sorry my friend, I have been trading. I am trying though. I can only do that. I said there were no guarantees, and it is certainly possible you will not learn anything. But I assure you, it is not my intent to waste your time, or mine. When I get the chance, I will further explain my madness. Rs7
Yo RS7, you break my balls for a signature, I give you two, and still don't see either one of them??? Whats the deal poppy?
I am in a bit of a rush...going to the gym. But briefly, there can be no "rain on my party" I want and appreciate the tough questions. And I will answer them as best as I can. If it is too specific, I will PM when possible. But I only have a finite amount of time. 1. Relative strength certainly has a time factor. To keep it "simple" let's just use the strength of a stock or sector from the previous close. Now I have software that does all this for me, and in any time frame. In reality, I prefer to enter trades in stocks that ARE NOT showing great relative strength over the past short period of time (10, 20, 30 minutes, etc.) I will get to this further when I have more time. But basically, I want to buy strong stocks on dips. I want to be able to recognize the difference between a "dip" and a reversal. This is crucial. I want a stock that is "taking a rest". There are criteria. Of course often I will be wrong, and the stock really is weakening. This is part of trading. Being wrong. The idea is to be wrong less times than right. (I said this was a Simpletons Approach, so let it be for now). 2. Stock sectors. Whatever sources one chooses to use can be fine. Some have a Bloomberg, and some have only a newspaper. Or access to a web site. I think that some sectors are easier to define than others. Obviously CitiGroup is both a money center bank and a brokerage and a giant insurance company. But still, I would group it with JPM and BAC, and perhaps AXP more than with MER or MWD, or LEH. But I do keep them all together on my monitor. There are really not many big companies that have identical business models. What would GE compare to? That would be tougher for me to define. 3. Ranking. Again, I have all the software for this. But I seldom refer to it. Yes, it is more "eyeball" and experience. Since I have my usual suspects in each group, and my groups pretty well defined, I just look at my monitor and stay focused on the movements of the groups and the issues within. Again, simple. BTW, I define my "usual suspects" by choosing the most liquid stocks. I know many traders now prefer mid-caps, or whatever. This is a personal thing. I myself stay with the big volume stocks. And stocks that have a trading range wide enough to make a profit with without being perfect in my timing. Hope this is sufficient for now...going to the gym before my body totally atrophies. RS7
You are right..I had to empty my mailbox because everyone was telling me to, and I forgot to save the sig....send again. Besides, it's fun to break your balls. Ratshit 7 ....Has a ring.
Ok, back from the gym. Was thinking about relative strength while I was there, which seemed appropriate. Worked out with my brother in law. He lifts competitively. He weighs almost 100 pounds more than me. So how much more does he need to lift than me to have more "relative strength"? Well of course it is really not an issue in real life, because no matter how you look at it, he is JUST MUCH STRONGER. Yeah, in theory I could lift less weight than him, but be relatively stronger pound for pound. (which I assure you is not close to the case). But for the sake of argument, lets say that I could outlift him pound for pound. I am the $10 stock that is up 50 cents. He is the hundred dollar stock and is up only $4. Which is the better stock to trade? Here is a case in which I would say even though the $10 stock is up on a greater percentage basis, I would rather trade the $100 dollar stock. Here is my reasoning: It is not my style to scalp. I am not that kind of trader. So things being as they really are, the $10 stock is going to move in pennies. The $100 stock in lets say eights (to use a now archaic term). What is my upside/downside risk with these stocks? I know my commission is going to be lets say 2 cents round trip on either trade. The cheap stock I am looking for a 20% pullback. So now it goes from being up 50 cents to only 40 cents. A ten cent move. I get in, and it goes back to it's high. I am out with a net profit of 8 cents. The 100 dollar stock I buy on the same 20% dip. I buy it when it is up 3.20. I get lucky and get out when it returns to it's high. I make 78 cents. Instead of 8 cents. Of course my losses will be greater too trading this way. But what I like about bigger swings is that I have more "wiggle room". Now the 100 dollar stock is a rare thing now for sure. And this is just an example. But I do tend to avoid the stocks that are under 20. I used to love to trade CSCO and SUNW. Now I can't at all. How do you trade a stock that is moving in 1/10 of 1 cent increments? What used to be an eight spread on a stock now has 125 possible different price changes where it used to be one. decimalization has made trading much harder. I don't know why I wrote all this. It made more sense while I was doing bench presses. But bottom line, I avoid the cheaper stocks. I find them too hard to time. You have to be almost perfect. I don't know anyone who is perfect in their timing or anything else (except my wife of course). Anyway, I now get to use my new signature courtesy of the ever talented, gracious and generous PUBLIAS! PS: I know this is probably my most boring post to date. I will try and do better next time. No one bats 1000. Peace to All, RS7
Perfect! Looks better here (my office). Saw it at home, and the font looked too small. Must be my browser settings. Thanks!! RS --- The trader formerly known as Ratshit, the guy without a signature, and other assorted bad stuff. Where Is My Dip? Can't buy here. Just can't do it!!
Man sometimes you just have know when to suck it up and take a little more risk than usual... Was watching that tri form all morning, and when the ES blew theu 85 with an expansion in price and volume I just entered and prayed ... 99 times out of 100 I will never play the actual break, but will wait for a retracement or pullback, but then you risk the chance of her not being gracious enough to let you in... what was that Seykota quote... have to have the discipline to always stick to your rules, but always know when to break them PEACE my friend, Publias
while waiting for my dip: Another SIMPLETONS approach. As I mentioned, I just don't seem to be able to time things perfectly. For this reason, I will tend to get involved in a lot of small positions rather than a few large ones when I decide it is time to take the plunge. I will not get heavy unless I build up a good mark. If I have a bunch of small positions go against me, it makes it easier to book a loss if I find myself wrong. If, on the other hand I build a mark, I can add comfortably and have a little room to withstand a pullback. Also, if I find that my positions have moved against me, but only with an acceptable dip in the market due to my poor timing, I can comfortably add (on a small basis) to my positions. Keep in mind, when I do this, I am still very small relative to my buying power. You always want minimum exposure on positions that are not working well. So even if I double up I am still using a tiny fraction of my buying power. For me, the stars have to be lined up to get heavy. This means I have a substantial mark, which has not deteriorated in dollar terms if I add at higher prices (again, I am speaking in terms of being long for simplicity sake. mirror image on everything for shorts). Stars lining up=.....good internals, (up/down volume, advance/declines, all markets in same direction ...s&p, nas, and dow). Dow is an unimportant number technically because it is only 30 stocks. But I don't take the psychological impact this number has lightly. So I do give it more consideration than I believe it actually should warrant. Because I know other people think it is important. And what other people think is important IS IMPORTANT! The market is a very psychologically affected game. This is almost too important to even verbalize. It is all about perception. And not mine or yours, but that of the collective participants. Market looking very tradeable now. So more later. RS7
This is true. But keep in mind an opportunity lost is not money lost! And they always come around again. RS