Technical Trading Suddenly Makes More Sense

Real1ty · 17 January 2008

With all due respect to the Technical traders you certainly didn't need to be a Techie to see what was coming.

Apart from the long term investors i categorize the ones losing now in these brackets

1: Have not been trading long enough to have seen a bear market or long corrections.
2: Have seen bear markets but due to the fact that it has been so easy to make profits in recent years had forgotten all about risk tolerance.
3: The ignorant.

I must admit i waited too long to sell out last year and saw some worrying signs mid year, that, well i suppose i was hoping things would turn around.

I sold out every profit, apart from goldies, i had in early December amid the cries of "Lemming" from a few on here.
I also put all my super into cash and advised family and friends to do the same.

I didn't sell on fear i sold on facts.
There was so many signs that things were going to get nasty and the only uncertainty was how bad was it going to get.

My point being that as much as T/A is a fantastic tool, it wasn't needed to pick this one.

Even Blind Freddie saw this one coming.

tech/a · 17 January 2008

GreatPig said:
I would imagine few stocks would have seemed fundamentally undervalued during the bull run, and I think the concept of buy undervalued and wait for them to rise is more a long-term strategy - not something you'd expect to perform outstandingly in just two or three years of a strong bull market.

The question I have is why do I see stock bought as undervalued then held while it devalues even more---without the analyst buying more---in Ducs case some stock fell a further 50% from his Under valuation.

So I'm not sure that it's really a fair comparison. Of more interest would be the comparison after 15 or 20 years, when the market has been through flat periods and bear periods. While I would personally expect a good technical analyst to outperform the value investor, I would also think the technical analyst would have to spend a lot more hours doing so, and a not-so-good technical analyst may well be buried and gone by then.

Cheers,
GP

Well we wont see that and even if started now I probably wont see the result! The Techie would have the edge due to opportunity cost encountered by the Fundi holding through thick and thin.

The BIG advantage is OPPORTUNITY COST which Techies can take advantage of by using stops.

The only difference in our approach Tech is that if you have a share which has been affected by market weakness even if you have a massive gain within you will sell based on your stop loss. I hold if there is no specific stock weakness as the tax on the gain could be greater than the small market correction.

Very valid point re tax one I learnt a few years ago!
Selling gain is normally governed by an exit rather than stop loss which is the initial risk----but I know what you mean.

If the stock has both fundamental weakness or technical weakness during a bull run I will sell but to sell all my current holding which will probably occur soon for most techies depending on what their % stop losses are would mean I would have a pile of cash and a pile of tax that I owe. Probably not a bad thing you might argue but again in 15 years I might have saved on tax, brokerage and have greater gains (through 1 yr holding rule) within a small number of shares or I might be on the dust heap with Ducatti and Realist. Only time will tell.

True MIGHT.If I take the gain I put away the tax and carry on.

My point being that as much as T/A is a fantastic tool, it wasn't needed to pick this one.

May be so for some.
However I doubt you can beat T/A for timing.
Its common knowledge that I sold out of all longterm portfolio's 16/7/07.

Again APPLICATION.

Kauri · 17 January 2008

Real1ty said:
With all due respect to the Technical traders you certainly didn't need to be a Techie to see what was coming.

My point being that as much as T/A is a fantastic tool, it wasn't needed to pick this one.

Even Blind Freddie saw this one coming.

I am soooo dissapointed.. wit ..the number of fully sighted Freddies who saw this coming but declined to share it with their fellow punters on boards such as this one..
Cheers
..........Kauri

MS+Tradesim · 17 January 2008

Kauri said:
I am soooo dissapointed.. wit ..the number of fully sighted Freddies who saw this coming but declined to share it with their fellow punters on boards such as this one..
Cheers
..........Kauri

Haven't the last few months on the forum just been one big argument between those who saw it coming and the permabulls who are now waiting at the abbatoir for their turn?

Or maybe you're being sarcastic.....

Real1ty · 17 January 2008

Kauri said:
I am soooo dissapointed.. wit ..the number of fully sighted Freddies who saw this coming but declined to share it with their fellow punters on boards such as this one..
Cheers
..........Kauri

Oh but we did Kauri.

Thing is some bulls snort and make a lot more noise than a bear, hence the bear is drowned out and retreats to his cave.

Or is the bear a Lemming?......

Kauri · 17 January 2008

Real1ty said:
Oh but we did Kauri.

Thing is some bulls snort and make a lot more noise than a bear, hence the bear is drowned out and retreats to his cave.

Or is the bear a Lemming?......

