Spec stocks

[luutzu]

Strange names for books those
Did not retire young.
Try not to trip over same rock twice.

hahaha... you either have a good sense of humour or it's way too late to read english

 

[burglar]

Strange names for books those
Did not retire young.
Try not to trip over same rock twice.

Louise Bedford's Candlestick Patterns

Benoit Mandelbrot, "The (Mis)behavior of Markets"

"Taming the Lion" - Richard Farleigh

 

[tom82]

hahaha... you either have a good sense of humour or it's way too late to read english

What those aren't books? Yeah its getting late, or is it early?
Time for a cigar I think...

 

[tom82]

Louise Bedford's Candlestick Patterns

Benoit Mandelbrot, "The (Mis)behavior of Markets"

"Taming the Lion" - Richard Farleigh

Hey thanks for that!

 

[burglar]

Hey thanks for that!

Re Richard Farleigh:

My mentor said, "He lost billions in the Tech-wreck, why I should listen to him?"

Because he had millions left!

 

[luutzu]

Re Richard Farleigh:

My mentor said, "He lost billions in the Tech-wreck, why I should listen to him?"

Because he had millions left!

So if Richy starts out with a million and lost at the same ratio, how much will be have left?

 

[DeepState]

Great thanks for that, how long ago was it written / published?

I am trading forex with price action methods, charts, signals look for are low test / high test candles (also called pin bars, also has other names), inside bars, and the hikake pattern. I mainly got the futures books for information on commodities trading.
I have written a trading plan, that covers what signals I can trade and how to trade them, plan has examples of entries and exits and a money management rules and position sizing section of the trading plan.
ETF's / LIC's / A-REITS I have been contemplating in investing in.
Someone mentioned reading company reports and/or their financial documents, I'm on to that as well.

Porter wrote "Competitive Strategy" in 1980. It's been reprinted about 60 times since. It is a bedrock for strategic analysis and entirely relevant for spec.

Also, Burglr mentioned Benoit Mandelbrot. This is a book on why book learning doesn't work as expected. It will explain why you have to unlearn at least half of what you thought you learned from all the reading you plan on doing. I can recommend it highly once you have the basics nailed.

You seem to be trying to cover a lot of ground. Hopefully you have the bandwidth. Having a plan to work from and adjust from is a great idea. As you update your knowledge with experience and further learning, you'll move to becoming (more of) an expert. After you have nailed the basics and then Mandelbrot (to start with then, maybe, Nicholas Taleb after that) and you want to progress more deeply into the process of expertise development, then I can also suggest getting whatever you can from K Anders Ericsson. If you need a book to be named then try the "Cambridge Handbook for Expertise and Expertise Development (2006)". Ericsson was one of the editors.

 

[DeepState]

Been trying to find an alternative to term deposits as there interest rates aren't the best at the moment.
Thought about Bonds, but that requires another book and/or learning to understand them adequately.

Here's the latest on TDs. With a curve like this, it's very hard to buy bonds instead with a view to holding to maturity. Bottom of investment grade would barely get you the TD rate for equivalent maturity (not even)...and they are not government guaranteed.

 

[burglar]

So if Richy starts out with a million and lost at the same ratio, how much will be have left?

He started out naked and broke ... just like you!

 

[luutzu]

He started out naked and broke ... just like you!

so he's going to be a Zen Master then? Coming into the world with nothing, shall leave it with nothing

 

[DeepState]

The rise of the NASA Monkeys....and you thought I was joking.

From the Economist:

 

[Wysiwyg]

The rise of the NASA Monkeys....and you thought I was joking.

Oh random selection is the easy bit. Position sizing and exit strategy requires cognition.

 

[DeepState]

Oh random selection is the easy bit. Position sizing and exit strategy requires cognition.

This may seem contradictory, but I agree. In the presence of an edge or any kind - which can be greater in some specs than elsewhere, poor risk management - which includes the concept of position sizing amongst other things - can send your edge back towards zero. On exits, the monkeys would not be expected to produce continual outperformance unless they had to exit and renew their positions periodically. The triggers for these 'exit strategies' can be anything, but they need to refresh their positions in particular ways to extract maximum benefit.

None of this requires any knowledge of fundamentals whatsoever and is thus and confirmation of sorts that fundamentals are not be required at all to be profitable.

 

[odds-on]

This may seem contradictory, but I agree. In the presence of an edge or any kind - which can be greater in some specs than elsewhere, poor risk management - which includes the concept of position sizing amongst other things - can send your edge back towards zero. On exits, the monkeys would not be expected to produce continual outperformance unless they had to exit and renew their positions periodically. The triggers for these 'exit strategies' can be anything, but they need to refresh their positions in particular ways to extract maximum benefit.

None of this requires any knowledge of fundamentals whatsoever and is thus and confirmation of sorts that fundamentals are not be required at all to be profitable.

I came to this conclusion some time ago. It requires no knowledge of anything. Just need to be willing to pull the trigger and enter the market. Position sizing and exit strategy are everything.

Some thoughts on position sizing and exit strategy from the experienced would be appreciated.

 

[luutzu]

Serious?

If you don't know why you get into something, what make you think you would know why and when you ought to get out of it?

When you've lost "too much" or when you've gained "enough"?

Probably best to exit the same way you entered: get those monkeys back and tell them that this time, the ones they hit will mean the ones you'll sell... and if they hit those they didn't tell you to buy before... well, probably short those ones or something.

And i thought people had stopped reading tea leaves and goat's intestines a long time ago.

 

[DeepState]

Serious?

And i thought people had stopped reading tea leaves...a long time ago.

Check your assumptions.



She is located in the Sydney area. I'm sure she can take a booking.

However, you raise valid points for some scenarios but not all, as it turns out.

 

[luutzu]

Check your assumptions.

View attachment 58268

She is located in the Sydney area. I'm sure she can take a booking.

However, you raise valid points for some scenarios but not all, as it turns out.

Na i take my readings from this white bearded guy (yes, a White guy with long beard haha) atop the Great Blue Mountains.

 

[tom82]

So I ordered Louise Bedfords books and one of Chris Tates books. I now have, Trading Secrets 3rd edition, Charting Secrets revised edition, The Secret of Candlestick Charting and The Art of Trading.

What technical methods do you use?

 

[tom82]

So you think technical is the way to go instead of fundamentals?

 

[burglar]

So you think technical is the way to go instead of fundamentals?

Fundamentals was once a great way to go!
Not sure anymore!

Too many things have changed ....

Computers
the internet
The dot.com bubble
Global financial crisis


The market is more like a casino than ever it was.

So what is my take on tech vs fundies.

A fundy needs to know that traders exist.
Whenever you ask yourself "What just happened then?",
and you don't get an answer, chances are, traders are at work.

A fundy needs to work hard.
Checking calculations.
Understanding balance sheets.
Have faith in companies ... directors ... accountants et al.