BT: I considered picking up "Evidence-Based..." a while back. I got the impression that it does a LOT of debunking of TA mythology. As my methods are homespun, this is of somewhat limited value to me. Does it actually give any guidance as to where one might look in the search of useful nuggets? Why do YOU personally like this book?
Yes, this is the best way to go through it. When you come to a post which describes a "step" in detail, write those steps out. When you come to a post which raises a question, write the question down. I can almost guarantee that it has been asked and answered in the journal a number of times before. You may want to read through Spyder's journal first, and then go back and evaluate your trades. If you find the concepts presented resonate with you, you will most likely drop your current system. Best of luck with the birth of your next child. -Au
"So I bought a book on swing trading called "A beginner's guide to short term trading " by Toni Turner." What else have you read?
I grimace as I say probably not enough. But see, it's good that you ask because it's kind of like kicking me in the butt and telling me to go do some more homework. Here's what I have read: 1.Two other books by Toni Turner - one on daytrading and her newer book, "Trading in the new stock market." 2.Two books on candle charting by Steve Nison. 3."Trading for a Living" by Alexander Elder. 4.Two other books on trading that I don't recall the titles of. 5."Mad Money" by Jim Cramer. I actually don't watch his show because I don't get cable (seriously, I don't), but I was reading the summaries of his show on thestreet.com and decided to spring for the book. I know that a lot of people don't like him, but he does have some good points, good credentials, and I think it's funny the way that he can move stocks just by a simple comment. Then I've also read a couple books on investing in general. I get Investor's Business Daily, Money Magazine, a number of free newsletters, and I read the Wall St. Journal whenever they have free access. That's it. If you have any suggestions for books that I absolutely must read then please let me know.
I only asked to get a sense of what direction you might be heading with your trading style. Plenty of posters will have book suggestions as I do also but from what you've read, questions should come to mind and follow up on other books. Sometimes I'll just stare at the shelf at Barnes and Nobles (or where ever) and think which would be the best books to recommend since I have read many of them, ultimately my suggestion is to read all of them {:>). You'll know when you have had your fill and which ones are garbage but unfortunately not until after the fact. Although, I don't think you can ever go wrong with the Stock Traders Almanac by your side on a daily basis. Re: other books,etc., read critically, discerning authors intent, authors have a motive esp in this business.
"Technical Analysis of Stock Trends" - Edwards & Magee "Trading & Exchanges: Market Microstructure For Practitioners" - Larry Harris -Au
I didn't make any comments yesterday because I was too busy reading up on Spydertrader's Journals. Yesterday I decided to keep both stocks that I've been holding - YHOO and MFW. Today however things looked very different as anyone who watches the market can tell you. The major indices pulled back to the 20 day MA. YHOO moved down and within the first half hour passed my stop. I decided to get out early - around 9:45 at 28.00. Total loss =4.17%. It could have been worse. If I had stayed in the stock I would have lost at least 2% more as YHOO moved down pretty far intraday. I've attached a chart of YHOO, showing where I entered the stock and where I exited. My major mistake with this stock was buying it in the first place because I knew that it wasn't highly rated, but I had seen that it had held on support made from the gap and this seemed to be a positive indication that the stock would go up. It did move up on the second day, but then it hit resistance at the 20 MA and 50 MA that sent it back down. I take a few lessons from this. 1. Don't buy a stock unless it's highly rated. 2. Don't buy a stock that is trading below its 50 MA. 3. Sell as soon as a stock hits my stop - don't wait until the end of day to see if it moves back up. Previously I have been waiting until the end of the day on the theory that if a stock falls below my stop (usually a support level) and then moves back up that's a bullish indication to stay with the trade. The problem with this is that I've been taking deeper cuts than I want to. So I've decided to change my rule. Now, a stop is a stop. If the stock moves back up over my stop by end of day, then I will need to decide if I want to buy it back, and if I do then i need to treat that as a new trade- going over all the criteria again. Hopefully this will help my bottom line. I intend to keep MFW for now. It's staying positive despite the fact that everything else is down.
Right now my goal is to simply beat the SP500, but eventually I want to do much better than that, and I'd like to get a sense of what that kind of number looks like. So I'd like to take a little poll. If you (anyone) could tell me approximately what you made (percentage wise) over the past 2 1/2 months (from the point that the rally resumed until today) that would give me a sense of what I should be aiming for. Please include equities only and swing trades only (no day trades). And please be honest. I know we all like to brag about how much we made, but I want to get a serious feel for what I can expect. Also, I know that the past couple months the market has been on fire, so if you think your numbers wouldn't be very accurate, then you can choose any other time when the market was in a general uptrend. Thanks, Kae
Best advice I can give you: 1. Lose this idea of beating the S&P 500. That is how mutual fund managers speak and they are horrible traders. YOUR GOAL is to make money, period. If S&P is down 30% and you are down 10% you beat the market but does it make you feel good? Of course not. Focus on making money and leave the talk of beating benchmarks to the mutual fund marketers. There will be the rare times when the S&P explodes for 30% and the times when it crashes 30% but it makes no difference to you. If you have a sound investment and risk management plan, your goal is to make money as consistenty as possible. 2. Forget what other people make in the market. We are always curious what others are doing as though it works to justify our own performance. Traders/investors do this to make money. Your focus is to make money. Think honeslty about whether your abilities to do so have anything to do with what others are making? What if everyone was down 10%, what if they were all up 60%? It makes no difference to you or to your portfolio. This is the kind of thinking like asking what kind of car your neighbors drive to make sure you are getting the right car simply on looks or image. Trading is hard work and the more time you spend focusing on your own work and discipline and less on benchmark indexes or what the Jones are making over a 2 month period, the better you will be. You are looking for a crutch to define your performance. If you made 4 % and most others made 4% then you think you are doing the right thing and ignore actualy looking at your performance and judging it on its own. I am not being mean or nasty, I am being honest. Benchmarks and comparing notes with other strangers will not help you one bit in making money.
Read your journal up to the last page... your methods are very close to mine although I do not use much candlestick analysis. I use O'Niel's methods for stock screening and then find setups I like and take them (mostly pullbacks via Landry entries). Anyways, forget what you read on yahoo message boards unless you are using them as a contrary indicator. Actually, forget what other people tell you about your positions in general as a rule. If you have reasons for your entry don't let someone else tell you otherwise... everyone sees the market with a different angle. GL, though. You and I are in a very similar boat. Under recomendations from an acquantaince I have begun to read some Jack Hershey stuff as well... although I don't plan on switching anytime soon simply because it just hasn't clicked for me yet.