Your posts indicate that you sold out on 17th December...
I personally don't see that as .. seeing it coming...
we were well into (by about 10%??) the correction by then
I think even the experts on TV were calling it by then..
surely??
or not??
Cheers
..........Kauri

MS+Tradesim · 17 January 2008

EDIT: deleted as Kauri was talking to someone else.

Real1ty · 17 January 2008

Did you actually read my above post or run off to prove it wrong without reading?

I must admit i waited too long to sell out last year and saw some worrying signs mid year, that, well i suppose i was hoping things would turn around.

I sold out every profit, apart from goldies, i had in early December amid the cries of "Lemming" from a few on here.
I also put all my super into cash and advised family and friends to do the same.

I have said repeatedly in this thread that i am not having a go at the Techies, they do great work, but it was very obvious, i suppose as you said, it just depends on when.
It appears you think i am having a go at the Techies or even you in particular as you seem to have taken exception to it.
So much so that you have searched my history in an attempt to discredit my statement.
There are many on here that still don't believe in it.
Each to their own.

Interesting i also spoke about how much worse it would be here and the risk of Australian banks lifting their rates but of course you didn't point that out, as it doesn't suit your argument.

Anyway i don't want to get into a tit for tat argument with you so i will leave it at that.

tech/a · 17 January 2008

Kauri.
I was a little earlier 27/7/07 (thought it was the 16th!)

But also gave you the XJO top. 6880 Well it made 6851!

Kauri · 17 January 2008

Real1ty said:
Did you actually read my above post or run off to prove it wrong without reading?

I have said repeatedly in this thread that i am not having a go at the Techies, they do great work, but it was very obvious, i suppose as you said, it just depends on when.
It appears you think i am having a go at the Techies or even you in particular as you seem to have taken exception to it.
So much so that you have searched my history in an attempt to discredit my statement.
There are many on here that still don't believe in it.
Each to their own.

Interesting i also spoke about how much worse it would be here and the risk of Australian banks lifting their rates but of course you didn't point that out, as it doesn't suit your argument.

No argument from me... I try to deal in facts... quite simple..really..
I do however applaud your foresight in mid-December to anticipate rate rises.. and also seeing that it could get worse...
Anyways.. this wont get either of us anywhere so I humbly withdraw to my paddock..

Cheers
...........Kauri :frosty:

Kauri · 17 January 2008

tech/a said:
Kauri.
I was a little earlier 27/7/07 (thought it was the 16th!)

But also gave you the XJO top. 6880 Well it made 6851!

Hi Tech
Long time- no hear.. hows the new trading set-up going??
Your calls always interest me... one of the few I pay attention to
Like yours, mine are out there, posted in Real Time, warts and all, for all and sundry to see... certainly keeps you honest ..
Cheers
...........Kauri

ithatheekret · 17 January 2008

I'm no techy but they have had a good run over the last few yaers , as I feel the whole market was technically traded .

It wasn't technicals that alerted me to the coming drop on our indices though , it was pure fundamentals .

I will never argue a point with a fundamentally minded trader , because they have done their math , and the math will show the bottom line .

Technicals show the trend that the market is in and that is important , because the markets always look forward in pricing and always goes too far either way .

Fundamentals bring it back into line and discipline enters the fundamental trader , whom I'm sure has looked at the chart for an entry level , based on his or her calculations .

I nearly posted this in the books versus forums thread , but firstly learn the math , secondly read all the technical books you can get your hands on , listen intently to the markets sirens and seperate them from the background noise .

If you feel you aren't upto fundies , try taking on an external TAFE course to brush up your skills if you need to dust off and get the grey matter working again and bring yourself upto market speed .

I could quote quite a few posters here that have a complete understanding of this principle , but a short look about will find you many NPV solutions etc. plainly posted for you to brush your calculations up on .

If you want to succeed , first you must be willing to walk the walk , before you talk the talk .

Real1ty · 17 January 2008

Kauri said:
Hi Tech
Long time- no hear.. hows the new trading set-up going??
Your calls always interest me... one of the few I pay attention to
Like yours, mine are out there, posted in Real Time, warts and all, for all and sundry to see... certainly keeps you honest ..
Cheers
...........Kauri

LOL, have a sook mate.

"Oh the bad man made a comment that i didn't like, so i will make snide remarks until mummy kisses it better"

Have you thrown yourself on the floor in a temper tantrum yet?

Bit hard for me to put my thought in writing when i wasn't even a member at that stage.

Of course, i am just a BS artist, so you can safely disreguard anything i say from now on.

