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wbosher
31-03-2009, 01:31 PM
I've just finished reading Guppy's "Trend Trading" book. Has anyone used GMMA and the techniques mentioned in this book successfully??

I'm a complete novice who has read a few books and so far this one seems to make quite a lot of sense. It doesn't look like it will provide massive returns but 20 or 30% per successful trade will suite me fine.

Any advice will be very much appreciated. Cheers.

Jay
31-03-2009, 03:36 PM
Read a couple of his books.
Use the GMMA as one of the explorers in Metastock to filter for stocks to look at.
However, it can fire a little late sometimes.
Don't usually use it as an exit - not on its own anyway as again it can be slow to fire.

wbosher
31-03-2009, 03:44 PM
He say's to use a close below the trend line, along with the GMMA, to signal an exit. He seems to favour taking "bites" from the middle of trends rather than trying to time bottoms and tops. Seems to be a fairly safe way to do things...several bites could add up to quite a bit.

He also seems to like using the count back line as a stop loss, any opinions on that?

AMR
31-03-2009, 05:52 PM
I read about the GMMA in another book, Active investor by Alan Hull. He applies it for longer term active investing or what most people would call buy and hold and on blue chips only. He also combined it with another indicator (rate of annualised return) and used it for sell signals.

Absolute Advance on here used it for short term trading but discarded it I believe. Where are you AA?

wbosher
01-04-2009, 07:43 AM
From what I understand Allan Hull created HMMA which is designed for weekly analysis, the GMMA by Guppy is designed for daily use. I may be wrong but that's what I've heard.

Any opinion on the use of the count back line for a stop loss?

airedale
01-04-2009, 08:08 AM
I have found the count back line to be useful in helping to identify turning points...particularly bottoms.

Phaedrus
01-04-2009, 08:09 AM
Since Guppy's approach appeals to you, WB, I suggest you start by using his techniques. Initially, stick religiously to his system. Do not deviate from it one iota. See if you have the discipline that this would require. If you can't follow his rules, you won't be able to stick to any other system either - and the sharemarket is not for you. Guppy's systems are sound and would make a very good starting point for you. In time, you will find that you will have added extra components to it and perhaps dropped others. You will have begun the long process of developing your own system.

Your seeking of other peoples opinion of his "count back line" as a Sell signal sounds to me as though you are looking for a "recommended" exit indicator. There isn't one. Most people end up running several in parallel. You should too. Not that you will act on them, of course - you are sticking to his system, remember! You will, however, see what works well for you and what doesn't. You will eventually drop the ones that don't suit you and incorporate the ones that do into your very own unique trading system.

WB, don't waste time trying to find some sort of consensus here on ST. It's never going to happen. Peoples aims, expectations, circumstances, abilities, knowledge, skills, experience and risk tolerance are too widely varied for that.

I hate to break this to you WB, but you are on your own in an uncaring world and have to do the hard yards all by yourself. Nobody else can do them for you.

All the best!

PS: Don't ignore fundamentals. At the very least you should be able to read a balance sheet.

wbosher
01-04-2009, 08:36 AM
I suggest you start by using his techniques. Initially, stick religiously to his system. Do not deviate from it one iota.


Thanks Phaedrus, I'll do that. Not sure whether to jump in now, or wait for a few more months...but I guess nobody really knows that. :confused:

Thanks for your advice, very much appreciated.

airedale
01-04-2009, 07:23 PM
I have read one of Guppy's books. He is a skilled professional trader, but his style is not suitable for me. But he is a respected author and trader.
One of his self deprecating jokes is that even with all his experience, he still considers himself " just a guppy among the sharks" .:D

Jay
02-04-2009, 07:33 AM
Good Post Phaedrus.
Agree - each to his own and no doubt wbosher, you will develop your own variation over time.

wbosher
02-04-2009, 07:41 AM
Thanks everyone for your advice, I will try his "Trend Trading" method as this seems to carry the least risk of all the methods I've looked at so far. His advice on money management also seems very sound.

I really want to jump in now, but a little (or actually very loud) voice in my head says to wait a while so I might give it a few weeks to see how things pan out. Once again, thanks for the advice.

airedale
02-04-2009, 08:56 AM
You don't have to jump in WB, just do it in little steps.

Phaedrus
02-04-2009, 10:06 AM
I would suggest that you start "paper trading" immediately. Get yourself a trading journal and write everything down. What you "did", when, why and at what price. See how well this system works for you.

Why would you want to "wait for a few more months"?

Start getting some first hand practice right away. Learn the system and get some experience in implementing it before risking any of your capital.

wbosher
02-04-2009, 11:21 AM
Why would you want to "wait for a few more months"?

The only reason I am/was thinking of waiting a while is because I just can't get a grip on what the market is doing at the moment. A company puts out bad news and the share price goes up, or someone puts out good news and the price goes down...just doesn't make any sense to me. I thought that if I waited until things settle down a little, I might be able to make more sense of everything.

