Stan Weinstein's system - Is it applicable today?

[rosinger]

Hi,

I am currently reading Stan Weinstein's "Secrets For Profiting in Bull and Bear Markets", which I liking to read. Many recommend this book and I have seen good reviews about it.

I am intersted to know other people's opinion about the applicability of this read in today's ASX market. As the book has been written quite a while ago, quite a few things changed, e.g. computers, online brockering - SPs change very fast.

I do undesrstand the various stages of a stock / index, but is the 30 week MA, heavily referred to in the book, applicable today, or are other indicators better?

Any commenst would be highly appreciated.

Cheers,

David

 

[WRONG'UN]

Hi David
Weinstein has been discussed on ASF before, and some say his methods are old fashioned, and can be improved upon nowadays, because of all the fancy computer stuff that we have available.
The attached chart for the XAO plots the 100 day simple moving average - this is very close to Weinstein's 30 week weighted moving average, which can't be plotted on "Big Charts". Is Weinstein still applicable? I think the chart speaks for itself. There are hundreds of charts for individual stocks that show a similar pattern - I wish I'd taken more notice earlier in 2009!
All we are trying to do is make money - any method that works is worthy of attention.
Cheers, Wrong'un

 

[rbbrain]

Hi,

When I first joined the ATAA a few years ago, some of the old hands there suggested that I rad this book - that it is the Must Read book. So I bought it, and read it.

I recently re-read it in some research for a presentation I was preparing, and I rediscovered some great things in the book. In Chapter 8, "Using the best long term indicators to Spot Bull and Bear Markets", Stan includes some weekly charts of the DJIA going back decades, and suggests that in the past we could have avoided the losses of US bear markets by following his simple strategy. My recent research of the Aussie market over 2 decades easily confirms this, like WRONG'UN's chart above of the XAO.

But we should note that Stan used the Simple Moving Average. His simple calculation method is explained on page 313 of his book.

His concept of Stage Analysis is also a great idea to understand. It is not exactly prescriptive; but the concept is fantastic. If you have charting software that include the Stage Analysis, it is a great tool.

Cheers

 

[WRONG'UN]

Thanks Robert - you are right, Weinstein uses the simple moving average - I got my wires crossed somewhere!

 

[DaveMac]

Hey guys,

Love your work - a simple method that works. Isn't it always the simple things?

I read Stan's interview in "The Heretics of Finance", and he also uses the 50 day and 200 day simple moving average, buying in stages and selling out in stages (with a crossing of the 200 day being the signal for selling the last portion of his stock).

Love it!

 

[bunyip]

Hi,

I am currently reading Stan Weinstein's "Secrets For Profiting in Bull and Bear Markets", which I liking to read. Many recommend this book and I have seen good reviews about it.

I am intersted to know other people's opinion about the applicability of this read in today's ASX market. As the book has been written quite a while ago, quite a few things changed, e.g. computers, online brockering - SPs change very fast.

I do undesrstand the various stages of a stock / index, but is the 30 week MA, heavily referred to in the book, applicable today, or are other indicators better?

Any commenst would be highly appreciated.

Cheers,

David

Rosinger

The one thing that hasn't changed in the markets over the years is price action. And technical analysis, including Stan's method, is based first and foremost on price action.
You can look at thousands of charts of different markets from stocks to currencies, futures, indexes, in any year you want, going from today right back to fifty or seventy years ago, and in all of those charts you'll see the same trends, consolidations, support and resistance, chart patterns etc.
Since Weinstein's method is based primarily on price action, as are all good methods, you can be assured that his system is just as valid today as it ever was.
Study his method then run it over a few hundred weekly stock charts of the bull market prior to the crash that began in late 2007....you'll see Stan's setups over and over again in more stocks that you could have possibly traded.
Run his method over a few hundred weekly charts during the 2008 crash....you'll see a huge number of his setups signalling entries on the short side.
Run Weinstein's system over the current bull market that began in March 2009.....again, there are hundreds of his setups.

Mate, a word of advice.....when you want to know if some method is applicable, better by far than asking people is to do your own research and make up your own mind.
Asking questions sounds good in theory, but the problem is that it can lead to you getting so many different opinions that in the end you don't know who to believe and who not to.
Nothing beats your own research when it comes to finding out what works and what doesn't. Chart time is the key. Look at thousands of charts going back dozens of years. Become so familiar with a setup that it almost jumps off the chart and bites you, so that you recognise it instantly when you see it.
Find yourself a pattern or a setup you like, one that's simple and suits your personality. Become an expert in trading that pattern. Practice and practice and practice until you feel you 'own' that pattern and you can just about trade it in your sleep.
You'd be surprised at just how simple are the methods used by some of the top traders. And just how few setups they have. Many of them specialise in just one or two setups.
You may have heard of Linda Raschke, a well known US trader, trading educator, fund manager and author. She said something that's stuck in my mind for 15 years.....
'You only need one setup to be a profitable trader - most of all, you need to apply your method consistently'.

