Newbie Lessons - All your questions answered

[Trembling Hand]

joining one of the mentioned associations would certainly fast track me in that regard.

I will be able to meet professionals, more experienced traders, attend their networking or information events, and utilise their resources. However, I'm not sure which one is better or more suitable to me which is why I asked the question

Not so sure about that. You are more likely to find a plate of cookies and a collection of lost punters.

 

[GKLC]

What are you looking for that is prompting you to consider either?

Hi Julia,

Thanks for the question. I think I pretty much answered it in my other reply, so here it is:

"There's absolutely nothing wrong with right here, but like I said, I'm looking to broaden my exposure to the financial markets and joining one of the mentioned associations would certainly fast track me in that regard. It is simply another avenue which I could use to further my knowledge. I will be able to meet professionals, more experienced traders, attend their networking or information events, and utilise their resources. However, I'm not sure which one is better or more suitable to me which is why I asked the question"

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Not so sure about that. You are more likely to find a plate of cookies and a collection of lost punters.

Hmm. You could be right but it doesn't seem like you've had a first hand experience of cookies and lost punters, so you could be wrong too. Thanks for your opinion though!

 

[Julia]

"There's absolutely nothing wrong with right here, but like I said, I'm looking to broaden my exposure to the financial markets and joining one of the mentioned associations would certainly fast track me in that regard.

Maybe don't be so dismissive of Trembling Hand's comment.
I'm not sure why you believe joining either of the above mentioned associations would 'fast track' you.

eg The Australian Shareholders Assn. afaik, concerns itself with company failures, matters of governance etc which I doubt is especially relevant to someone with no capacity to actually buy anything yet.

You've just graduated and don't have the capital to invest, so perhaps investigate the many free alternatives like forums before you go paying $100 p.a. to any organisation which promises you untold expertise.

I note the AIA website says:

Join the Australian Investors Association and you will receive a one month free trial to the Marcus Today Stockmarket Newsletter valued at $75 and a 15 day free trial to Intelligent Investor and 3 special email reports valued at $267. Member benefits include a range of publications; access to the members online forum; access to AIA meetings and more. One year AIA membership is $110 or two year membership is $190 plus a $20 joining fee.

I might be cynical but why would anyone offer you - for $110 - a newsletter 'valued at $75,' plus a package 'valued at $267'? Most of these tip sheets will offer a free trial anyway, so you could approach them directly if you believe they contain the secret to success.

Perhaps contact the AIA and ask if you could attend one of their meetings.

It is simply another avenue which I could use to further my knowledge. I will be able to meet professionals, more experienced traders, attend their networking or information events, and utilise their resources.

Sounds terrific, doesn't it. I'm more inclined to agree with Trembling Hand's expectation of what you'd actually find.
Good luck and let us know how you get on.

 

[tech/a]

Hmm. You could be right but it doesn't seem like you've had a first hand experience of cookies and lost punters, so you could be wrong too. Thanks for your opinion though!

Nah
He's spot on.
Experienced traders and professionals don't hang out in and around Associations---they don't have/want to.
Wanna'bes on the other hand---sadly chances are you wont pick it!

Enjoy your cookies.

 

[GKLC]

Maybe don't be so dismissive of Trembling Hand's comment.
I'm not sure why you believe joining either of the above mentioned associations would 'fast track' you.

eg The Australian Shareholders Assn. afaik, concerns itself with company failures, matters of governance etc which I doubt is especially relevant to someone with no capacity to actually buy anything yet.

You've just graduated and don't have the capital to invest, so perhaps investigate the many free alternatives like forums before you go paying $100 p.a. to any organisation which promises you untold expertise.

I note the AIA website says:

I might be cynical but why would anyone offer you - for $110 - a newsletter 'valued at $75,' plus a package 'valued at $267'? Most of these tip sheets will offer a free trial anyway, so you could approach them directly if you believe they contain the secret to success.

Perhaps contact the AIA and ask if you could attend one of their meetings.

Sounds terrific, doesn't it. I'm more inclined to agree with Trembling Hand's expectation of what you'd actually find.
Good luck and let us know how you get on.

Hi Julia,

Thank you for your input. I will certainly take what you said under consideration. As you mentioned, I don't really have that much money to spend at the moment, so I'm just investigating pathways right now and have no intention on signing up any time soon. I put the question forward in this forum because if people are saying they're good than I'll sign up for one sooner than later, but I guess that's not the case!

