Using TA to time entries and exits

[Hoop]

Well done.Good strategy

I don't know about the well done, but thanks anyway..
I'm starting to act like a rabbit investor ..a car backfire and I'm off down the rabbit hole..

[JBmurc]

Just been looking over my shares I sold over last 6-10 months etc ... to focus just two companies that I would do far better over a shorter timeframe than others has really cost me as one did move strongly the other has gone down ...I'm sure I'm not the only one kicking themselves for not holding many shares for longer in 15/16 ... been a boom year for the sectors I follow>>

first and last year I just hold 2 shares ....min 4 from 2017+

PGO-sold 2.3c now 14c .
ATC-sold 10c now 16c ..
CAV- sold .6c now 1.4c
PHK-sold 3.5c now 10c
TRY-sold 43c now 53c
MGX-sold 21c now 29.5c


simply gutted >>>>>>only one company I sold and glad to have was ACG saving me 20% loss in value...

funny as a tax paid trader I haven't traded since early march (the least in several years) .....just holding two shares waiting on the big pay day which is coming

[kiora]

I don't know about the well done, but thanks anyway..
I'm starting to act like a rabbit investor ..a car backfire and I'm off down the rabbit hole..

Hmm,yes I know what you mean.I got nervous & reviewed portfolio back at beginning of year, sold some stocks that are up 25 % & 40% since More growth orientated companies where added to the portfolio and the portfolio that was retained is up 30% since January and bank OD is looking healthy.I didn't sell any during GFC and the portfolio went down around 75% ouch but felt I could ride it out as portfolio was made up of financially strong companies.Well in hind sight it may appear a dumb strategy but share portfolio now up 150% from peak value before GFC (2008?) .I find it difficult to trade successfully as it is difficult to time selling & repurchasing.I suspect there needs to be a 20% movement up & down in a share price, to ensure trading is successful over the long term for me .Over 30+ yrs of investing has hardened me to the volatility in my portfolio particularly now when interest & inflation are so low but where to from here? I am following your posts with interest to try and work out if I can improve on my investment strategy with consideration to the time required and nerves
Interesting to me is Ratkins portfolio from what I can deduce,(Health & retirement orientated) is performing 10% better than mine but mine is closing the gap in the last few months having invested in growth orientated companies but I'm very wary as any risk off market period my portfolio is likely to take a hit.

[workingdad]

I like to trade charts naked - google that WD, it's not what you think.

AIR - I alerted folks to the bearish Head and Shoulders formation a while ago, then called the bottom at 2.02, physically entering a position myself a day or 2 later. I recommended a stop level, but I'm naughty and don't follow my own protective recommendations, as I like the thrill of the chase. They are put in to save others from themselves if a disaster happens. Ever since then we have had noise, noise and more noise (in the price, not the thread), and unlike the take-out cups you get on airlines, I see a very nice Cup and Handle has formed on my naked daily. In usual circumstances, this should mean a decent rally.

You correctly observed the higher low at 2.15 - good work

Yeah I can think of other things to do naked that would be much more fun than that but being married means I don't experience them as often as I would like

Reading all the comments in the last few days really details the complexities of charts and how long it would take to get a handle on them (no pun intended).

Looking ahead I think its stating the obvious but SP will be dictated by the EOY results, outlook and associated special divvy but in the interim, I would be surprised if there is another drop and predict it holding in the current range and perhaps even track upwards bit by bit as it gets closer.

[Snow Leopard]

...I would be surprised if there is another drop and predict it holding in the current range and perhaps even track upwards bit by bit as it gets closer.

If there is one thing you learn with experience it is that anything can happen.

So, be prepared to be surprised.

"I don't make mistakes. I make prophecies which immediately turn out to be wrong."
― Murray Walker



Not a black swan.

Best Wishes
Paper Tiger

[workingdad]

Fair comment PT - less likely probably a better way to word it - I wouldn't understand why anyone would sell so close to results time when we have a fairly decent indication of a special and with that a lift in SP. Just my thoughts of course.

[Snow Leopard]

Fair comment PT - less likely probably a better way to word it - I wouldn't understand why anyone would sell so close to results time when we have a fairly decent indication of a special and with that a lift in SP. Just my thoughts of course.

Proper Technical Analysis never asks why did that happen, but should tell you what to do about it.

Best Wishes
Paper Tiger

Disc: I wouldn't understand why anyone would invest in AIR in the first place

[workingdad]

Proper Technical Analysis never asks why did that happen, but should tell you what to do about it.

Best Wishes
Paper Tiger

Disc: I wouldn't understand why anyone would invest in AIR in the first place

Probably the same reason they invest in any share - to make money. There are winners and losers in most out there, I caught the falling knife a couple of times on the way down with stops in place (after the first decent drop that is) but played a smarter game from there trading in and out most days by selling first thing in the morning and buying on close and then scored more at 2.07 which I held then the BREXIT thing topped up at 2.035 and then more again at 2.11 and in the green overall. Smarter people bought up in the low 2 dollar range and now turned around 10 to 15% gain in a matter of weeks.

Why wouldn't anyone invest

[whipit]

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).

I saw this Maersk trend this morning and it reminded me of this post. I've been wanting to contribute a little here, as I've gained a lot. So I thought I'd share :-)

Looks to have broken out of the 12 month down trend
50 day just about to cross the 200 day MA
MACD positive

My only concern is it looks a little over bought. So I'll watch it for the next couple of days to see if it retraces to the 9585 mark to get it. I'll report back how it goes, or if I change my mind :-)

*apologies it's from a market miles away

Attachment 8255

[Joshuatree]

The gift that keeps on giving. Although I'm a slow learner with this at times esp with the selling..

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.