How do you pick stocks with an emerging trend?

[PeterJ]

Simon and Kam75's posts

are the two of the most important on this forum

IF you want to be successful at trading

Peter

 

[It's Snake Pliskin]

Simon and Kam75's posts

are the two of the most important on this forum

IF you want to be successful at trading

Peter

Hello PeterJ,

Why are their posts the most important on this forum? Could you elaborate as to why you see it that way?

 

[ceasar73]

Simon and Kam75's posts

are the two of the most important on this forum

IF you want to be successful at trading

Peter

Agree 100%...I get the feeling these two guys know their stuff.

ceasar73

 

[Nero64]

CrazynWild read Master the Markets to learn about price and volume.

Simoncar do you leverage with CFD's or just use plain equity unleveraged?

Is Trading your full time occupation?

 

[PeterJ]

Snake IMO they are two of the most important, not the only ones

to help you make money, which is what it is all about i believe.

and that advice will help get you there quicker

Volume and rising On Balance Volume are critical for a stock to rise

example attached

cheers

Peter

 

[simoncar]

Hi Nero, yes I leverage with CFD's but I make sure I stick to my risk parameters. The main reason I use CFD's is the cheaper brokerage and the ability to go short. I don't trade full time as I don't have to. I have a great job I love, as a full time firefighter, and as this involves shiftwork it gives me plenty of time to trade. Although time wise I spend more time trading than at the fire station! So I'm not sure which one is my primary job and which is my secondary. Sorry....when I say trading I am not actually buying and selling all the time....it may involve reading a good trading book, studying charts etc. I have designed my trading system to fit into my lifestyle and to fit my personality. Looking back on my posts I feel I left out an important bit of advice. I will use daily charts as an example...open up a chart from your charting program to the current date. Now go back in data (time ) as far as you can. Now progress forward day by day. Try and predict what price may do the next day. This is how I learnt. This is the best way I know of to try and perfect your trade management too (you will never perfect it by the way). I do this walk forward testing until I see a set up for entry. Then I would say to myself....buy at this point with an initial stop at this point....then I would go forward day by day hypothetically managing my trade. IMPORTANT.... you won't find a way that works all the time..you just need to find a system that works reasonably well most of the time.

 

[It's Snake Pliskin]

to help you make money, which is what it is all about i believe.

and that advice will help get you there quicker

What it is all about, is what? And get where quicker?

 

[ceasar73]

Hi Nero, yes I leverage with CFD's but I make sure I stick to my risk parameters. The main reason I use CFD's is the cheaper brokerage and the ability to go short. I don't trade full time as I don't have to. I have a great job I love, as a full time firefighter, and as this involves shiftwork it gives me plenty of time to trade. Although time wise I spend more time trading than at the fire station! So I'm not sure which one is my primary job and which is my secondary. Sorry....when I say trading I am not actually buying and selling all the time....it may involve reading a good trading book, studying charts etc. I have designed my trading system to fit into my lifestyle and to fit my personality. Looking back on my posts I feel I left out an important bit of advice. I will use daily charts as an example...open up a chart from your charting program to the current date. Now go back in data (time ) as far as you can. Now progress forward day by day. Try and predict what price may do the next day. This is how I learnt. This is the best way I know of to try and perfect your trade management too (you will never perfect it by the way). I do this walk forward testing until I see a set up for entry. Then I would say to myself....buy at this point with an initial stop at this point....then I would go forward day by day hypothetically managing my trade. IMPORTANT.... you won't find a way that works all the time..you just need to find a system that works reasonably well most of the time.

I was wondering how you managed to study charts for 8 hours a day...your a firefighter! makes sense now.
whats the pay like?

 

[beamstas]

Try and predict what price may do the next day.

This is where most people go wrong

 

[simoncar]

8th-May-2009, 08:20 PM #29
beamstas




Join Date: Sep 2008
Posts: 445 Re: Does anyone mind analysing a graph for me?

--------------------------------------------------------------------------------

Was meant to say no better chance

I use T/a
Why?
Because it helps me feel like i can predict a price move
But i still can't!
__________________
Averaging down is simply compounding your losses


Not correct at all Beamstas. You even have stated that t/a helps you feel like you can predict a price move. If you cant predict/anticipate where price will go next, how do you enter a trade? Every time you enter a trade you are predicting it will go a certain way. If it doesn't go the way you predict you will get stopped out at your initial stop loss point. Assuming you have one. If it goes the way you predicted your trade management rules come into play. If I see a stock that has gone up on good volume and retraces on low volume to a certain area I may enter a long position (depending on other factors also). I will only enter if I can place my initial stop at a point that I believe ( because we are only trading our beliefs in the market) is the point at which I no longer want to be holding the position. 'The market will either go the way I hope or it wont. I can only be a participant in the game. I will do so only on low risk for a high reward. But if I never predicted which way a stock would move I still wouldn't have entered my first trade.

 

[simoncar]

Hi Caesar, trading pays alot better than firefighting!!! Although with firefighting you earn your money straight away as opposed to trading where you may not earn too much or even go backwards in capital whilst going through the learning process.

 

[doogie_goes_off]

Watching/studying lots of charts is a very good start. Add research to this ie: some basic fundamentals like market cap and checking the cash position and previous quarters cash burn rate etc will leave you in a much better position to identify downside risk, the worst thing you can do is believe that the only way is up for a particular stock. It's a check and balance that the smart money already factors in for the top 300 or so stocks so it's hard to swim against the tide in these ones. Charting is one thing, preparing for entry is another. When you are sure the downside risk is low and the charting stars allign - enter but dont expect 100% sucess (hence the monopoly money advice). You need to beat the average, 50% of all losses are fate - accept this and move on don't for too long, each one is a learning experience. Next time you will have a better chance of identifying the risk with whatever research you can muster. Everyone is getting paid for the time they critically think about a stocks potential, whether the movement is up or down. The glass is half full and half empty, a chart does not tip it over the edge, confidence does, and confidence can be people/activity or even stupidity, although the market is rarely a stupid beast on the whole. A fundamentally good stock will emerge when their core businesses outperform the trend, sometimes this is delayed, call it 'blind sector lag' ie: people don't identify that company x is about to produce product y and the demand for product y is undersupplied. Research harder than anyone else and you may trade for profit but cross that tipping point without some fact then it's welcome to the blind loss where you learn you should have done some fundamental research. Good Luck.