Would you like a tissue?

Kauri · 17 January 2008

Real1ty said:
LOL, have a sook mate.

"Oh the bad man made a comment that i didn't like, so i will make snide remarks until mummy kisses it better"

Have you thrown yourself on the floor in a temper tantrum yet?

Bit hard for me to put my thought in writing when i wasn't even a member at that stage.

Of course, i am just a BS artist, so you can safely disreguard anything i say from now on.

Would you like a tissue?

Sorry mate.... that post was directed to Tech/A...

Originally Posted by Kauri

Hi Tech
Long time- no hear.. hows the new trading set-up going??
Your calls always interest me... one of the few I pay attention to
Like yours, mine are out there, posted in Real Time, warts and all, for all and sundry to see... certainly keeps you honest ..
Cheers
...........Kauri

Frank D · 17 January 2008

While you guys are sitting on your hands, i'm back into banking stocks this week, bought ANZ , WBC, and picked up CBA @ 51.70 today....

I'm looking for counter-trend rallies upwards back where we started from the Yearly sell-offs......

Place those stocks in the bottom draw and repeat the process next year....

cheers
Frank

GreatPig · 17 January 2008

I'm looking for a little of that myself. Picked up SGM and TOL on Monday, with SGM up 9.9% and TOL up 3.6% since purchase. I'm hoping TOL will break back up through the gap for another run up. Both are being closely watched however.

Cheers,
GP

dhukka · 17 January 2008

tech/a said:
Ducati's rules were just crazy---but as a fundamental analyst he was/is pretty damned good.

Let me respectfully disagree. I admit to initially thinking that ducati knew what he was talking about. But as the months progressed it became more and more obvious that the didn't. I would ask anyone who can be bothered, to go back through the BHP thread and see ducati's analysis of BHP's FY07 results. It is woefully amateurish.

The reason he doesn't post anywhere anymore is because I took him to task with some analysis on his blog. He put out his usually vitriolic analysis of a company that did not deserve it. I pointed out several glaring errors in his calculations and his understanding of balance sheets. He tried to defend himself but just ended up digging himself into a bigger hole. After a couple of days of back and forth on his blog about this particular stock he deleted his blog altogether and has not posted here since either.

Ducati called himself an arb trader but I suspect that is merely just a mask for the fact that he does not have the courage of his convictions to buy stocks based on the fundamentals he presumes to know. There are a few others on this forum, such as ROE, that know far more about fundamentals and estimating a company's intrinsic value than ducati ever did.

tech/a · 17 January 2008

secondly read all the technical books you can get your hands on

Don't know about that.
Id be inclined to suggest specialising in one or a couple of Technical trading methodologies if trading shorter term.

While you guys are sitting on your hands,

Frank its a discussion,doesn't mean we're doing SFA.

Ducati called himself an arb trader but I suspect that is merely just a mask for the fact that he does not have the courage of his convictions to buy stocks based on the fundamentals he presumes to know.

Id say that's a fair assessment.

happytrader · 17 January 2008

Julia said:
Yes, Duc was probably the most obstinate person I've ever come across in terms of his belief in his rules. It was perfectly obvious from his results that he was failing to achieve a profit, but he refused to reconsider what he was doing.

Hi Julia

I thought it was rather sad that Mr Ducati put his ego above his burning desire to trade like a trader.

We all have expectations about what we think should happen or how its supposed to be. I myself was waiting for a Santa Claus rally that did not eventuate. So there I was out in the middle of nowhere on my mobile trying to sell at market with an obviously new broker. But get me out he did. I love brokers who follow orders without offering an opinion. Anyway that stop was my assurance that I could and would live to trade another day. The market is always right is a definite.

Cheers
Happytrader

Smurf1976 · 17 January 2008

Timmy said:
There is a role for fundamentals, but for me it is economic fundamentals.

I have no problem with a true value investment approach either - and like you and doctorj have said, such investors without excess leverage will have no concerns.

I haven't actually checked the value of any of my long term stocks this year and don't feel any need to. Might now just for curiosity.

IMO if you're a "long term" investor and are getting a bit worried then you're not really a long term investor. Either that or you doubt your original decision to invest.

Technical Trading Suddenly Makes More Sense

Real1ty

tech/a

No Ordinary Duck

Kauri

E/W Learner

MS+Tradesim

Real1ty

Kauri

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Kauri

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ithatheekret

Real1ty

Kauri

E/W Learner

Frank D

GreatPig

Pigs In Space

dhukka

tech/a

No Ordinary Duck

happytrader

Smurf1976

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