an ASF member for two weeks and have been reading past posts with great interest (Im hooked). I guess the main thing I have been trying to establish is whether I'm a F/A , T/A or combination of both. Forum members like( bullmarket,tech/a,edvanhalen,happy trader,bunyip,realist,duc...etc) all make great points - thus making my choice difficult. At the moment - I see the benefits of both methods so at this stage am leaning towards a combo of the two.

With property I am definitely a long term investor. However with shares I see myself as both an investor/trader, heck - why not collect and enjoy my fruits once and a while, cant leave everything to my children right? ;-}

At this early stage my gut feeling is that both f/a and t/a can work if one has common sense and is willing to put in the hard yards.

The fundamentalists do loose me on one point however, I agree that the management of a company is super important and that it would be best to invest in a company with a great management team....BUT how does an investor make this assessment of a companies management team? Unless you have worked with them closely, I would suggest it is near impossible to pick a bad,good or great manager. I would love to hear how the fundies amongst us are able to do this?? Please let me know if I am missing something when it comes to assessing management teams.

I am truly enjoying reading past posts and the recommended books in some of the threads.

Thanks!

ceasar73.

 

[tech/a]

Re: F/A,T/A or Combo?

Analysis is simply the tools to paint the opportunity.

So if these tools were given to you and you made an F18 hornet would you think that youd then be able to fly it??

My point is its not just the tools!
In answer to your question.
Become an expert in something!
F/A T/A or Both.

 

[ceasar73]

Re: F/A,T/A or Combo?

tech/a

I agree. However my question was to the F/A out there regarding management.

thanks.

 

[bvbfan]

Look at the managements ability to deliver on what they have said.

Of the companies I have followed and liked/invested in I could say that management test fails on most companies.

Either they promise something that doesn't occur or they keep pushing back the timeframe for delivery.

Under promise and over achieve may be something these people could learn.

Also look at the pay they receive, if you think they are doing a fair job for the money they receive?
Again the majority of them receive crazy amounts for not much delivery on the share price or forward movement of the company.

 

[nizar]

I just trade the price action.

Good management iv seen the SP rocket or get smashed.
Rubbish management iv seen the SP rocket or get smashed.

JORC announcement iv seen the sp get smashed.
JORC announcement iv seen the sp run like a champion.

Broker upgrades iv seen, the share price get smashed or bought up.

Do i need to know the reason what moves the share price?
NO.
Why?
Because the same cause maybe next time we dont get the same effect.
The only thing thats clear is that (if im long) if the share price goes up, i make money, if not, i lose money. It really is that simple.

Leave the analysis to the analysts who get paid for their "analysis", rather than their trading, we as traders, get paid by trading.

 

[It's Snake Pliskin]

I just trade the price action.

Good management iv seen the SP rocket or get smashed.
Rubbish management iv seen the SP rocket or get smashed.

JORC announcement iv seen the sp get smashed.
JORC announcement iv seen the sp run like a champion.

Broker upgrades iv seen, the share price get smashed or bought up.

Do i need to know the reason what moves the share price?
NO.
Why?
Because the same cause maybe next time we dont get the same effect.
The only thing thats clear is that (if im long) if the share price goes up, i make money, if not, i lose money. It really is that simple.

Leave the analysis to the analysts who get paid for their "analysis", rather than their trading, we as traders, get paid by trading.

I hear echoes of the book to forum kind
I am interested in the highlighted in red sections.

Could you explain "price action" and what it involves to trade it, and how is it different to trading price?
As a trader, what would be some pertinent considerations when faced with "price action" and "liabilities" of the cashflow kind?

 

[nizar]

I hear echoes of the book to forum kind
I am interested in the highlighted in red sections.

Could you explain "price action" and what it involves to trade it, and how is it different to trading price?
As a trader, what would be some pertinent considerations when faced with "price action" and "liabilities" of the cashflow kind?

Well yes what iv learnt from this forum is priceless and thanks to all for that.

Well what i mean by trading the price action, is that i use the price as my indicator whether to buy and sell. Not just the price alone but the trend.

I tend to look for stocks in which the price has "broken out" either from a long stage-1 ie. flat period where trading is between narrow ranges, such as FMG at $22.50-23.00 and AED at $4.50-5.00. These stage-1s can last a while so i wait for the first clear break above this resistance. Eg. the first white candle with AED on strong volume for this move didnt even tempt me, because thats happened before and it got smashed down. But the gap up and the candle into previous unchartered territory meant i had to buy. Or even a break through some historical resistance.

With these moves, basically the more historical the resistance, and the more times its been tested, the more impressive the break.

Also, be careful about placing your stops. I dont place stops in the market anymore, and use EOD stops, i pretty much trade end of day now.

Initially when i started trading i wanted to "daytrade" ie, buy and sell the same day, this cannot be done, at least not by me, and even buy/sell within a few days so you get more of the move, but still, even then, i dont think professionals really clean up by daytrading. With the hours spent in front of the computer, the transaction costs, the stress - its just not worth it.