 

[bunyip]

Hi,

When I first joined the ATAA a few years ago, some of the old hands there suggested that I rad this book - that it is the Must Read book. So I bought it, and read it.

I recently re-read it in some research for a presentation I was preparing, and I rediscovered some great things in the book. In Chapter 8, "Using the best long term indicators to Spot Bull and Bear Markets", Stan includes some weekly charts of the DJIA going back decades, and suggests that in the past we could have avoided the losses of US bear markets by following his simple strategy. My recent research of the Aussie market over 2 decades easily confirms this, like WRONG'UN's chart above of the XAO.

But we should note that Stan used the Simple Moving Average. His simple calculation method is explained on page 313 of his book.

His concept of Stage Analysis is also a great idea to understand. It is not exactly prescriptive; but the concept is fantastic. If you have charting software that include the Stage Analysis, it is a great tool.

Cheers

You're right....on page 313 he describes the 30 week simple MA.
Yet I'm certain he talks of the 30 week Weighted MA in other parts of the book. And I'm sure I recall seeing the 30 WMA on the Mansfield charts he originally used.

Not that it really matters whether you use 30 week Weighted, Simple or Exponential MA....all will adequately show you the general direction of the trend.

 

[brty]

Mate, a word of advice.....when you want to know if some method is applicable, better by far than asking people is to do your own research and make up your own mind.
Asking questions sounds good in theory, but the problem is that it can lead to you getting so many different opinions that in the end you don't know who to believe and who not to.
Nothing beats your own research when it comes to finding out what works and what doesn't. Chart time is the key. Look at thousands of charts going back dozens of years. Become so familiar with a setup that it almost jumps off the chart and bites you, so that you recognise it instantly when you see it.
Find yourself a pattern or a setup you like, one that's simple and suits your personality. Become an expert in trading that pattern. Practice and practice and practice until you feel you 'own' that pattern and you can just about trade it in your sleep.

Brilliantly stated Bunyip. Perhaps the single best piece of advice I have seen in ages, yet all just common sense.

There are so many on this forum who look to others for guidance when doing the work themselves is the real answer.

brty

 

[bunyip]

Brilliantly stated Bunyip. Perhaps the single best piece of advice I have seen in ages, yet all just common sense.

There are so many on this forum who look to others for guidance when doing the work themselves is the real answer.

brty

Didn't expect to find you and me agreeing on anything, brty, but there you go! LOL

Yeh, there's no substitute for doing your own research to find out what works for you and what doesn't. Could have saved myself a few quid on useless courses if I'd realised this early in the piece!

 

[weird]

Anyone know what Stan Weinstein is doing now ? I have googled ... could not find any funds being managed , subscription newsletters, further books etc. Is this guy still on the circuit/circus ?

 

[DaveMac]

Hey Weird,

Word is he does an institution-only alert system called Global Trend Alert. I couldn't find the web-page, sorry

You can google it, though - a few hits come up.

If you have a spare $40,000 a year, you can sign up... With sign up fees like that, who needs to trade?

 

[IFocus]

Didn't expect to find you and me agreeing on anything, brty, but there you go! LOL

Yeh, there's no substitute for doing your own research to find out what works for you and what doesn't. Could have saved myself a few quid on useless courses if I'd realised this early in the piece!

+1 ...................................

 

[rbbrain]

Anyone know what Stan Weinstein is doing now ? I have googled ... could not find any funds being managed , subscription newsletters, further books etc. Is this guy still on the circuit/circus ?

