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Kiss
Blu3...please keep to the TA easy stocks...either stocks with repeating patterns or as KW says up trending stocks..
One thing I have learn't over the years is to keep well away from low volume (illiquidity distorts TA indicators) and also TA unfriendly stocks
Afraid of a possible drop with a up trending stocks?....Unfortunately this is some sort of animal instinctive behavioural dysfunction we all have hot-wired into our brains....best way to cope is to reverse think (contrarians are good at it)...If you are not afraid of buying a down trending stock you are therefore sub-consciously not afraid of the drops..right?..eh?...This dysfunction shows up in a big way at certain times...E.g Cautious and Newbie Investors finally shaking of their fear and buying in big time when the market is reaching the top of its bull market cycle and these same investors ride the bear market all the way down only to finally give up and sell out with the feeling of hopelessness and despair near the bottom of the cycle..
Anyway you don't have to worry about this dysfunction problem at all because when you are using a TA discipline, TA decides to buy or sell, not you!!...With up-trending stocks unless there are divergences, TA is nearly always favourable so it's buy buy buy...Afraid of buying in and see the up trend end?.. chances are well in your favour that you will have capital gains by the time the trend ends..if your timing is wrong and the up-trend stock tops out (TA says sell), no problem just quit for a small loss and try again...
Remember two things...TA will tell you when to sell so no need to be afraid.....remember the saying Emotion Kills.. many portfolio disasters are due to misguided feelings, wishful thinking, biases, etc which create false logic and prevents you from selling out or buying in.... being afraid is an emotion and is one of the two most common emotions when share investing (the other is greed)..
I often hear investors say I've tried TA and it doesn't work..When analysing these people, the biggest failing they have is the lack of ability to let go control and trust TA to control for them..
Blu3...All the TA books in the world doesn't help make you successful..You have to have a certain mental makeup..A successful TA investor has to have an inner belief and confidence in the discipline they are relinquishing complete control to, and be able to stick with the discipline during tough times..there will be failures because TA is about 70% accurate (odds in your favour)...The test to see if you are a TA investor or not will arrive when TA says sell on a stock you have total opposite feelings to.. such as a stock with a perception of a lot of fundamental upside left in it... AIR is an example of this at the moment ....remember, trust TA.. if this stock is as good as you think, TA will soon tell you when to get back in..
Last edited by Hoop; 12-11-2015 at 09:24 PM.
Reason: Total re-hash
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Member
Hoop, you are spot on and I know that you are right. These behavioural things that you are referring to are well-described in the books “Thinking, Fast and Slow” from economic Nobel prize winner Daniel Kahneman and “Deep Survival: Who Lives, Who Dies, and Why” by Laurence Gonzales. Basically, each such instinctive reaction exists as a result of a natural selection on which depends the survival of a specie. Now, I can see how breathing or having sex help with survival of a specie but I'm still trying to figure out to which survival trait is connected the fact that we're scared of such uptrend charts, especially since we tend to follow group movements!
What's sure is that it's not easy to get rid of it and I'm not at a point yet where I can trust my TA readings—I'm still a bit clueless of when to buy or sell. Yesterday for example, I—finally—put all my current holdings in a spreadsheet and tried to define the stop prices but... it all went a bit too randomly. Also, thinking of it, it's a bit scary to not have access to the stop loss option with DirectBroking on the ASX (and I'm not even sure how to correctly use the “trigger when” thingy on the NZX).
Anyways, I will definitely read the books that KW mentioned in the hope that it will help me with that, starting with “Trade Like a Stock Market Wizard” by Mark Minervini. I'm far from being a fast reader so it might take me quite a long time to get through all of them. In the meanwhile I will try to pick some uptrend stocks to keep learning through (blind) experiments using my “much less than 1% rule”. Just a quick question in this regard—say that you would be interested in buying DMP, PRO, BKL, or other insanely uptrending stock which are currently trading way above their EMAs‚ wouldn't it be judicious to wait for a time when the uptrend will resume after a pullback in the EMAs area before buying in? I feel like I've been reading this a lot in Elder's book. Or is setting a tight (?) stop enough to process confidently with the trade?
In any case, I'm all pumped up now! Thanks for your insights Hoop, KW!
PS: I've been wanting to open an account with Interactive Brokers for a while since the commissions are lower and the charting tools look much better (thanks for the confirmation, KW!) but I've got no idea of how the transfer process works. Would I have to sell all my AU holdings, withdraw them in NZD from DirectBroking onto my NZ bank account, open the IB account after transferring the money in USD, then reconvert the money back onto AUD before finally being able to buy back the shares I've had? That surely would be costly in fees! Isn't it possible to simply transfer the holdings from one broker to the other since after all they are only intermediaries between us and the share registries? Is it actually a viable option at all to trade on the ASX with IB? Too bad that they don't seem to support the NZX though. On the other hand, gaining an access to the US market sounds a good compensation I reckon!
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Originally Posted by blu3
PS: I've been wanting to open an account with Interactive Brokers for a while since the commissions are lower and the charting tools look much better (thanks for the confirmation, KW!) but I've got no idea of how the transfer process works. )
Would it make sense for you to run two portfolios - one via DB in NZ and the other via IB in the US?
I'd be interested in what you decide to do, and the mechanics of doing that.
Thanks in advance.
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Most important thing i have learnt over the years is not to trade against the overall index.
