New to the game

[FIGJAM]

Hi All,

Good read. I have been trading off and on for the last 12 months. Its time to get more serious.

I got involved with Nick Halik's Sharelord program which wasn't to bad. But I don't want to discuss that.

I have two questions,

1. I need to learn or at least grasp a better understanding of how to read charts. Can someone point me in the right direction to gain some more knowledge?

2. What is a good, proven strategy for new people entering the market? I thought covered calls would have been decent due to the low risk, however people on this forum seem to think differently.

Short term goals is to make a little extra on the side, nothing major just a bit until my confidence rises.
Medium term goal, hell a holiday every year or two years would be nice
Long term goals, probably the same as everyone.... to become Ironman.......

*Edit Forgot to mention at the moment I am considering to continue my covered call stratergy on a weekly basis as per Sharelords teachings. Before I made a real real bad trade I was making about $50 a week, ended up buying the wrong stock due to lack of knowledge in chart reading.

Also looking at investing into some blue chip shares on a weekly basis for the long term. Thinking banks, either put all into the one bank like the Commonwealth or through a couple, but not sure how that would effect the dividends (again in the long run when I own a fair few)

Cheers,

 

[Trembling Hand]

2. What is a good, proven strategy for new people entering the market? I thought covered calls would have been decent due to the low risk, however people on this forum seem to think differently.

There is no "good, proven strategy for new people".

There is a good start though and thats the 2% rule.

*Edit Forgot to mention at the moment I am considering to continue my covered call stratergy on a weekly basis as per Sharelords teachings. Before I made a real real bad trade I was making about $50 a week, ended up buying the wrong stock due to lack of knowledge in chart reading.

Was not due to " lack of knowledge in chart reading." It was due to poor risk management and probably crappy position sizing.

 

[Gringotts Bank]

Hi All,

Good read. I have been trading off and on for the last 12 months. Its time to get more serious.

I got involved with Nick Halik's Sharelord program which wasn't to bad. But I don't want to discuss that.

I have two questions,

1. I need to learn or at least grasp a better understanding of how to read charts. Can someone point me in the right direction to gain some more knowledge?

2. What is a good, proven strategy for new people entering the market? I thought covered calls would have been decent due to the low risk, however people on this forum seem to think differently.

Short term goals is to make a little extra on the side, nothing major just a bit until my confidence rises.
Medium term goal, hell a holiday every year or two years would be nice
Long term goals, probably the same as everyone.... to become Ironman.......

*Edit Forgot to mention at the moment I am considering to continue my covered call stratergy on a weekly basis as per Sharelords teachings. Before I made a real real bad trade I was making about $50 a week, ended up buying the wrong stock due to lack of knowledge in chart reading.

Also looking at investing into some blue chip shares on a weekly basis for the long term. Thinking banks, either put all into the one bank like the Commonwealth or through a couple, but not sure how that would effect the dividends (again in the long run when I own a fair few)

Cheers,

Patterns are good but most of them are impossible to backtest. [thepatternsite.com] This site also has lots of ideas on strategies you might want to test for yourself if you have the software for it.

If you want a system, keep it simple. Just start with the past few days of OHLCV and see what you can find. Amibroker threads have some very smart coders, such as trash.

 

[FIGJAM]

There is no "good, proven strategy for new people".

There is a good start though and thats the 2% rule.



Was not due to " lack of knowledge in chart reading." It was due to poor risk management and probably crappy position sizing.

thanks for the reply.

I guess the good strategy is a little vague. Maybe for a beginner, how would someone learn different techniques or strategies, ie forex, eminis, covered calls, buying blue chips and holding on, short trading, put options, trading using the leverage of cfds and anything else that I probably missed.

As for the second point, i'll take that on board, risk management with covered calls I believe you're talking about put options which you are correct I didn't purchase any to try and protect myself if things went bad, mind you with how badly it went I don't think they would have helped. With that being said, I was under the impression that the charts and following the stock helps one make a decision as to whether they should go into the market or not? which when I look back at the time I purchased I brought right at the end of a head and shoulders (not sure if this is actual terminology or just something that Nick came up with) and as per most instances following this the stock dropped. The entire market dropped at the sametime, but yeah.

 

[FIGJAM]

thanks Gringotts, I'll have a good look at it when I can.

 

[Julia]

Also looking at investing into some blue chip shares on a weekly basis for the long term. Thinking banks, either put all into the one bank like the Commonwealth or through a couple,

Do you have a particular reason for buying bank shares on a weekly basis, apparently regardless of the price at the time?

