Letting profits run versus selling at target price

[Julia]

I'm happy to keep it very simple: just stay on a rising trend with no nominated exit target price.
I don't mind giving back a bit of profit by missing the absolute start of a downtrend.
Ditto re applying the same principle to the overall market and other asset classes.
If property looked like really taking off again as it did in the 80's where you could double your capital in not much over a year, I'd whack everything into that.

I did get caught out with one stock some years ago, can't now even remember what it was, when a rather nasty profit warning at the open sent the stock plunging almost 50%.

 

[tech/a]

I'm happy to keep it very simple: just stay on a rising trend with no nominated exit target price.
I don't mind giving back a bit of profit by missing the absolute start of a downtrend.
Ditto re applying the same principle to the overall market and other asset classes.
If property looked like really taking off again as it did in the 80's where you could double your capital in not much over a year, I'd whack everything into that.

Missed it Julia that was 1996-2006

 

[robusta]

I did get caught out with one stock some years ago, can't now even remember what it was, when a rather nasty profit warning at the open sent the stock plunging almost 50%.

That is the danger I have been considering, looking at a lot of low liquidity stocks in my portfolio. Take for example OKN that I have just sold. If the price fell 30-50% I would be more inclined to hold or add to my holding. All else being equal. The stop loss would cause me to sell at precisely the wrong time for my investment strategy.

 

[peter2]

Robusta: You intend to become a long term investor not a technical trader, I agree with Julia, keep it simple. Your exits should be limited to a change in company fundamentals or unsuitable economic conditions. SKC compiled a good thread on trading with fundamentals (IMO It should be archived as a classic thread.)

Value investors buy when conditions seem bad and sell years later when prices are ridiculously above IV. I would suggest that you consider using some form of trailing stop only when you have identified that the SP is historically highly overpriced. Trend traders know that trends can last much longer then we think, so investors need to be able to stick with them as well.

Investors ride the big waves of economic cycles, not the ripples of sentimental momentum. Your exit strategy should be geared to deliver what you need based on your investment goals. You have to think long term. The last two years have been great years for a value investor to accumulate shares in solid companies at very low prices. You can't expect to make money during these accumulation years but you can expect to makes heaps during the growth phase. Your payoff is in 3-5 years time. Why sell now when economic conditions are improving?

IMO you should be fully invested for the next five years and working hard to add capital. Yes, you will see one of your stocks crash and burn. You won't be able to avoid it, but you can make sure that the damage is small.
Don't become distracted by short term sentiment. Know where we are in the larger economic cycle.

 

[Ves]

Robusta: You intend to become a long term investor not a technical trader, I agree with Julia, keep it simple. Your exits should be limited to a change in company fundamentals or unsuitable economic conditions. SKC compiled a good thread on trading with fundamentals (IMO It should be archived as a classic thread.)

Value investors buy when conditions seem bad and sell years later when prices are ridiculously above IV. I would suggest that you consider using some form of trailing stop only when you have identified that the SP is historically highly overpriced. Trend traders know that trends can last much longer then we think, so investors need to be able to stick with them as well.

Investors ride the big waves of economic cycles, not the ripples of sentimental momentum. Your exit strategy should be geared to deliver what you need based on your investment goals. You have to think long term. The last two years have been great years for a value investor to accumulate shares in solid companies at very low prices. You can't expect to make money during these accumulation years but you can expect to makes heaps during the growth phase. Your payoff is in 3-5 years time. Why sell now when economic conditions are improving?

IMO you should be fully invested for the next five years and working hard to add capital. Yes, you will see one of your stocks crash and burn. You won't be able to avoid it, but you can make sure that the damage is small.
Don't become distracted by short term sentiment. Know where we are in the larger economic cycle.

Great post +1.

 

[robusta]

Robusta: You intend to become a long term investor not a technical trader, I agree with Julia, keep it simple. Your exits should be limited to a change in company fundamentals or unsuitable economic conditions. SKC compiled a good thread on trading with fundamentals (IMO It should be archived as a classic thread.)

Agree regarding the SKC thread it is a classic.

I would add two selling criteria however, rectifying a poor initial buy decision and portfolio management.

Value investors buy when conditions seem bad and sell years later when prices are ridiculously above IV. I would suggest that you consider using some form of trailing stop only when you have identified that the SP is historically highly overpriced. Trend traders know that trends can last much longer then we think, so investors need to be able to stick with them as well.