TRading longterm trends is where the big money is to be made. You dont make quick money, and its much less of an adrenaline rush then those quickies, but im here to WIN (yeah i think thats straight out of a book, LOL).

I like using volume also for confirmation. If i see 2 stocks which have broken out, and capital only for one of them, thats when volume comes into play.

ALso what iv started doing is buying on the breakout a half parcel, and then topping up on the pullback. If the pullback is textbook, like THX was, then you get in after the bounce.

But if theres no pullback that just tells you the strength and momentum of the buyers. See OEL as an example.

Well thats explains your top red section.

The bottom one is just something iv read from Michael who has posted that and i think its rather self-explanatory.

As a trader, what would be some pertinent considerations when faced with "price action" and "liabilities" of the cashflow kind?

As for this, im not sure what you mean, so maybe you can answer this one please snake, you clean up the markets big time thats pretty obvious, i just pick up the crumbs. Id be keen to hear your thoughts.

But thanks for the grilling, got me thinking...

 

[It's Snake Pliskin]

Well yes what iv learnt from this forum is priceless and thanks to all for that.

Well what i mean by trading the price action, is that i use the price as my indicator whether to buy and sell. Not just the price alone but the trend.

I tend to look for stocks in which the price has "broken out" either from a long stage-1 ie. flat period where trading is between narrow ranges, such as FMG at $22.50-23.00 and AED at $4.50-5.00. These stage-1s can last a while so i wait for the first clear break above this resistance. Eg. the first white candle with AED on strong volume for this move didnt even tempt me, because thats happened before and it got smashed down. But the gap up and the candle into previous unchartered territory meant i had to buy. Or even a break through some historical resistance.

With these moves, basically the more historical the resistance, and the more times its been tested, the more impressive the break.

Also, be careful about placing your stops. I dont place stops in the market anymore, and use EOD stops, i pretty much trade end of day now.

Initially when i started trading i wanted to "daytrade" ie, buy and sell the same day, this cannot be done, at least not by me, and even buy/sell within a few days so you get more of the move, but still, even then, i dont think professionals really clean up by daytrading. With the hours spent in front of the computer, the transaction costs, the stress - its just not worth it.

TRading longterm trends is where the big money is to be made. You dont make quick money, and its much less of an adrenaline rush then those quickies, but im here to WIN (yeah i think thats straight out of a book, LOL).

I like using volume also for confirmation. If i see 2 stocks which have broken out, and capital only for one of them, thats when volume comes into play.

ALso what iv started doing is buying on the breakout a half parcel, and then topping up on the pullback. If the pullback is textbook, like THX was, then you get in after the bounce.

But if theres no pullback that just tells you the strength and momentum of the buyers. See OEL as an example.

Well thats explains your top red section.

The bottom one is just something iv read from Michael who has posted that and i think its rather self-explanatory.



As for this, im not sure what you mean, so maybe you can answer this one please snake, you clean up the markets big time thats pretty obvious, i just pick up the crumbs. Id be keen to hear your thoughts.

But thanks for the grilling, got me thinking...

In answer to your forehand, how does price action, price bring home PAY to pay those bills etc? I was just relating the reality of bills etc to the world of paying for them using trading profits.

One knows the life of a bill or debt, liability. But what is the life of a profit in the pocket? No one knows until in hindsight it is realised.

Basically, trading to pay bills before keeping profits is not as easy as books and people lead people to believe.

As an exercise what is your opinion of ROC oiler? I have already made up my mind on it. Is it a long or short?

 

[Dutchy3]

Hi All ... for me TA and then if the chart looks like something I could have a relationship with I do FA in terms of understanding the business and making sure any corporate actions are receiving popular support.

 

[nizar]

In answer to your forehand, how does price action, price bring home PAY to pay those bills etc? I was just relating the reality of bills etc to the world of paying for them using trading profits.

One knows the life of a bill or debt, liability. But what is the life of a profit in the pocket? No one knows until in hindsight it is realised.

Basically, trading to pay bills before keeping profits is not as easy as books and people lead people to believe.

As an exercise what is your opinion of ROC oiler? I have already made up my mind on it. Is it a long or short?

Snake.
For me, circumstances are different, paying bills and day to day expenditures is from my working income (i got a day job) and the stock trading is for long term capital growth where everything is reinvested.

ROC looks good, clear uptrend, more volume on the updays compared to the downdays, i would not take a position now personally but rather see which way it breaks, its been sideways last 6 trading days and could go sideways for who knows how long, so i would wait for the breakout. But thats only because i trade a daily timeframe.

 

[stargazer]

Hi Nizar

Interesting area this PRICE ACTION.

With all the companies on the ASX what alerts you to the PRiCE ACTION of a company to start to look at it a bit closer?

What time frame do you put on it?

When do you Sell?

Do you take the days price on close and monitor if Higher than previous day etc.

