Alexander Elder's Entries and Exits

[ruethewhirl]

Who's out there, in a day job, reading Entries and Exits or any of the other myriad trading books available on the train in to work, trading stocks with your own money, spreadbetting, winning, losing, writing it all down, trying to learn?

Want to talk about it? Your winners AND your losers, how you go about it?

Want to share analysis / stock searches? Your favourite picks, and why?

Any interest in joining a group of dedicated amateur traders to learn, trade well and make money?

[duncan macgregor]

Who's out there, in a day job, reading Entries and Exits or any of the other myriad trading books available on the train in to work, trading stocks with your own money, spreadbetting, winning, losing, writing it all down, trying to learn?

Want to talk about it? Your winners AND your losers, how you go about it?

Want to share analysis / stock searches? Your favourite picks, and why?

Any interest in joining a group of dedicated amateur traders to learn, trade well and make money? I can only relate to how i got started and the changes that i made on the way.
1, I paper traded for two years before i used my own money.
2.I started off with fundamentalist ideas, but over time found Technical analysis to be of far more importance.
3,There are no books, systems, magic wands, or whatever that beats straight out practical common sense.
4,You must expect to be wrong once in every four decisions, so when buying know at which point you will sell if it goes wrong, take a small loss then move on.
5, Only stick to your level of understanding, it is more important to understand the market than it is to get bogged down reading last years out of date company reports.
6, Its not what the company did last year, its what it is doing right now going forward that counts.
7 All good shares become overpriced at some point, thats when to dump them, the company should mean nothing at all to you if your attitude is right.
8, The rising sector comes first your system comes second and the company comes last in order of preferance.
9, I invented my own method of investing copies are always second best thats why a paper trading apprenticeship is the only way to go.
10, Most things you read on finance are either a distortion of the truth, or a pack of lies, beleave nothing until proved otherwise.
Macdunk

[roddy]

Hi ruethewhir,

have you read much of Elders, i have trading for a living,its a good read and down to earth.

Are you interested in ta or fundamentals?

cheers
roddy

[AMR]

Yes, trading for a living is an excellent introduction to TA, but it's only an introduction. You need to backtest and backtest to develop a suitable system.

[ruethewhirl]

For those of you who havn't read ENTRIES AND EXITS, the concept of the book is based around 16 traders, each who appear to be close friends of Dr. Elder's, showing two trades each, a winner and a loser. Dr. Elder's analyses each of the trades presented in the book too, telling what he thought was wrong / right with each one. He stops short of showing two of his own trades and subjecting them to a similar analysis.

He seems to favour stocks that have been "beaten up" and are now tracing a bottom and turning up. Then essentially trend following until his technical signals tell him to exit. He seems to want to short stocks trading at all time highs, especially if the technical picture supports that action.

I had success recently with the stock OMH - it appeared to be trending up after recently falling quite low. I exited when the price rose very high above the moving averages - this is something Dr. Elder advocates, in a sense you are selling "above value", and are then free to enter when the price recedes back to the moving averages.

I'd be interested to hear the factors that have a bearing on your approach to the markets - do you scrutinise the big indexes - DJIA, etc, regularly, when forming your overall picture of bullishness or bearishness, or do you strictly look the charts of individual stocks? What about sectors?

I don't really look at fundamentals much past the market cap and PE ratio. I kind of like mid-caps, around 100-400m. I figure they can grow faster than say a 2000m company.

Do you guys keep diaries of individual trades, I mean, print-outs of your charts, comments on what made you buy, etc, etc?

I have started doing that, but it is much more time consuming than I ever imagined, I mean to really mark up and fully annotate a single trade. I guess it makes me much more thoughtful about the stocks I am buying. If I can't write down my rationale for buying a stock, maybe I shouldn't be buying it! It has definitely made me less impulsive.

[roddy]

Hi Ruethewhirl

Sounds interesting,one thing from Elder i strongly subscribe to is money management,i trade mini currency and without applying the 2 % rule i would soon have no capital

roddy