Using TA to time entries and exits

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Originally Posted by Hoop

I've had enough of this crap ...I'm gone.
my posts will start to be deleted as of now
I'll leave you all in the "safe" hands of Paper Tiger ...the expert chartist with his fanastic charts and who knows it all....

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I wish to apologise unreservedly to Hoop.

I am sorry that I have offended you and will delete the post that caused you such distress.

I would also ask you to continue posting and promise not to be so critical again.

Best Wishes
Paper Tiger

Good on you PT

Though I thought that your post (original - not the one above) was a bit tongue in cheek - maybe that was just me

Human nature being what it is.....its always hard to be criticized and particularly when one puts so much time and energy into the product being criticized. Hoop has my admiration , for what's it worth, and anyone putting in the work, study and effort that he apparently does has to be respected for the professionalism in which he pursues his work. I cannot see the offending post or maybe its beyond my knowledge base but in any case PT has offered a full apology and seems contrite so it would be nice for Hoop to reconsider and re-appear. Otherwise the avatar descriptions will have to be added to as ''bring back W69, Hoop etc.etc. etc." I don't follow the intricacies of TA so cannot comment on the validity or rightness of either of the posts , but I do know that investing and share trading is a big and strange universe and all views are valid to at least one person. Very few posters posted charts like Hoop and this forum would be a lot poorer without his views. In the weeks and days after being criticized clarity resumes and the old saying is "you cant please everyone all the time". However every now and then we can all learn something from criticism.. and when all is said and done you can always come back with my favourite line from Father Ted. "Fek off". All in good fun of course.

Absoulutely Fek Off agree. Hoop I'm prepared to send you some Vitamin D and a Swedish Massage Matron with birch twigs to thicken your skin;). Life is too short to react to; but long and satisfying if one responds to it........

Love you Hoop..your work. Keep it up Man!

Hi Hoop
I also a rare poster and a frequent lurker.
I really appreciate your work and charts on this forum.
Please do stay around and post your lovely charts.

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Originally Posted by KW

I dont use the EMA cross, but buy when the price crosses above the 200 EMA and sell when it crosses below. So in DIL's case I would also have been in, out and in again (and still in). I dont see the EMA's crossing several times in my chart (?) - but it would still have been a risk management decision to exit or stay in during the October dip. One thing i am mindful of is that often shares coming out of long downtrends don't just go straight back up, they often rise and then fall back to test support, before rising again. Othertimes the price movement is nothing more than a Fakeout. You have to make the decision whether you are going to have a bit of tolerance with volatility while the uptrend plays out, or whether you play it safe and exit so as to preserve your capital. I usually play it safe, and am okay with several failed entries/exits before the share settles in for the long haul. In the DIL case you would have bought at $4.60, sold at $4.50 and bought back in at $4.60 - so the price of your risk management strategy was 10c a share. With EBO I wouldnt have been in at all (despite Percy's love for this stock LOL) - it has a long history of being rangebound and therefore you know before hand that you are going to get a lot of confusing TA signals. Try to stick to stocks with a history of long uptrends. There is no magic in TA - you will never get guaranteed results, all it does is shift the probabilities of success in your favour and keep you out of crappy stocks.

Attachment 7140

EBO 2 year chart - way too hard to figure this one out!

Attachment 7141

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EBO.I think you are looking at too short a time frame,which is not giving you a full clear picture.
I have not been able to find the 23 year chart that is clear in my mind as a happy holder,however the 15 year chart is not a bad place to start.The 495 day moving average shows there would have been very little gained by selling when the share price has gone under it,but an awful lot would have been gained by buying when the share price has moved up through it. lol.

Lo and behold..!!!!!!
Just when one could be forgiven for thinking EBO was rangebond,EBO springs back into life, and confirms the very long term upward share price trajectory is in tact,by setting another all time high.NB just gone ex dividend too.!!!!! lol...

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Originally Posted by KW

I thought I might start a little discussion on the usefulness of TA for timing. Now I do NOT advocate trading based on TA alone (tried it, lost a lot of money) but if you have used FA to identify a select list of good prospects, TA can be quite useful at knowing when to buy, when to top up, and when to sell. The following are all examples of some of my recent share purchases and sales.

1. When to BUY
I only ever buy companies that are in an uptrend. (Tried buying downtrends, lost a lot of money). The trick is to know when to enter. Get in too early, and the uptrend may turn out to be a dead cat bounce, or fizzle out. Get in too late and you may miss most of the run. My favourite entry point is when the 50 day moving average crosses above the 200 day moving average and the share price is above the 50 day MA. While you miss the early run, the risk of the uptrend not continuing is somewhat abated. I have tried entries based on just the share price crossing above both MA, but 3 out of 4 picks fail to continue on. I confirm the trend by watching the MACD (needs to be in positive territory).

Example: CGF - entry was in early March, when the share price moved back above the 50 day MA and the MACD turned up ($3.64 - $3.81)
Attachment 4517


2. When to TOP UP
Companies that are on exponential uptrends often present difficulties in deciding when to jump in. I have found that many pull back to a moving average, providing excellent entry points while the stock pauses and gets ready for the next leg up. Again, I use the 50 day average and MACD to confirm the uptrend is continuing, rather than the price decline being the start of the new downtrend.

MFG - has been in a strong uptrend for ages, but it took a breather and retreated to just below its 50 day MA. Entry point would have been end of April when the MACD went positive, and the stock price crossed back above the 50 day MA ($6.94 - $7.14)

Attachment 4518

Another great example is SIV - entry point is end of February ($5.90 - $6.28)
Attachment 4519

3. When to SELL
The first warning is when the share price drops below the 50 day moving average and the MACD turns down. This should put the stock on a watch list - its either a good time to top up, or a sell signal is going to be coming up shortly. If the price drops below the 200 day moving average I usually sell (I say usually, because its not uncommon for traders to try to drive the price down that far in order to trigger a bunch of stop losses, so you need to watch out for this little trick as often the share price rebounds immediately. IIN and CSV are good examples of this manipulation). If the "death cross" occurs (where the 50 day moving average crosses below the 200 day moving average, this is a signal that the downtrend is now firmly established).

ALQ - I bought into this thinking it had turned the corner and was heading back into a strong uptrend. Alas it was not to be, and in mid-March an exit was signalled ($10.50 - $10.80). Even though the price has rebounded recently, its still a death cross situation, and its more likely than not that the downtrend will continue for a while.
Attachment 4520

I hope others find this useful - its how I make decisions at the moment, its very simple, but pretty effective. Its part of my "get rich slow" investment strategy :-) If anyone else has any examples of when they enter or exit, then please post them.

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With the asx looking bait dicey i went looking for this excellent advice from KW. Time to go thru all my stocks again and check the charts.

Im trying to understand post 110 KW .." .I dont use the EMA cross, but buy when the price crosses above the 200 EMA and sell when it crosses below. .."..with the very first post where you say you buy when the 50 crosses the 200 as well ?

Have you changed your strategy a little ? Or am i miss-understanding something
Cheers