Very good point, I am considering using trailing stops with my larger caps but the price would have to appreciate markedly from where they are today.

Investors ride the big waves of economic cycles, not the ripples of sentimental momentum. Your exit strategy should be geared to deliver what you need based on your investment goals. You have to think long term. The last two years have been great years for a value investor to accumulate shares in solid companies at very low prices. You can't expect to make money during these accumulation years but you can expect to makes heaps during the growth phase. Your payoff is in 3-5 years time. Why sell now when economic conditions are improving?

Not sure how qualified I am to judge economic conditions, the core of my portfolio however is held for the long term.

IMO you should be fully invested for the next five years and working hard to add capital. Yes, you will see one of your stocks crash and burn. You won't be able to avoid it, but you can make sure that the damage is small.
Don't become distracted by short term sentiment. Know where we are in the larger economic cycle.

It is difficult not to be distracted by the recent risk on/risk off markets. My goal is to fill the portfolio with quality businesses with a competitive advantage, I believe I hold a few of these. In the short to medium term I will cull those that are not the highest quality when the market is risk on and buy any bright prospects when the market is risk off.

Thank you for a excellent post peter2

 

[systematic]

A couple random comments:

Great post Peter2. I agree: investors (or longer term traders) ride the big(ger) waves. So the main point here in my opinion...whatever you do, make sure that your stop policy (including not having one) helps you fulfill your goal.

It might be blindingly obvious, but an extremely simple example: Joe Blow (not the ASF one, the other one, lol)...has an SMSF, starts doing his own stock picking, wants to tend to his investments perhaps on the weekends, and would like most trades to last a year or more if possible. Let's say he subscribes to a good fundamental based newsletter or something, and decides to use those as his universe to explore further. Reads a book that talks about tight stop losses in some shorter term trading system, or reads about using trailing stops somewhere and decides to run a 5% or 10% trailing stop on his trades.

Hmmm. Joe Blow now has a major problem. No congruency with what he was trying to acheive. His new trading rule has him in and out of the market, looking for replacement stocks and checking the latest prices far more than he intended to. Not a good recipe for sticking to a system (not to say anything about lack of testing).


Anyway, enough of that.

So_Cynical's post reminded me of Van Tharpe's Safe Strategies book that mentioned taking 2/3rds of a trade off when up 50%, leaving the rest on for a "risk free" trade (similar to setting stop to breakeven really - but your money is out of the market).

Also reminds me of Ben Graham (when he had his quant / systematic hat on). I've not really had an interest in profit taking (like many, I prefer to be kicked out of a trade). But you learn something new every day. Saw a Ben Graham system tested that included a time stop (nothing new there) and a profit taking stop. i.e. if a stock gets to your profit level before the time cutoff, you're out (and obviously, if not you're out at the time cut off).
Worked just fine (US stocks).

I still don't think it makes sense in a real world way - why get out of a stock that's been going so great for you?) - but if it can work, it can work, and if it's a rule that keeps Joe Blow better able to stick to his system, then it may well be worth it.

 

[Julia]

Missed it Julia that was 1996-2006

I was talking about my own experience in New Zealand in the late 80's.
I have absolutely no experience of house prices in Queensland doubling in a bit over a year at any time during the period you refer to above.

 

[howardbandy]

Greetings --

Whether a particular type of exit is appropriate for a trading system depends a lot on the design of the system. For simplicity, I'll divide systems into:
TF. Those that hold a long time (more than a week or so) and are looking for a large gain by trading with a trend.
MR. Those that hold a short time (a day to a week) and are looking for a smaller gain by trading a mean reversion.

There are five general method for exiting a trade:
1. Logic -- the rules.
2. Profit target.
3. Maximum holding period.
4. Trailing exit.
5. Maximum loss exit.