STRAT
02-04-2009, 06:47 PM
The only reason I am/was thinking of waiting a while is because I just can't get a grip on what the market is doing at the moment. A company puts out bad news and the share price goes up, or someone puts out good news and the price goes down...just doesn't make any sense to me. I thought that if I waited until things settle down a little, I might be able to make more sense of everything. Hi wbosher
Theres a lot more to it than company announcements.

heres a few to consider
What is the Market as a whole doing today

What did the other Markets in the world do last night
If you are looking at the ASX the performance of the USA markets the night before is a good indicator of what will happen today on the ASX and NZX

What do they sell and if its a commodity whats happening to the price of that commodity

Does currency exchange rates affect this company

Are their Announcements trustworthy. You can look back on what else they had to say for them selves and how it really turned out.

The list goes on but heres a couple of links to start with

http://finance.yahoo.com/intlindices?e=europe

http://www.kitcometals.com/charts/nickel_historical.html

http://www.findata.co.nz/Markets/Quote.aspx?e=INDEX&s=OILBR

shasta
02-04-2009, 07:35 PM
Hi wbosher
Theres a lot more to it than company announcements.

heres a few to consider
What is the Market as a whole doing today

What did the other Markets in the world do last night
If you are looking at the ASX the performance of the USA markets the night before is a good indicator of what will happen today on the ASX and NZX

What do they sell and if its a commodity whats happening to the price of that commodity

Does currency exchange rates affect this company

Are their Announcements trustworthy. You can look back on what else they had to say for them selves and how it really turned out.

The list goes on but heres a couple of links to start with

http://finance.yahoo.com/intlindices?e=europe

http://www.kitcometals.com/charts/nickel_historical.html

http://www.findata.co.nz/Markets/Quote.aspx?e=INDEX&s=OILBR

had you mentioned a 30 day ma, i'd have sworn someone up north has brainwashed ya! :D

wbosher
03-04-2009, 07:48 AM
Thanks for that STRAT.

airedale
03-04-2009, 08:35 AM
And www.stocknessmonster.com (http://www.stocknessmonster.com) is handy for a quick look at your watchlist and company announcements.

STRAT
03-04-2009, 08:50 AM
Thanks for that STRAT.Another thing to consider when the price keeps going down in spite of good news is that there are probably people better connected with a lot more money than us who know a lot more about whats really going on than we do.
Hot Copper is a site where they now have a chart for each ticker showing when Directors buy and sell in the company they are running. This is not to be taken on its own but is useful to know in particular if they are buying or selling big. To find out how big, trace the date back to company announcements.
note : there are also a lot of dodgy posters on this site IMO so beware with regard to posts. I seldom look at posts there but have sometimes found the news gets out there first and look there cautiously if no other site is talking about something Im looking into.

Phaedrus
03-04-2009, 12:06 PM
The only reason I am/was thinking of waiting a while is because I just can't get a grip on what the market is doing at the moment. I thought that if I waited until things settle down a little, I might be able to make more sense of everything. You are supposed to be following Guppy's system to the letter, remember? How else can you assess it accurately? He says nothing about "wait until you get a grip on the market" or "wait until things settle down" or "wait until the market makes sense". You could be waiting a long. long time!

WB, you are failing your first test. You have already added extra parameters to Guppy's system having chosen to ignore any "Buy" signals it may generate until you "feel differently about the market". If his system is of any value, it should work whatever the state of the market and whether you understand it or not. If you can't follow his system now, the chances that you will have the discipline to stick to your own system in the future are very slim indeed.

Start paper trading Guppy's system immediately, if not sooner! It is of little use asking everyone here what they think of it - it is what YOU think of it and how well it works for YOU that matters. Suck it and see! That is the ONLY way that you can evaluate whether it suits you or not.

wbosher
03-04-2009, 12:18 PM
You are supposed to be following Guppy's system to the letter, remember? How else can you assess it accurately? He says nothing about "wait until you get a grip on the market" or "wait until things settle down" or "wait until the market makes sense". You could be waiting a long. long time!


I started yesterday...I have already narrowed it down to 6 stocks. I now need to narrow it down further. I haven't even got to the GMMA test yet (as per Trend Trading), that'll have to wait until I get home tonight. My work has some policy about not installing 'unapproved' software on work PC's...go figure :rolleyes:

Dont worry Phaedrus, I will be sticking to his method to the letter. I just wanted to know why when a company puts out a profit warning of about 30% and the price goes up 20% in a couple of days, it had nothing to do with my stock selection I was just curious and confused...got soooo much to learn!!

Phaedrus
03-04-2009, 12:42 PM
A company puts out a profit warning of about 30% and the price goes up 20% in a couple of days - Why? Because the market was expecting bad news and had built it into the shareprice - but the downgrade wasn't as bad as anticipated.

wbosher
03-04-2009, 01:27 PM
You are supposed to be following Guppy's system to the letter, remember? How else can you assess it accurately? He says nothing about "wait until you get a grip on the market" or "wait until things settle down" or "wait until the market makes sense". You could be waiting a long. long time!

Start paper trading Guppy's system immediately, if not sooner! It is of little use asking everyone here what they think of it - it is what YOU think of it and how well it works for YOU that matters. Suck it and see! That is the ONLY way that you can evaluate whether it suits you or not.


Just the kick up the backside that I needed. Cheers! :D