The ASX all ords has had me not buying since 8/5/15
However its very hard to do, and i admit to a bit of bottom fishing a few weeks back, and it didnt go well, served as a reminder to stick to me no buying when overall index CCI 20 is below zero (weekly chart)
Then when it is above zero i buy new 52 week highs
Like i said before though , its very hard to stick to. Who wants to go six months without buying a stock?
Last edited by ratkin; 14-11-2015 at 06:36 AM.
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Originally Posted by ratkin
Most important thing i have learnt over the years is not to trade against the overall index.
The ASX all ords has had me not buying since 8/5/15
However its very hard to do, and i admit to a bit of bottom fishing a few weeks back, and it didnt go well, served as a reminder to stick to me no buying when overall index CCI 20 is below zero (weekly chart)
Then when it is above zero i buy new 52 week highs
Like i said before though , its very hard to stick to. Who wants to go six months without buying a stock?
Hi Ratkin
That looks like sound advice
Which charting software do you use ?
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Originally Posted by kiora
Hi Ratkin
That looks like sound advice
Which charting software do you use ?
Amibroker, but only because i like messing around designing systems etc. For the buying and selling, Incredible charts is more than enough. Its not the software that makes money its being disciplined enough to implement the plan.
One book and service i would really recommend to you is Colin Nicholsons book Building wealth in the Stock market. He also has a website, and for 60 dollars a year is well worth it for the amount of good advice on the site. He is a top bloke, not like most who are just out for themselves. I can speak from personal experience when i say he will go out of his way to be very helpful. He uses TA for long term investments , combined with FA to select good stocks
That is for my trading account at least. I also have the investment portfolio which is pretty much buy and hold, and i purposely ignore TA on that one. Thats full of healthcare stocks at the moment and has been for around ten years or more.
Here is a image from amibroker, showing how the simple CC1 20 on the weekly all ords chart has said since May not to buy any stocks. Like i said before, i ignored that advice a few weeks back, thinking i knew best. I didnt :-( Not much damage done, but am annoyed at my lack of discipline to wait it out completely.
afffppp.jpg
Last edited by ratkin; 14-11-2015 at 06:24 PM.
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Although I use Incredible Charts in a Windows 7 virtual machine (Parallels Desktop) on my Mac OSX [whic is much more simple than it sounds!], and like ratkin says it's fine for entering and exiting, especially for me who tends to work the weekly charts and use the daily for confirmations, I've been playing around with this http://www.investing.com/charts/live-charts recently which has some really nice tools on a modern clean UI and some intra-day time periods. Enjoy.
(oh .. but it doesn't have NZX companies, but ASX etc is fine)
BAA
Last edited by Baa_Baa; 14-11-2015 at 07:23 PM.
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Originally Posted by Baa_Baa
Although I use Incredible Charts in a Windows 7 virtual machine (Parallels Desktop) on my Mac OSX [whic is much more simple than it sounds!], and like ratkin says it's fine for entering and exiting, especially for me who tends to work the weekly charts and use the daily for confirmations, I've been playing around with this http://www.investing.com/charts/live-charts recently which has some really nice tools on a modern clean UI and some intra-day time periods. Enjoy.
(oh .. but it doesn't have NZX companies, but ASX etc is fine)
BAA
Thanks Baa Baa.Looks interesting.I will have a play too
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Member
Originally Posted by GTM 3442
Would it make sense for you to run two portfolios - one via DB in NZ and the other via IB in the US?
I'd be interested in what you decide to do, and the mechanics of doing that.
I guess it would make sense but I'm not planning to trade in the US anytime soon, and that is because of the NZD/USD rate not looking so good at the moment. I was mostly thinking of using it on the ASX for now due to the stop-loss option and the lower commission rates but then I would need to do more researches and comparison between brokers. As well as receiving feedbacks from the whole transfer process, for which I'd rather not play the role of the guinea pig
Also it would be nice for using their FA+TA stock screener since I couldn't find any good (and free) one for the ASX so far. In fact I wished that I had access to such a screener somewhere not related to any broker but most of them are not free, probably because the data itself is not free. Maybe a Wiki system would make sense here—everyone could contribute by adding the reporting numbers for different companies, which would hopefully provide enough data for everyone to use freely and builds tools upon.
Originally Posted by ratkin
Most important thing i have learnt over the years is not to trade against the overall index.
This definitely makes sense, thanks for the advice! That being said, I guess that there must be some exceptions like in every rule? I'm saying that because I've just found a stock that has a nice uptrend chart and that—so far—seems to outperform the S&P/ASX 200 for more than 2 years while not being too impacted by the slumps of the index. That is ASB (ASX):
I'm thinking of giving it a go even though I'll probably end up saying that you were right
Edit: I'll probably back up on this since I hadn't check the FA yet—which doesn't look that solid so far.
Originally Posted by Baa_Baa
I've seen that one too, and in fact many others that are all based on the same tool, that is TradingView. The cool thing is that their allow anyone to use their library and link it to any data that we want. The main condition being to make the resulting tool available for free on the internet, which is what investing.com is probably doing along with chart.bz and others. So theorically, it should be possible to register a domain name, buy a cheap web hosting service, send a request for their library, install it, and link to Yahoo's data to get access to the ASX, NZX, and anything else.
Last edited by blu3; 15-11-2015 at 05:52 PM.
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