TF systems -- trend following systems.
1. Logic. It is always appropriate to have an exit caused by a rule. The exit rule does not have to be the same type as the entry rule, and even if it is the same type, it does not have to be symmetric in its parameters.
2. Profit target. Every exit should occur often enough so that it can be tested and measured. Whenever a profit target is hit, that truncates the profit of the trade. Setting a profit target limits the ability of a trend following system to hold winners. Profit targets are not appropriate for trend following systems.
3. Maximum holding period. Similar to profit targets, holding period exits are not appropriate for trend following systems.
4. Trailing exits. Two commonly used trailing exits are Chandelier and Parabolic. Both are appropriate for trend following systems. When using the Chandelier exit, some open profit is always given back because the exit level remains fixed when the issue price stops moving upward. The exit occurs when the price falls down to the level of the exit. When using the Parabolic exit, the exit level continues to rise, even when the price remains the same for a number of bars. The exit occurs when the price and the exit level meet.
5. Maximum loss exits. This is the exit set when using the advice to "know your exit when you enter your trade." Maximum loss exits can be useful for trend following systems. If a trailing exit is also being used, the exit will take place at the level that is closest, so the initial level of the trailing exit can be used as a maximum loss exit.

MR systems -- Mean reversion systems.
1. Logic. It is always appropriate to have an exit based on rules.
2. Profit target. Mean reversion systems are looking for a high percentage of winning trades. The maximum profit available is limited by the amount the price had deviated from the mean when the trade was entered. Using SPY as an example, there are about 24 opportunities a year to take long trades that are one to five days in length. The typical maximum profit of those is about 1 percent. Setting a profit target is appropriate when the profit target is on the order of the typical maximum profit. Profit targets of 0.5 to 1.0 percent are appropriate for SPY for mean reversion systems.
3. Holding period. Mean reversion trades are usually complete with five days, so setting a maximum holding period of about the length of time it takes for the price to revert to the mean is appropriate.
4. Trailing exit. If the data used to develop and trade the system is daily bars, in most cases there are not enough bars for the trade to become established and the trailing exit level to catch up to the price. If you want to use a trailing exit with a mean reversion system:
A. Use Parabolic rather than Chandelier.
B. Use multiple time frames, with the trailing exit based on intra-day bars.
5. Maximum loss exit. Without exception -- maximum loss exits hurt the performance of mean reversion systems.

As always, code your system into the language of a trading system development platform and test it. Every exit should occur often enough that the tests are meaningful.

My newest book, "Mean Reversion Trading Systems," is in printing production this week. It has more detailed explanations of mean reversion system and exit techniques, including ready-to-run AmiBroker code. You can learn more about the book and read the first three chapters at the book's website:
www.MeanReversionTradingSystems.com

Thanks for listening,
Howard

 

[DocK]

I'm happy to keep it very simple: just stay on a rising trend with no nominated exit target price.
I don't mind giving back a bit of profit by missing the absolute start of a downtrend.
Ditto re applying the same principle to the overall market and other asset classes.
If property looked like really taking off again as it did in the 80's where you could double your capital in not much over a year, I'd whack everything into that.

I did get caught out with one stock some years ago, can't now even remember what it was, when a rather nasty profit warning at the open sent the stock plunging almost 50%.

How do you select your individual share purchases and their exits Julia? I know you're not in the market atm, but if you were to begin reinvesting in shares, what are your criteria - do you use a system, or are your purchases made on a discretionary basis? Likewise with exits, do you have a strict rule that you follow (% price decline/prior support broken etc) or is it more arbitrary?

I got caught not long ago with Hills Holdings - closed one day at $1.15 and the next at 0.75c after a rather nasty market update.

 

[DocK]

Greetings --

Whether a particular type of exit is appropriate for a trading system depends a lot on the design of the system. For simplicity, I'll divide systems into:
TF. Those that hold a long time (more than a week or so) and are looking for a large gain by trading with a trend.
MR. Those that hold a short time (a day to a week) and are looking for a smaller gain by trading a mean reversion.
(snip)

Thanks for listening,
Howard

Thank you Howard for an interesting and informative post.

 

[tech/a]

Robusta: You intend to become a long term investor not a technical trader,

Peter why cant an investor invest technically? There are some great interviews I've read with technical investors who use a 1 mth time frame.

I agree with Julia, keep it simple. Your exits should be limited to a change in company fundamentals or unsuitable economic conditions. SKC compiled a good thread on trading with fundamentals (IMO It should be archived as a classic thread.)

Agree but also agree with Robusta's added exit conditions. But simple should be evolved not purely initiated.

Value investors buy when conditions seem bad and sell years later when prices are ridiculously above IV

.

Correct me if wrong but I thought value investing was identifying a stock trading below its intrinsic value. Very little if anything to do with "conditions"?

I would suggest that you consider using some form of trailing stop only when you have identified that the SP is historically highly overpriced. Trend traders know that trends can last much longer then we think, so investors need to be able to stick with them as well.