 

[Gringotts Bank]

The other thing I found useful is trend lines. If you're a visual sort of person, finding where the lines are best drawn is relatively easy, and can provide a sufficient edge just on its own.

 

[Joules MM1]

Hi All,

Good read. I have been trading off and on for the last 12 months. Its time to get more serious.

the first reply to your post is by far the one you need to concentrate on....prove you fully understand the suggestions made to in that post before you venture into any other suggestion.....if you get that part right, ragardless of what you do afterwards then that initial knowledge is going to prove to over and over the best first to have and practise.....break down exactly what risk is, do not be vague about it, make a workable plan.....after that you can go in any direction...doesnt mean a gurantee of success, at least you'll stay in the game longer to get the experience you need......

btw there's no such thing as more serious

 

[Trembling Hand]

I guess the good strategy is a little vague. Maybe for a beginner, how would someone learn different techniques or strategies, ie forex, eminis, covered calls, buying blue chips and holding on, short trading, put options, trading using the leverage of cfds and anything else that I probably missed.

Forget the options would be a good start.

then unless you have a few 100 mil capital going down the path of all you have listed above is also a waste of time. So I guess forget 90% of that as well. What you need from the gumph you have listed below is a broad knowledge of the market and trading as you seem to have less of an idea than you realise. Do you understand what position sizing is for example?

As for the second point, i'll take that on board, risk management with covered calls I believe you're talking about put options which you are correct I didn't purchase any to try and protect myself if things went bad, mind you with how badly it went I don't think they would have helped. With that being said, I was under the impression that the charts and following the stock helps one make a decision as to whether they should go into the market or not? which when I look back at the time I purchased I brought right at the end of a head and shoulders (not sure if this is actual terminology or just something that Nick came up with) and as per most instances following this the stock dropped. The entire market dropped at the sametime, but yeah.

No dude I'm not talking about put options! See above comments.

 

[Gringotts Bank]

TH, I was just trying to remember your position sizing method. Is this right? You start very small and increase bet size exponentially with each winning trade, and vice versa if you're losing. And you stop if your daily limit is reached. Correct?

 

[Trembling Hand]

TH, I was just trying to remember your position sizing method. Is this right? You start very small and increase bet size exponentially with each winning trade, and vice versa if you're losing. And you stop if your daily limit is reached. Correct?

no.

 

[Gringotts Bank]

no.

Well anyway, that method is a good one, IMO. Inverse Martingale style.

 

[Trembling Hand]

Well anyway, that method is a good one, IMO. Inverse Martingale style.

But there is no way a stock trader can use that method without exposing themselves to huge portfolio heat and/or blowing position sizing. Its only a intraday strategy on a very liquid and hedge-ble market.

 

[Gringotts Bank]

But there is no way a stock trader can use that method without exposing themselves to huge portfolio heat and/or blowing position sizing. Its only a intraday strategy on a very liquid and hedge-ble market.

Yep, so to adapt that to stock trading, one might do something like this?

-- weak market, run of losers lately, position size = $5000
-- bouyant market, run of winners lately, position size = $20000
-- bouyant market, run of losers lately, position size = $7000

or something along those lines. Like playing cards. When the deck is stacked, you bet more ferociously. That's all my position sizing has ever amounted to. I once tried reading Van Tharp and thought "this guy is over complicating things".

 

[FIGJAM]

Do you have a particular reason for buying bank shares on a weekly basis, apparently regardless of the price at the time?

this is something that was recommend to me as a safe long term investment. I guess it may be a little silly to go in just thinking about the bank and should broaden my horizons so to speak.

The other thing I found useful is trend lines. If you're a visual sort of person, finding where the lines are best drawn is relatively easy, and can provide a sufficient edge just on its own.

I have looked at trend lines in the past with Sharelord but only at a very basic level and always on past trends, no real current positions.

the first reply to your post is by far the one you need to concentrate on....prove you fully understand the suggestions made to in that post before you venture into any other suggestion.....if you get that part right, ragardless of what you do afterwards then that initial knowledge is going to prove to over and over the best first to have and practise.....break down exactly what risk is, do not be vague about it, make a workable plan.....after that you can go in any direction...doesnt mean a gurantee of success, at least you'll stay in the game longer to get the experience you need......

btw there's no such thing as more serious

Thanks mate, agree about the more serious. What i really meant was its time to get serious and take control. Risk management is something that I need to look into and start to be more aware of when it comes time to trade. Long road ahead of me, thankfully I am relatively young

Forget the options would be a good start.

then unless you have a few 100 mil capital going down the path of all you have listed above is also a waste of time. So I guess forget 90% of that as well. What you need from the gumph you have listed below is a broad knowledge of the market and trading as you seem to have less of an idea than you realise. Do you understand what position sizing is for example?