Hi Weird and others,

I just did a WhoIs search for the details for the owner of Stan's domain name "Global Trend Alert" (GTA), and I got the following details which you can view first hand at:
http://who.godaddy.com/WhoIs.aspx?domain=globaltrendalert.net&prog_id=godaddy

Registrant:
Global Trend Alert

333 Las Olas Way
Suite 1509
Fort Lauderdale, Florida 33301
United States

Registered through: GoDaddy.com, Inc. (http://www.godaddy.com)
Domain Name: GLOBALTRENDALERT.NET
Created on: 10-Mar-04
Expires on: 10-Mar-10
Last Updated on: 03-Mar-08

Administrative Contact:
Weinstein, Stan stanw@globaltrendalert.net
Global Trend Alert
333 Las Olas Way
Suite 1509
Fort Lauderdale, Florida 33301
United States
9542417365

Technical Contact:
Ianniello, Peter support@networkrescue.com
Network Rescue
4301 Oak Circle #11
Boca Raton, Florida 33431
United States
5619983636

Please note 2 important and useful things here:

1. Stan is the Admin Contact for the domain.
2. The domain name was registered on 10 March 2004; and
3. The domain name registration expires on 10 March 2010 (in about 60 days).

It looks like the domain name registration has been renewed every year or two since 2004 (the last one was 2008).

Now, you might ask why all this detail has any interest? Well, when you check out his web site http://globaltrendalert.net, it says "under contruction".

Conclusion: no longer active with the GTA.

But we know from all your research above that he still appears on TV, and other places with comment from time to time.

Stan is on the ATAA (Australian Technical Analysts Association) list as a possible speaker at the National Conference in Qld in October 2010. But not sure if we will be able to find him, or get him here.

 

[pavilion103]

I've just finished reading the book. A couple of points:

1. Does anyone see the value in the Advance-Decline & High-Low methods used for broader market direction?

2. In regards to sector selection, I've been told that the ASX sectors are heavily weighted by fewer stocks than is the case with the US Market. What are people's thoughts on this? Does this make selecting a strong sector less useful?

 

[Billyb]

I've just finished reading the book. A couple of points:

2. In regards to sector selection, I've been told that the ASX sectors are heavily weighted by fewer stocks than is the case with the US Market. What are people's thoughts on this? Does this make selecting a strong sector less useful?

IMO sector selection in Australia is useless. the ASX is too small and generally, all the stocks do the same thing at a given time irrespective of the sector, so you could consider the ASX itself a sector in the grand scheme of all the available stocks in the world. If Stan lived in Australia and limited himself to Australian stocks, he'd probably only buy when the ASX200/all ords and it's SMA200 is heading up, and he probably would't give a damn about our sectors.

most of Stan's other stuff is gold IMO. Except short selling, which, is also pretty darn hard to do in Australia without derivatives.

 

[pavilion103]

IMO sector selection in Australia is useless. the ASX is too small and generally, all the stocks do the same thing at a given time irrespective of the sector, so you could consider the ASX itself a sector in the grand scheme of all the available stocks in the world. If Stan lived in Australia and limited himself to Australian stocks, he'd probably only buy when the ASX200/all ords and it's SMA200 is heading up, and he probably would't give a damn about our sectors.

most of Stan's other stuff is gold IMO. Except short selling, which, is also pretty darn hard to do in Australia without derivatives.

I'm wondering if it is worth looking at the US market further down the track once I have had success with the ASX.

What are the disadvantages to trading the US market as opposed to the ASX?

 

[pavilion103]

Does anyone know what time period Weinstein uses for the RSC? I'm assuming it's just the 200 day MA as well?

 

[joea]

Does anyone know what time period Weinstein uses for the RSC? I'm assuming it's just the 200 day MA as well?

My RSC only has two imputs....Base Security......Exchange!
You are comparing the current chart to the exchange or a sector of the current time frame.
In other words it plots a ratio of two market prices.
A rising ratio line indicates the symbol being plotted is stronger relative to the benchmark it is being compared to.
Cheers

 

[pavilion103]

My RSC only has two imputs....Base Security......Exchange!
You are comparing the current chart to the exchange or a sector of the current time frame.
In other words it plots a ratio of two market prices.
A rising ratio line indicates the symbol being plotted is stronger relative to the benchmark it is being compared to.
Cheers

Ok. The one I am using looks like it compares the moving averages of the individual stock and the index.

 

[pavilion103]

_SECTION_BEGIN("Stan Weinsetin RSC");
maPeriod = Param( "MA Period", 52 * 5, 0, 500, 1 );
rsSymbol = ParamStr( "Base Index Symbol", "!XAO" );

rs = RelStrength( rsSymbol );
rsMan = ( rs / MA( rs, maPeriod ) ) - 1;

dynColor = IIf( rsMan >= 0, colorLime, colorRed );
Plot( rsMan, "RS Mansfield", dynColor, styleArea );
_SECTION_END();

This is the code I obtained. I'm not sure how closely this aligns with what Weinstein would be using.

Does anyone see the value in this indicator using the MA? Is this much the same as just using a ratio of price?