Testing would possibly validate this idea.

Investors ride the big waves of economic cycles, not the ripples of sentimental momentum. Your exit strategy should be geared to deliver what you need based on your investment goals. You have to think long term.

Could you elaborate on this a little more? I'm presuming as a passive income or annuity perhaps and of course tax considerations. But again this would be hard to adhere to if Market conditions went Pear shaped.

The last two years have been great years for a value investor to accumulate shares in solid companies at very low prices. You can't expect to make money during these accumulation years but you can expect to makes heaps during the growth phase. Your payoff is in 3-5 years time. Why sell now when economic conditions are improving?

There are a few who see the current ranging (Last 2 years) as Distribution. Neither accumulation OR Distribution have been confirmed.
I would certainly argue that I cannot see the improvement you mention in macro economic conditions-even micro.
I really dont know that buying your brains out now is a wise idea. the next dip may not be a dip but a bear trend of catastrophic proportions---if you have a contingency for this then fine. A few of us are sitting on the side lines---portfolio wise.

IMO you should be fully invested for the next five years and working hard to add capital. Yes, you will see one of your stocks crash and burn. You won't be able to avoid it, but you can make sure that the damage is small.
Don't become distracted by short term sentiment. Know where we are in the larger economic cycle.

You speak of cycles yet Im seeing some serious economic anomalies not seen before in the western financial system.
I'm also seeing governments struggling/not to handle/handling them. Short term sentiment? Can you expand?

A couple random comments:

Great post Peter2. I agree: investors (or longer term traders) ride the big(ger) waves. So the main point here in my opinion...whatever you do, make sure that your stop policy (including not having one) helps you fulfill your goal.

Sage advice.

It might be blindingly obvious, but an extremely simple example: Joe Blow (not the ASF one, the other one, lol)...has an SMSF, starts doing his own stock picking, wants to tend to his investments perhaps on the weekends, and would like most trades to last a year or more if possible. Let's say he subscribes to a good fundamental based newsletter or something, and decides to use those as his universe to explore further. Reads a book that talks about tight stop losses in some shorter term trading system, or reads about using trailing stops somewhere and decides to run a 5% or 10% trailing stop on his trades.

Hmmm. Joe Blow now has a major problem. No congruency with what he was trying to acheive. His new trading rule has him in and out of the market, looking for replacement stocks and checking the latest prices far more than he intended to. Not a good recipe for sticking to a system (not to say anything about lack of testing).

And this is Robusta's specific issue I believe --- some great conditions in his plan but NO IDEA if when traded together they are long term profitable. He's basically forward testing his ideas. The market is ranging and he continues to find a KEY to profit.
All WILL come in a bull market---I my opinion capital preservation and development and testing of his plan/s should be paramount. This WILL take some years and a great deal of education---but it will be worth it.

Anyway, enough of that.

So_Cynical's post reminded me of Van Tharpe's Safe Strategies book that mentioned taking 2/3rds of a trade off when up 50%, leaving the rest on for a "risk free" trade (similar to setting stop to breakeven really - but your money is out of the market).

I always find this definition of a Risk Free trade amusing.Like playing with YOUR PROFITS on anything.
Its NOT Risk free its YOUR MONEY. You can take it out of the market and buy food --whatever with it.

Also reminds me of Ben Graham (when he had his quant / systematic hat on). I've not really had an interest in profit taking (like many, I prefer to be kicked out of a trade). But you learn something new every day. Saw a Ben Graham system tested that included a time stop (nothing new there) and a profit taking stop. i.e. if a stock gets to your profit level before the time cutoff, you're out (and obviously, if not you're out at the time cut off).
Worked just fine (US stocks).

Evidence then great.If Ben Graham can test for results so to can Robusta and anyone!

I still don't think it makes sense in a real world way - why get out of a stock that's been going so great for you?) - but if it can work, it can work, and if it's a rule that keeps Joe Blow better able to stick to his system, then it may well be worth it.

Again he will know when he has results to prove that he knows.
His trading will reflect his results and he will be far better able to follow his method without addition or subtraction as he will have a blueprint of numbers he can compare with.
He'll know if that string of losses is out of character---if his R/R is within range of his high and low Deviations set by his Montecarlo testing.

If you cant do it Robusta pay someone who can---will be a very sound investment in my opinion---you have some great building blocks---what you need to know is how to put them together.---in the best building design.