I would say that i have very little of an idea when it comes to trading. I have only ever done covered calls in the past. That is what I have some (no matter how little) experience in.

Position sizing is something that (until you mentioned and i Googled.....) that I had no idea about however the first thing i read on it, I can see its importance and will need to get on top of it sooner rather then later.

TH, I was just trying to remember your position sizing method. Is this right? You start very small and increase bet size exponentially with each winning trade, and vice versa if you're losing. And you stop if your daily limit is reached. Correct?

That was something that Nick Halik recommends. So you dont over expose yourself and loose too much whilst still learning and getting used to making trades.

Thanks,

 

[Julia]

this is something that was recommend to me as a safe long term investment. I guess it may be a little silly to go in just thinking about the bank and should broaden my horizons so to speak.

I wasn't so much questioning the choice of the bank or banks in general, as I was the strategy, usually known as 'dollar cost averaging' where you buy a few shares regularly, irrespective of the price at which they're trading at the time.

The idea is apparently that your average buy price is going to be OK. It doesn't make much sense to me.
If you're buying many small lots your brokerage will eat into it every time, and - without a more structured entry - you could be buying in when prices are higher rather than lower.

Might be more useful to observe a chart showing you how the price has varied, learn a little about support and resistance, and then determine your buy in price, placing an order accordingly.

Btw, figjam, your polite responses to suggestions are appreciated. Often people ask questions, other members offer thoughtful responses, and there's no acknowledgement.

 

[FIGJAM]

I wasn't so much questioning the choice of the bank or banks in general, as I was the strategy, usually known as 'dollar cost averaging' where you buy a few shares regularly, irrespective of the price at which they're trading at the time.

The idea is apparently that your average buy price is going to be OK. It doesn't make much sense to me.
If you're buying many small lots your brokerage will eat into it every time, and - without a more structured entry - you could be buying in when prices are higher rather than lower.

Might be more useful to observe a chart showing you how the price has varied, learn a little about support and resistance, and then determine your buy in price, placing an order accordingly.

Btw, figjam, your polite responses to suggestions are appreciated. Often people ask questions, other members offer thoughtful responses, and there's no acknowledgement.

Thanks Julia, the idea was put to me as advice for a parent to do for their child. If they buy 1 blue chip share a week until the child is 21 then they will have put them in a pretty good position. Obviously hoping that as you have mentioned the cost is averaged over the period of time and the growth over 21 years has made it worth while.

I haven't quit figured out how I'll approach the purchase yet, but I would say i'll purchase in bulk to save in the brokerage fees as you have pointed out.

Also, I am a firm believer that it isnt hard to have some manners and common courtesy.

Thanks again,

 

[FIGJAM]

Also, whilst I am here, has anyone read the blog Stock Trading To Go? After reading a few of the articles I really like it and hope that the information is decent. Wondering if anyone else has come across it?

website is http://www.stocktradingtogo.com/

Cheers,
Mitch

 

[Gringotts Bank]

Thanks Julia, the idea was put to me as advice for a parent to do for their child. If they buy 1 blue chip share a week until the child is 21 then they will have put them in a pretty good position. Obviously hoping that as you have mentioned the cost is averaged over the period of time and the growth over 21 years has made it worth while.

I haven't quit figured out how I'll approach the purchase yet, but I would say i'll purchase in bulk to save in the brokerage fees as you have pointed out.

Also, I am a firm believer that it isnt hard to have some manners and common courtesy.

Thanks again,

As a dollar cost averaging method, you could just buy every time the standard stochastics cross up from below 50. That would ensure you catch most of the decent dips with hardly any work at all, and should achieve a much better ave price than buying once a week/month. Do this as long as the SP is above the 200EMA, and pause whenever the SP drops below.

Green arrows indicate where you'd be buying.

 

[Trembling Hand]

Yep, so to adapt that to stock trading, one might do something like this?

-- weak market, run of losers lately, position size = $5000
-- bouyant market, run of winners lately, position size = $20000
-- bouyant market, run of losers lately, position size = $7000

or something along those lines. Like playing cards. When the deck is stacked, you bet more ferociously. That's all my position sizing has ever amounted to. I once tried reading Van Tharp and thought "this guy is over complicating things".

No you don't seem to get the difference between intraday trading a 10-50 mil per day futs and EOD. Surprisely