I used to trade stocks holding for 3-5 days. My stocks were chosen based a bit on common sense technicle analysis and looking at the news, I would read hundreds of news articles and was lucky if i could get 1 opporunity every 2 months. When I would find an opportunity I would usually get 20% gains consistently but this would just be a few times a year. I am willing to accept that there is a 30% chance this was pure luck and if i continued it i would lose everything. As it is said "trading the news never works" ( a theory i believe in 98% of the time.) I am 100% self taught. by self taught I mean I never read a book or looked in to these kind of forums, I started by looking at the highest percent gains and then reading to see what news was relevant. and found only 2% was relevant, I wouldn't touch mining stocks cause i just didn't understand their news, it was too technical. This was years ago, like when google just IPO'd on german or deutch auction which i couldn't buy for 80$ because i was not a US citizen, i wanted it purely because google was a well known name and one of the most well known IPOs out there. for sure it would get alot of news exposure that would sell shares, now Im looking to get in to trading a bit more seriously and started learning technical analysis I got the book "high probability trading " as recommended by users on this site started reading it and found it to be very obvious.Though im not done the book. I have used these Technics in the past I came up with indicators that some one explained me over cofee in 5 mins and then added things on my own. Never relying totally on technical aspects, now I am back in the game. I want to difine myself and found that despite the fact i trade the news that TA would be the best place to start as they look at the graph as much as i do , I'm reading this book and am not too impressed so far, 30% gains a year are good but i know when i was doing it and was getting 20% every 2 months, but the opportunities were too far between. In the book it refers to swing traders, I have no idea what that is but also seems like a short term strategy. Im not sure where i fit and if i should continue learning TA. I was wondering if there is are other sub groups of traders that can relate to my old technics i used to use. or some one that started off like me and then moved up to something they found better, or am im like the only person that trades the news and uses technicle analysis, i know i have to learn this stuff and will continue this book also i have downloaded "trade ideas" (which is looking promising but seems to be a stratagy that is not recomended at least in this book( buying break out stocks)).. Also i have ninja trader that i have no idea what it is it just opens and then i close it, I want to try trading i have looked in to IB and MGB a bit. Technically i am very poor but i guess i can learn Im not sure what startagy I want to use, I think I just want some thing that is consistant any idea if I'm barking up the right tree here?
OK. I'm sure I will offend some people, maybe not. Keep in mind this is my journal and will show a progression of learning. A while ago I tried convincing a friend to invest so that we could buy and sell stocks, he was hit hard with his mutual fund droping around 30% and slowly regaining last year, Needless to say it was a hard sell. Then I told him.."Look I'll buy stocks and put a stop loss at a few percent lower then we bought it so the loss is limited and would be in our control" This partnership may not have been a good idea, knowing now that i can leverage on my own. It never materialized, I have been spending my time since my last post reading and learning about trading, I must say i was really disapointed, the first bit of every book 100 pages or so is always about risk managment, basically the same thing that i was explaining my friend to put a stop loss, this topic is always emphasized in every chapter if not every paragraph ( i hate reading). As i follow, trading is all about buying a stock and if it doesnt g your way to sell it, this seems to be 80% of the work, the other 20% seems to be looking at charts and locating trends and going long or short in the direction of the trend, though it call all seem complicated all the indicators stuff is basically simply taking data from a chart and seeing if it is going up or down, and at what rate its going up or down, sure there are certain patterns to look for and all but I feel if you buy a stock that is going in a generally up direction as long as you have your stop loss close to buying you should have limted your loss and if it goes up the sky's the limit, This can actually be done blind with out any knowledge of reading a chart, all the indicators simply increase your chances of being up a few more times then being down, however they limit your buying and selling, If you randomly buy 100 stocks and sell ones that go down a few points and hold those that go up you will have a lower success rate but will have been in and out of more stocks there fore gving about the same net positive. I may wrong about a few small things but i feel in general the idea is clear, its not so much how much you know about reading a chart but more so about limiting your loss, limiting your loss can be learnt in a 3 min convo, so i kind of feel like all this reading is useless, dont get me wrong im still gona continue my reading just a bit depressed that all the indicators and stuff aren't as solid indicators as i was hoping, If i had the patience i would take 10 stocks at random and n every one just guickly look at the graph and decide if its on a up trend or down trend and paper trade them with a stop loss at 2% or so under my buy or over my sell price, im sure id come out on top this of cource would just be paper trading. but Its funny that the books i read all focus primarly on limiting loss, and that without that you are lost, i read one of the books i sware in it it said that the best traders are right about 51% of the time and wrong 49%. its just that they dont loose as much as they gain cause of stop losses, so i wonder what you guys have to say about this , am i correct in saying that trading is 40% luck 10% reading charts and and 50% limiting loss? would you agree?
ok so as i mentioned i have been doing some reading and am going through some of the technicle aspects of things, it comes naturally to me and i dont want to get too deep in details just yet so im just reading and learning not really memorizing yet , how much of this stuff do i actually have to really know like the back of my hand? like basic resistance and support based on opens and yesturdays or today high, and moving averages, all of that stuff is known naturally. the patterns will have to study like shooting starts and all that, but are these more advance things realiable ? is it like some thing that will really change things , or is just knowing the basics ok ? as long as i sell when in a loosing situation 2% lower thn my buy. i mean i will learn it but would like to start trading on my own as soon as possible (im ready to loose money, though it is not my goal) i dont want to start with paper trading as i am willing to accept that i will loose at the begging. I mean even if i paper trade with such low margines it doesnt really tell much as your never sure hat price your order will be exectuted on . basically, Is it rocket science? i usedto trade before using other staragies, and did very well after a initial break even or slight loss period, I was able to buy stocks with no knowledge of TA I just kinda made it up as i went along, and was smart enough to find my own strategy, Though now m trying to learn about TA more. my trading style was kind of like my posts, very untechincle and more based on feeling which was based on uncalculted (estimated) ideas all put together with no actual figures behind them. not to say it was random it as really thought out with alot of research that devloped in to a feeling. I mean in the end isnt that all it is you get a positive or negative feeling (whatever it is based on) and bet, limit your losses and your good to go. Or do i really need to know these indictaors like the back of my hand and if i dont i will be royally screwed ?