As always, code your system into the language of a trading system development platform and test it. Every exit should occur often enough that the tests are meaningful.

And lastly from Howard another advocate of developing a proven method.

This I'm afraid is where the 95% of failed traders/investors normally falter.

 

[Knobby22]

I have a fundamental portfolio and a technical portfolio.
Both have gone up about the same amount. I don't have time to spend charting so I use Nick Radge's site. (thanks Tech).

I find that it is good to look at the charts of the fundamental picks and Nicks graph explanations help.

So you can see that my fundamental investing is influenced by the charting.

My charting on the other hand is slightly influenced by fundamental investing. Sometimes I won't buy a share or set my stops tighter based on the fact that I'm not happy with the fundamentals of the company. Or alternatively, if it is share that I am very interested in for fundamental reasons I may go overweight.

I have to say, I don't set a target price, I just raise the stop. If it hits the stop I sell. Pretty basic really. I like to hold over a reasonable time frame. I am not into daytrades where I suppose the target price is very important.

 

[peter2]

@tech/a: Thank you for your thoughtful post.

ATM robusta has not shown any interest in the charts and all we can do is present our preferences. I believe that a little bit of both is optimal. Personally I'm 70% chart based, 20% market sentiment (market filter), 10% FA. For example I won't buy a break-out in a gold explorer unless the POG is going up.

It seems that we all start with simple, make things more complicated and then return to simple once we understand what's really important.

I prefer to stay on topic, but don't want to appear rude and not reply to your queries. I agree that all of our trading/investing decisions should be validated before implementation. However there are many who cannot do the research that we think is required. I did not start with any backtesting experience but I learned from the work of others and used their work to validate many of my trading rules. I think robusta should record the reasons for his exits so that in a few years time he can review the effectiveness of his decisions. We may not be able to back test a discretionary approach however we can record and review its effectiveness. Another example, I sometimes sell before my exit stops are triggered. Reviewing these decisions over the past five years shows me that these discretionary exits add to my edge. Knowing this I have implemented a tighter trailing stop strategy. This has reduced the number of "gutfeel" exits substantially and made me more consistent.

You will point out that I could have tested this before starting, but without money on the line the difference between 1.5 atr and 3 atr is just a number. When you see the amount of money this number represents in real time it's very different.

I want robusta's thread and others like it to be a positive learning experience. I want to offer advice, suggestions, provoke thought to help him build his investing business. I want threads like his to last years* just like the techtrader thread.

* What do the mods what?

 

[Julia]

I agree with Julia, keep it simple. Your exits should be limited to a change in company fundamentals or unsuitable economic conditions.

I just want to clarify the above from Peter: I did say that I prefer to keep things simple, but I've made no comment about what exits should be limited to. Would really appreciate not being misquoted, though in this instance probably what has happened is that Peter has just run his own comment on after mine.

How do you select your individual share purchases and their exits Julia? I know you're not in the market atm, but if you were to begin reinvesting in shares, what are your criteria - do you use a system, or are your purchases made on a discretionary basis? Likewise with exits, do you have a strict rule that you follow (% price decline/prior support broken etc) or is it more arbitrary?

Discretionary. Some of the basic criteria are:

Low or no debt

Market Cap > $1m

Increasing EPS
Increasing DPS

Good liquidity

Yield > 5% ff

Established company with record of sound management.

Entry - uptrend.

Exit criteria will vary company by company. Stop will be much wider on e.g. one of the big banks than on smaller companies.

Above all, focus on capital preservation because I'm dependent on my capital to generate a living.
Remain aware always of potential disaster.

Never, ever even remotely think about buying the next speccie wonder that can go broke as easily as it can succeed.

 

[Julia]

I really dont know that buying your brains out now is a wise idea. the next dip may not be a dip but a bear trend of catastrophic proportions---if you have a contingency for this then fine. A few of us are sitting on the side lines---portfolio wise.

+1. But people will perhaps see this differently depending on their age and circumstances. Someone aged 25, who is a dedicated 'value investor' will take a different view from someone generating a living from their capital and without all those recovery years ahead.

I'd just like to thank everyone contributing to this thread for the polite and constructive discussion. Just demonstrates that alternate approaches can be tossed about, justified, criticised, all in a civil manner.
It makes a big difference imo. No one storms away in a hissy fit and we all potentially learn something.