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Nah
He's spot on.
Experienced traders and professionals don't hang out in and around Associations---they don't have/want to.
Wanna'bes on the other hand---sadly chances are you wont pick it!

Enjoy your cookies.

Oh okay, that's probably true, thanks for advice!

 

[havaiana]

Anyone have any free resources for asx equity news/calendar?

Basically looking for any good resources assuming someone wanted to practice avoidance of news movements

When does earnings reporting start/end?

 

[rrayne20009]

pls.suggest a good forex broker to start with.sorry but im a newbie

 

[burglar]

pls.suggest a good forex broker to start with.sorry but im a newbie

Suggest use search facility with keyword "broker". Much info already there!

 

[tom82]

Yep, just the 04xxxxxxxx mobile number. No area code.

04 is the area code for mobiles.

 

[Jamesantenna]

Hi everyone,

Newbie here, as this is my first post, please be gentle. I am really interested in share trading but just don't know where to start. I understand charts to a degree. But other than trends etc how does one find a stock to buy? What makes a stock stand out amongst the rest? There is so many out there what makes for a good 20 for my watch list? I understand that good and bad stocks change all the time but what makes one better than the other. Thanks in advance.

James

 

[merlinnn]

Hi everyone,

Newbie here, as this is my first post, please be gentle. I am really interested in share trading but just don't know where to start. I understand charts to a degree. But other than trends etc how does one find a stock to buy? What makes a stock stand out amongst the rest? There is so many out there what makes for a good 20 for my watch list? I understand that good and bad stocks change all the time but what makes one better than the other. Thanks in advance.

James

I would read the 39 pages on this thread, some great info for everyone to digest.

 

[burglar]

... What makes a stock stand out amongst the rest?

There are two camps, Herbivores and Predators!

You get to choose.

 

[Trading Tools]

Hi Sir,
well written and explain your thoughts.

I am wondering, I am newbie, I did couple of books, and doing the stock game ASX200.
what do u think about paper trading vs playing with 2000-4000 that i m not worried to lose

thank you all for replying and joining this lovely forums.

Guru - I find it depends on the person. For me, I do learn by paper trading, but you may or may not and I can't answer this because I don't know your brain. When I'm testing a new system, it's an exhaustive process (because I'm the sort of fellow who doesn't gamble - I take calculated risks). I generally data test first (use past market data to evaluate the system). This allows me to do a large number of simulated trades across different market types and confirm positive expectancy of the system.

I'll then paper trade using the current market. I usually want around 50 paper trades, trying to see if the live numbers match the previously created equity curve. Next step is to use a small amount of funds (normally about 20-25k) and run the system for a few months. I usually get a slight degree of slippage at this point, but once again I'm testing for any major differences in expectancy from the previous data sets.

Finally I'll move an appropriate level of funds into the system, depending upon which instrument I'm trading and the level of liquidity. (IE equity trading doesn't have the same level of liquidity and significantly higher risks associated with slippage than say FX).
...

Just wanted to +1 the response given by Sir O and throw in my two cents worth with regard to the importance of truly having a system which shows positive expectancy (a positive edge).

I believe many new traders can easily get caught in the trap of focusing more on their winning percentage (accuracy) or entry setups, rather than having a balanced approach to their overall trading system, thereby limiting their trading success. There are many aspects to successful trading which are equally important and must not be neglected, including risk/reward ratio, trade management, money management, etc.
Another critical, yet often overlooked aspect is, knowing the system you’re trading actually has a positive edge/positive expectancy over a large number of trades. Expectancy ($ per trade) = (Win% x Ave Win) – (Loss% x Ave Loss)

Remember trading is an odds-based endeavour and traders are continually challenged by the prospect of making decisions in the face of uncertainty. As a trader, we must therefore place our trades based on a trading plan/system which has a proven edge (positive expectancy) over a large number of trades and we must learn to think in terms of probabilities.

If your trading plan does not show clear positive expectancy then no amount of trading psychology, or anything else for that matter, will help in the long run.

Trade ONLY when you have an identifiable, proven positive edge!

Cheers

 

[Sir Osisofliver]

Hi All,

Been lurking for a while, so I thought I would drop in and have a chat.... so it's time for a lesson.

When to get out??

Disclaimer: This is NOT ADVICE. DYOR stands for DO YOUR OWN RESEARCH. You heard me. Don't make me break out the legalese. I want this to be clean and I DON'T want to get Joe in trouble. This is a discussion about characteristics and signals.