Could you cite an example

Cheers
SG

 

[nizar]

Hi Nizar

Interesting area this PRICE ACTION.

With all the companies on the ASX what alerts you to the PRiCE ACTION of a company to start to look at it a bit closer?

What time frame do you put on it?

When do you Sell?

Do you take the days price on close and monitor if Higher than previous day etc.

Could you cite an example

Cheers
SG

I basically look for breakouts, or even stocks which are consolidating in tight ranges. I saw NWE at .19 but it was still consolidating between .175-.19. So i kept it on the watchlist, when it closed above 20c and volume confirmation was there i got some at .205.

AED i saw it at $5. Damn it was there for ages. DIdnt touch it until it broke out. The first white candle of this run took it to $5.10 the close on volume, i wasnt convinced, this has happened before and it got smashed down into the $4s. So i waited for the next day, it gapped up and another white candle into blue skies, i knew i had to get it, so i bought at the next day open at 5.43.

I look at daily charts.
I sell when the initial stop is hit if not then i let them ride until an exit is triggered.

My exit differs for each system, one of them im using is a time stop.

Still very busy havent had time to work on systems development as yet, so basically im taking my short term trading style (which is discretionary with placement of stops according to support/resisance), but with a longer timeframe.

 

[stargazer]

Thanks Nizar

Cheers
SG

 

[Julia]

Good management iv seen the SP rocket or get smashed.
Rubbish management iv seen the SP rocket or get smashed.

JORC announcement iv seen the sp get smashed.
JORC announcement iv seen the sp run like a champion.

Broker upgrades iv seen, the share price get smashed or bought up.

This is a good point. Market sentiment can override the fundamentals.
An example is Wesfarmers (WES) which is widely held to be very well managed. However, in five years the SP has only risen from about $28 to $38.

 

[It's Snake Pliskin]

This is a good point. Market sentiment can override the fundamentals.
An example is Wesfarmers (WES) which is widely held to be very well managed. However, in five years the SP has only risen from about $28 to $38.

Yes Julia,

Good management doesn't always relate to lots of share price appreciation.

Julia I'm thinking of moving to QLD is the weather worth it?

Snake

 

[It's Snake Pliskin]

Snake.
For me, circumstances are different, paying bills and day to day expenditures is from my working income (i got a day job) and the stock trading is for long term capital growth where everything is reinvested.

ROC looks good, clear uptrend, more volume on the updays compared to the downdays, i would not take a position now personally but rather see which way it breaks, its been sideways last 6 trading days and could go sideways for who knows how long, so i would wait for the breakout. But thats only because i trade a daily timeframe.

Oh yes that breakout, (with a wry smile).
Lets see where it goes.

 

[ducati916]

The fundamentalists do loose me on one point however, I agree that the management of a company is super important and that it would be best to invest in a company with a great management team....BUT how does an investor make this assessment of a companies management team? Unless you have worked with them closely, I would suggest it is near impossible to pick a bad,good or great manager. I would love to hear how the fundies amongst us are able to do this?? Please let me know if I am missing something when it comes to assessing management teams.

The answer is in two parts. The first part someone has already illustrated. If management promise and deliver...or promise and fail.

The second, their results reflect themselves in the operating results.
If their results are consistently good, transparent, honest, you have good management.

If they are good results but are opaque, manipulated, then they are not so good.

jog on
d998

 

[tech/a]

If they are good results but are opaque, manipulated, then they are not so good.

How on EARTH do you determine that from a report?
Technical analysis is said to be voodoo!!

 

[ceasar73]

The answer is in two parts. The first part someone has already illustrated. If management promise and deliver...or promise and fail.

The second, their results reflect themselves in the operating results.
If their results are consistently good, transparent, honest, you have good management.

If they are good results but are opaque, manipulated, then they are not so good.

jog on
d998

duc,

1- If management promise and fail its already too late (investor looses). Also - great management teams can promise and fail. Failure does not mean management is bad.

2- tech/a makes a good point here.

As i said previously, im new to this, im more of a f/a than t/a. I dont think an inverstor can ever be certain about the the quality of management - unless of course they do a buffet and replace management with thier own team.

thanks to very one for their great replies.

ceasar.

 

[ceasar73]

I just trade the price action.

Good management iv seen the SP rocket or get smashed.
Rubbish management iv seen the SP rocket or get smashed.

JORC announcement iv seen the sp get smashed.
JORC announcement iv seen the sp run like a champion.

Broker upgrades iv seen, the share price get smashed or bought up.

Do i need to know the reason what moves the share price?
NO.
Why?
Because the same cause maybe next time we dont get the same effect.
The only thing thats clear is that (if im long) if the share price goes up, i make money, if not, i lose money. It really is that simple.

Leave the analysis to the analysts who get paid for their "analysis", rather than their trading, we as traders, get paid by trading.

hard to argue with this nizzar. you make a good point here.

thanks.

ceasar.