Now, looking ahead I will need some software and a brokrage account that down the line will give me some leverage, the reading I am doing sems to be all out dated when it comes to this stuff, i looked a bit in to some of the stuff, but it is very intimidating especially when you dont know what to look for , some guidence here would be appreciated, im not even sure what i need there's charting , screeners, and brokrage firm ? naything else... a few things i have looked at ( mostly because they are free or easy to use or mentioned on this site are: MGB traing for leverage and buying and selling stocks. I have used trade-ideas (the only softwre i actually payed around with) I have a ninja trader icon on my desk top ? I imagine MGB trading (part of WTS??) will provide me charting, am i on the right track, is there other aspects im not thinking of like up to date news ? what should i get ? and how much will it cost ruffly? i know im its a bit early to start geting these things but would like to fill out forms and stuff to get teh wheels moving in oderto motivate me to stay focused, right now im a but all over the pace cause i feel like the above things will confuse me and take me a long time to know what to get and where to go, having that cleared up will keep me motivated thank you
Books: The first that come to mind that may be helpful. How to Make money in Stocks by William O'neil Market Wizards by jack Schwager (may not be specifically what you're looking for but has great insights) Charting try: freestockcharts.com and Telechart at worden.com . Allows you to set up your own scans. Lots of good info here on ET. Decide what time frame you want to trade then come up w/ a method that suits your beliefs and style. Hope this helps. Good luck.
thanks for the info, as for the site its a bit advanced for me and seems like alot of people that are in to trading are very good with computers, that is not the case for me so thats why i asked ill probably check out those books you mentioned, right now i'm reading market makers edge and high probability trading, both books are extremely similar, and they both seem very repetitive when it comes to risk management, for this reason i find it hard to read these books they both give the same basic info and are very repetitive, Ill have a look at the books you suggested once i'm done with these if they seem to be different ill defiantly get them , as for the free charts, wouldn't they be delayed if they are free?
wow thanks alot im so impressed when i saw the site free charts.com. I dont think ive seen a chart that is in candle stick format at default. it seems like its advanced but still easy to use thanks ill check the other site too
thanks to my fan i spent some of day watchin tv and freestockcharts i just decided to look at the % gainers on the left and pick 1 or 2 that i liked. not really usuing that much technic more jsut support and resistance and drawing triangles, bothe ended up kinda flat , seems stocks dont take the path of least resistance as often as one would think , I think a stock screener would be as important if not more important then on the spot TA. A screener can non emotionally pick out stocks, and is easy to test, as it will give you proabbaly alot of picks and you can see what percent of picks were in your favour, I used trade ideas, the (default screener) as the screener was picking stocks i woudl jot down the time and price, from there i watched the stock, usually by the end of the day it didnt show good numbers, by i kept my sheet and by friday i would recheck. On friday my stockswere all up maybe except one that was flat!!! i retested the next monday , and by friday again everything wAS positive. Is trade ideas good ? when i think about TA holding over night scares me. but when i look at what works its always holding for 3-10 days that seeems to work.
probably the problem with holding on for that time frame 3-10 days is that the stock fluctuates more and my stop loss would have to be lower then 2%. From my readings this is not a good thing.
ok so i continue my reading and as i do i feel like i need to take all the info and also incorporate my own styles and things to look for and decide what matters more to me and what doesn't . a friend of mine told me that his friend told him about a stock a few weeks or so ago. this stock was NIV. I pulled the stock out and decided to have a closer look as it had great gains since he mentioned it. so i just did what came natural to me and made most sense , i drew some trend lines, and i did notice that every time my trend line was broken and was tested it performed well ! I also found that by extending the diagonal trend lines it often made for resistance in other time frames where that trend line looks like it is not valid. all that aside im gonna try to attach a pic of NIV. that has my view of trend lines. i looked at the stock in 1year to 5 day views. im just wondering if my lines im seeing are right or way off, many times i see different lines then what is in the books, (maybe its the time frame) Are my lines right ? also i was wondering if I'm a genius, cause every time my lines are broken and tested the stock always preforms in the way of the trend, here is the part where i may be wrong, looking back it may be easy to see, when i look at most recent data i cant predict whats going to happen and would not be i the stock, im sure at any other point would know what to do but again its easy to say that when you can see what happened i have the adx and stochatics on the chart but i find that just looking at the trend lines seems to be 90% right (theres an area that looks like it breaks out that looks like an M near jan 18 that i can admit that my stop loss would of been triggered, but besides that everything looks good, maybe i should be trading without stop losses if these lines are so consistent,,, you be the judge, am i over looking something (like slippage)? is it just a luck? do my trend lines look normal would your be the same? or is my way of drawing so different and new that i should be a billionair in a month or 2 ?