 

[tech/a]

I'd just like to thank everyone contributing to this thread for the polite and constructive discussion. Just demonstrates that alternate approaches can be tossed about, justified, criticised, all in a civil manner.
It makes a big difference imo. No one storms away in a hissy fit and we all potentially learn something.

Mutual respect for participants I suspect.
And no personal snipes.

 

[robusta]

Mutual respect for participants I suspect.
And no personal snipes.

+1

 

[DocK]

+1. But people will perhaps see this differently depending on their age and circumstances. Someone aged 25, who is a dedicated 'value investor' will take a different view from someone generating a living from their capital and without all those recovery years ahead.

I wish I was 25 again, but unfortunately I sit somewhere in the middle - not young enough to take (another) big hit, but at least a decade or two off retirement. I'm reasonably heavily invested atm, which does make me a little uneasy given the state of the world, but by being so I've benefitted from the last 6 months of general uptrend. Capital growth is my focus, rather than income, and one of Radge's favourite sayings is pertinent to me - something along the lines of "you have to be in it to win it". Getting in after most of the recovery has been made is useless to me - I need to be there at the start. The charts also show that every protracted down-trend has had shorter periods of up-trends within them - I'm not convinced that this present uptrend will last very long, but I want to extract as much profit from it as I can before getting out and waiting for the next. Having said that I'm hoping if it all goes to hell that it will be a slow general decline that will allow me to get out, rather than an overnight 50% plunge.

I'd just like to thank everyone contributing to this thread for the polite and constructive discussion. Just demonstrates that alternate approaches can be tossed about, justified, criticised, all in a civil manner.
It makes a big difference imo. No one storms away in a hissy fit and we all potentially learn something.

+1
I genuinely love reading of other people's approaches - even those not attractive to my style. I'm firmly of the opinion that there are generally several ways to arrive at the same destination and there is no one-size-fits-all failsafe method. Most of my investments have been made via The Chartist's GP, but like Knobby I do reject a recommended buy here and there due to fundamental reasons. My discretionary purchases have been made on very similar criteria to Julia's actually, although I look for increasing ROE & ROC rather than an increasing DPS, focus on ASX300 rather than market cap > 1M (although most would probably fit that criteria), and only look for FF yield >4-5% for my SMSF purchases, not concerned with yield on my personal portfolio as I'm focussed more on growth. Low debt, good liquidity, increasing profits and sound management/past performance are common to us both, but I like to try to buy on a resumption of uptrend after a dip in my inexact attempt to get a good company at a reasonable price. Sometimes I just let a buy order well below current price sit in the market in case I get filled on daily volatility - have been lucky once or twice. That's as close to Value Investing as I get.

Although I can certainly appreciate why some favour the value investing method, I don't place a lot of faith in the ability to crunch the numbers and arrive at a precise IV, or calculate forward earnings. To my mind most of the available information is not necessarily current, may not represent a totally accurate picture of the company concerned, and it is impossible to predict what factors may affect forward earnings. The smart money in the big funds is going to be already buying or selling based on the same info that they've probably obtained much earlier than it would be available to me - and their prognosis will be evident on the chart. The very fact that so many analysts disagree on IV and price targets indicates to me that it's a discretionary method that requires a fair amount of self-belief on the part of the value investor. I like to see buyers queueing up and then join the party. In a lot of ways I see charting as the lazy way of following what the number-crunchers have put in the hard work to figure out - is a company a good risk or not?

 

[tech/a]

Although I can certainly appreciate why some favour the value investing method, I don't place a lot of faith in the ability to crunch the numbers and arrive at a precise IV, or calculate forward earnings. To my mind most of the available information is not necessarily current, may not represent a totally accurate picture of the company concerned, and it is impossible to predict what factors may affect forward earnings. The smart money in the big funds is going to be already buying or selling based on the same info that they've probably obtained much earlier than it would be available to me - and their prognosis will be evident on the chart. The very fact that so many analysts disagree on IV and price targets indicates to me that it's a discretionary method that requires a fair amount of self-belief on the part of the value investor. I like to see buyers queuing up and then join the party. In a lot of ways I see charting as the lazy way of following what the number-crunchers have put in the hard work to figure out - is a company a good risk or not?

Precisely why I have not followed the Fundamental Trading methodology.
If the pros get it wrong more often than not what hope have I got?

Like your style Doc.