OK so waaaayy back on page 31 I starting talking about how we go about designing a system or turning an idea into a profit. This was designed to show an idea (identifying a short squeeze), and showing the process of what variables we needed to think about to turn an idea into a profit. We got to the point of talking about entry signals and things like that....very important stuff...but until we sell something we don't have a profit or a loss. It's just a paper win or loss. Yet our exit can be be perhaps our most challenging decision sometimes...because our emotions tend to get involved. I don't want to sell because....

The trade

On page 32 (8th of June 2012), I identified JBH as a potential target for the system we were discussing demonstrating and invited commentary. Post #628 I threw a chart up and asked people's views...

The next few pages was a spirited discussion about the best kind of measurements and triggers for which to use. I did not tell people when I entered the position. Or what my triggers were. DYOR at it's best.

On the 12th of February 2013 post #725 pointed out that JBH rose 17% the previous day. At that point in time my profit was about 46% ($8.96 entry).



I'm no longer in the stock

Question: WHY AM I OUT?

Last close is $19.63. @ $19.63 I have a 119% profit in the stock. At the share price peak ($23.13) I had 158% profit. (Assume my profit is somewhere between these two numbers..$19.63 and $23.13 having held the stock for roughly 14 months....) (I'll tell you exactly where and why I got out later).

- What am I hoping to do here....

a) Generate some discussion about the transaction.
b) Demonstrate why exits are frequently misunderstood.

*Grabs a scotch and heads over to the side*

Will check back in later.

Cheers

Sir O

 

[tech/a]

Held for over 12 mths
Lower high
AUD coming off.

You have to replenish your scotch stocks.

 

[Valued]

I wouldn't hold for 14 months but if I did I would have exited at 20.50. At that point we are under the prior swing low and have stopped making higher lows which signals the end of the uptrend. It's just a general rule I go by. If for some reason I held I would be out right now due to the extremely high volume down bars and the fact we haven't made a higher high... meaning the end of the uptrend.

I would look at shorting this except there is something a little funny going on with the professional money on this one. One substantial holder dumped 200k shares then acquired 1 million more, indicating they might have been trying to drive the price down to buy more. Other professional groups became professional holders in late December, indicating there might be a level of support where they bought, if they are willing to buy more... if this drops under the 200 SMA the shorting opportunity will be golden in my very non-professional opinion (There is nothing special about the 200 SMA, but it just happens to be a bit below the price these professional groups bought in, so if they arn't going to stop the price falling no one will. It was just a useful marker that anyone can go look at).

 

[burglar]

... a) Generate some discussion about the transaction. ...

My guess:
Entry: Mid September 2012.
Exit: Mid November 2013 around $21.50.

Reason for exit ... falling below an arbitrary Maroon line on a chart. :

 

[Sir Osisofliver]

Held for over 12 mths
Lower high
AUD coming off.

You have to replenish your scotch stocks.

Tech you are the very definition of succinct

Yes I held more than 12 months....this is relevant from a taxation perspective. As an active asset holding that asset more than 12 months means that I am entitled to a discount on the tax payable.

How relevant was this to my investment decision? EG if I had received an exit signal at 11 months and 20 days would I have immediately exited or hung around for ten days to get the discount?

Indeed there is a lower high in my chart...in fact on a daily time scale there are several that occur as the price moves up from my initial purchase...which one is relevant and more importantly why?

AUD is indeed falling...which will impact things both positively and negatively to the company, with negatively a higher probability.

As for the scotch supply...no, there was no opportunity cost issues or other investments or expenditure to make. I could have continued to hold had I wished.

Yet I chose not to.... Any other theories?

Cheers

Sir O

 

[Sir Osisofliver]

I wouldn't hold for 14 months

May I ask why?

but if I did I would have exited at 20.50. At that point we are under the prior swing low and have stopped making higher lows which signals the end of the uptrend. It's just a general rule I go by. If for some reason I held I would be out right now due to the extremely high volume down bars and the fact we haven't made a higher high... meaning the end of the uptrend.

So in terms of the exit signals you would have used are based on price action and the formation of a lower high, lower low formation. As a secondary confirmation you'd use a low term moving average and some of the current volumetrics.

Sounds good....is it always that easy?

Cheers
Sir O

 

[Sir Osisofliver]

My guess:
Entry: Mid September 2012.
Exit: Mid November 2013 around $21.50.

Reason for exit ... falling below an arbitrary Maroon line on a chart. :

Care to put that on a chart Burglar?

Cheers Sir O