Outliers---where true profit lies

[tech/a]

Thanks T/H and M/S I will ask some pertinent questions to both and grab one.

$200/mth is pretty good.

 

[MRC & Co]

I used to trade live news which reeled in some good winners.Of course the best positions were taken leading up to the news and were promtly exited when fever set in.

Without inside information, isn't that just pure gambling Wysiwyg?

Agree with Tech though, in that big volume usually accompanies big outlier moves, it also generally provides the liquidity to get out QUICK (if the volume isn't simply crossing a large spread), which is needed, along with the moves being more likely if all major markets in the region are moving together. When Nikkei, Hang Seng, S&P night session and SPI all start moving fast and furious in one direction with large volume it usually continues for a while and is perhaps the only time you should chase a trend and perhaps widen stops.

 

[Wysiwyg]

Without inside information, isn't that just pure gambling Wysiwyg?

Me ... gambling ... not on your life fella.

I`m an astute investor with impeccable judgement and morals of the highest standard.

 

[lindsayf]

one way of identifying possible big breakouts is to look for shares trading in a horizontal channel for a significant length of time that show the following characteristics:

volume spikes--showing interest by those in the know?
rising volume nearing breakout time
rising on balance volume over a longer period, showing gradual accumulation

you then capture the break with a previously placed conditional buy and then manage it as you will...

Not many fitting this bill lately

 

[Cartman]

I dunno I reckon picking up a hundred points on the SPI 4 times in a row with a modest stop loss is a hell of a lot easier than picking XYZ at 20 cents and hoping it runs to 40 cents with only a 2 cents stop in place Same profit target with less risk!

 

[Wysiwyg]

So if all 2 baggers (or higher) from Jan. 2003 to Jan. 2008 were analysed, then certain characteristics would be particular to all the 2 baggers.

Upon identifying the 2 baggers (or higher) the lead up to breaking up would have the characteristics lindsay identified plus others and what I think that is most significant in recognising them, the sector.That being for example ...

if the demand for uranium was going to be insatiable then all stock in this sector would have to placed under strict observation for news on grades, tonnage, location etc.

note ; 2 baggers from low

 

[It's Snake Pliskin]

So if all 2 baggers (or higher) from Jan. 2003 to Jan. 2008 were analysed, then certain characteristics would be particular to all the 2 baggers.

Upon identifying the 2 baggers (or higher) the lead up to breaking up would have the characteristics lindsay identified plus others and what I think that is most significant in recognising them, the sector.That being for example ...

if the demand for uranium was going to be insatiable then all stock in this sector would have to placed under strict observation for news on grades, tonnage, location etc.

note ; 2 baggers from low

But each stock and market condition are different and the particular market character would have to be taken into account. A lot like comparing apples and bananas for not so precise, nor clear statistical, usable information.

Better off to learn it then look for it as it plays out in the current market taking into account what the current market and stock is doing. If a stock is rising into a falling market and there is an inkling of investors wanting to sell after some rises then how hard is it for that potential outlier to keep going when the overall market mood is against it? But if it has a unique position within the market then perhaps it hasn't suffered the heavy investing and will not be hit hard by sellers because the real money is behind it.

So once again oranges and lemons.

 

[Wysiwyg]

If a stock is rising into a falling market and there is an inkling of investors wanting to sell after some rises then how hard is it for that potential outlier to keep going when the overall market mood is against it? But if it has a unique position within the market then perhaps it hasn't suffered the heavy investing and will not be hit hard by sellers because the real money is behind it.

So once again oranges and lemons.

Valid point snake.Yes within the bull market there will be a sector that out-performs the rest.Within that sector would be the most likely place to find an outlier, or multi-bagger for us amateurs.

Though when the rocks were hot the odd AIDS miracle cure did well.Citrofresh I think from memory.

 

[nomore4s]

one way of identifying possible big breakouts is to look for shares trading in a horizontal channel for a significant length of time that show the following characteristics:

volume spikes--showing interest by those in the know?
rising volume nearing breakout time
rising on balance volume over a longer period, showing gradual accumulation

you then capture the break with a previously placed conditional buy and then manage it as you will...

Not many fitting this bill lately

Typical Wyckoff set up (as well as other names), really just building a base, need to have the balls to hang on through the reactions after you enter, this is the bit I find the hardest.

Will be plenty of stocks fitting this bill in the next couple of years or however long it takes to recover from this current mess.

 

[motorway]

Surprising Trend Changes

The case has been built that trend changes are usually the result of an
unexpected change in the workings of the market or the economy. Experience shows
that in a very high proportion of cases these trend changes in security prices can be
judged to have occurred in advance of the shock or surprise that supposedly produced
the trend change.

Why/ how can this be so? The trend change in advance of the
surprise did not fool everyone – it just fooled the majority – it fooled the believers in
the consensus. Did a group start to act contrary to the consensus before the trend
reversal?


