barney said:
Hi guys, (Been out working...late reply!) Thanks Mag thanks Tech and thanks Lesm, for the info/advice/support etc.............Its funny, but I feel like I am getting a "handle" on some of what you guys speak........... I know I am still a "KISS" kinda guy (thank you Coyotte) and I have learned a lot from so many others (too many to mention, but you know who you are), but the concepts of understanding are increasing!! The "market" is a big "washing machine" of business............Good companies do well and "bad companies" we try and steer clear of (the band was good but!!).... We try and invest in the good Co.'s when they are having a short term downslide but showing signs of recovery, (or "short" them when they are achieving above future expectations) (simple explanation, but thats me!)
So from what you say Mag, the more we can understand the "workings" of the market in general, the more chance we have of jumping on a "trend" The "vibrations" are trends within trends so to speak!?, but the overall trend is the most important....If the vibrations take the trend off the apparent path for a short time, we don't need to be concerned???.......................Can I ask you guys, who obviously have great deal of confidence in your trading choices.............do you only set "wide" stop losses on your trades cause you respect that the "vibrations" may "set off" an uneeded early exit??? ,or do you still accept that the "vibrations" may stop you out? (and maybe just buy in again at a lower level...hopefully?)..............Just on vibrations this last week for eg. ..........I have "shorted" ROC (not a lot of shares but just testing the water so to speak)...........My perception was that Oil was going to drop a little further (based on the current chart/news/vibe etc), Now I understand thAT this could quite easily reverse, but I was backing the "trend", and if it goes against me I can wear that, cause I think my logic is sound??? I've kinda lost what I was trying to say/ask, but basically, if you assess the market logically, and apply sound money management, overall you should do OK??...........and if not ...........then find a logical reason why it went against you and "learn" from that .................Does that sound sensible??.....any advice ????..........Cheers, Barney.
Barney,
Forget even thinking about vibration theory at this point, it will only confuse you – it is highly unorthodox, and in the wide scheme of things very obscure (despite the fact I think it works and use it to trade is a choice I have made based on refining my T/A approach over a number of years, and under the mentoring of some very advanced players – you need to find your own way first).
Unfortunately in the process of this thread ranging into involved T/A discussions, I was trying to describe the charts I put up from the discussion with Lesm. Apologies, this stuff really isn’t for beginners at all, and it is highly controversial. In T/A, my “magpie” style is very unorthodox, and heavily customised to my personal preferences, and definitely a minority perspective (my straight charting style is more mainstream, and the Elliott Wave component is pretty much orthodox Prechter and Frost - although even this is not in the majority in technical analysis circles).
You really need a solid understanding of basic T/A concepts first. That’s why I’m suggesting that you consider studying the range of books listed in the previous posts.
Look at the whole gamut of styles, Lesm is an outstanding chartist, Coyotte for example is a Guppy/Wilson practitioner, tech/a is one of the foremost long term system traders, wavepicker is a an Elliot Wave practitioner, Wayne is a consummate options trader, Ducati is a gifted Fundamental analyst for example. There are others of course. All of us have developed a style that we feel comfortable with. Each has wisdom you may choose to draw from.
The concepts that are of use to you is about trying to work out what the main trend is, and realising that in a bullish trend you get “pull backs” – counter trends. The idea is to buy on the pull backs. Same with bear trends. Sell on the bullish counter trends. Sounds easy. It isn’t.
Also, don’t forget that there are players out there that deliberately try to run stops. For instance they may push the price down by shorting the market, and do so until there is a big buy order at a level they are satisfied with, and close out their short position. They then go long, and push the price up, hoping to force those with short positions to cover. Then they sell as the short covering intensifies and the buyers get greedy…
This can be in any time frame, and it is like a huge game of chess as conflicting agendas and strategies play out in the market.
By understanding “trends” and how stocks etc pull back, you can learn how to minimise the situation Great Pig posted on recently where he sold right at the end of a counter trend, only to see the underlying fly up well into the original direction he thought it would go. A common experience for many, and one you need to understand the dynamics of. Even with this understanding, you can still get caught out by the stop running tactics. But if you understand how this works, you stand a better chance of avoiding getting stopped out, and can actually profit from it…
Regards
Magdoran