Classical Contrary Opinion
Yes. It appears that there is a significant minority of market participants that, out
of habit and conviction, doubt rather than believe the prevailing consensus opinion
regarding the market or individual stocks.

Conventional wisdom points to corporate
insiders as trendsetters but I believe there are others as well. Knowledgeable long-term
investors and, importantly, long-term trend followers seem to recognize these changes
in market trends for what they really are. Short-term trend followers do not seem to
make that much difference to the long-term trend although they can and do exaggerate
the short-term movement and volatility, especially to the downside.


Long-term Trend Reversals
Without being able to prove it, it seems reasonable to believe that the consensus
followers will not believe the trend reversal when it occurs. Maybe they are blind to it
rather than unwilling to believe that it is real. The first step in successful portfolio
management is to develop an “open mind” to the possibility that a trend reversal might
be real, in direct contradiction to the prevailing consensus opinion..

The consensus opinion must, by definition, be a simple phrase or slogan that is
capable of being repeated over and over until almost no one doubts its validity. The
consensus opinion leaves no room for consideration of an Unknown-Unknown

---But the consensus is always vulnerable to the minority of doubters who are always open to the unknown unknown... Turning Points

volume spikes--showing interest by those in the know?
rising volume nearing breakout time
rising on balance volume over a longer period, showing gradual accumulation

So a chart of MQC

from the peak of 05 to the peak 07
accumulation or distribution ?

motorway

 

[BBand]

Given the option - I'd put my money on Cartman (#45)

 

[Cartman]

Given the option - I'd put my money on Cartman (#45)

Ah!! You are obviously a clever man BB not trying to hijack the thread cause Outliers are great if you manage to get em but why back the long shot in a two horse race !!

 

[It's Snake Pliskin]

Ah!! You are obviously a clever man BB not trying to hijack the thread cause Outliers are great if you manage to get em but why back the long shot in a two horse race !!

I addressed this in my first post:

Outliers.
Events which are outside the norm of a data set (Which can be any chart of any commodity).
These are the true profit churners.

By Tech/A.
And then me:

We need a better definition of the word. If outliers are relied on for regular income and profit, then should they be called outliers? If they are common then they may not be outliers. And only the mother of all moves may be considered outliers because they happen rather rarely.

So is there a better and more concise interpretation of what an outlier is?

Why not just call them percentage moves and grade them with broader grades as they get bigger?

So what about the profit from non-outliers which is very nice to get indeed?
Why not just look for percentage moves that are more common than outliers in frequency?

 

[tech/a]

Ah!! You are obviously a clever man BB not trying to hijack the thread cause Outliers are great if you manage to get em but why back the long shot in a two horse race !!

Because as the race is running you can place your bet even though its obvious the long shot is 10x faster than the other horse and has bolted 5 length clear out of the gate.

You don't back it as its being led to the gate!

Snake
Nothing wrong with that and preferable to most.
However if you can clearly see the above (Horse analogy) then why wouldn't to take a low risk trade with possible excellent R/R?

 

[It's Snake Pliskin]

Because as the race is running you can place your bet even though its obvious the longshot is 10x faster than the other horse and has bolted 5 length clear out of the gate.

You dont back it as its being led to the gate!

Why not look for percentage moves that are more common than outliers? There is a chance one may be the big one.

Outliers happen very rarely.

 

[It's Snake Pliskin]

Snake
Nothing wrong with that and preferable to most.
However if you can clearly see the above (Horse analogy) then why wouldn't to take a low risk trade with possible excellent R/R?

Exactly my point below.
But when you read this it will be above

 

[Cartman]

Because as the race is running you can place your bet even though its obvious the long shot is 10x faster than the other horse and has bolted 5 length clear out of the gate.

You don't back it as its being led to the gate!

Snake
Nothing wrong with that and preferable to most.
However if you can clearly see the above (Horse analogy) then why wouldn't to take a low risk trade with possible excellent R/R?

Hey Tech I know where youre coming from but my horse analogy is meant to be a bit cryptic

Whatever stock/index/whatever you pick is irrespective the TWO horses in my race are PRICE It will only go up or down My point was ----- why try to pick a penny dreadful looking for a riskier return when u can back a highly liquid futs/index/fx with a stack of historical data to study from

ps I knowyou are good at these plays and have minimum risk with your setups but new players might be better off concentrating on my kind of horse race definitely not the 5th at Flemington !! (No 3 if anyones interested)

 

[tech/a]

Well look at that.
IB's workstation and E'signal seem to have what I want.

 

[Cartman]

Well look at that.
IB's workstation and E'signal seem to have what I want.

Links dont seem to load Tech -------- please enlighten us as to your point --

 

[tech/a]

Links dont seem to load Tech -------- please enlighten us as to your point --

No its a screen shot of IB (Interactive Brokers) which is my trading platform.
Just mentioning that it seems I can get what I want from a source I already have.
I dont subscribe to their data as I have a live feed already so will see if I cant run both (As the other live data is also e'signal which is also IB's source I think.

Sorry to confuse Posted it incase others are using IB.