Education and Market Wisdom

[IIC]

Bringing this forward for us newcomers to ask
questions and learn from all the smart ones.

OK guys...... let's hear your wisdom and tips.
Bring it on. We newcomers are ready!

Shadow

PS: Hope this helps Gerihearne.

I'm serious...Buy stocks that are gonna go up...Sell stocks that are gonna go down...You won't always be right...In fact you may only be right 35-40% of the time...Key is to GET THE HECK OUT when you are wrong..."Hope" should not be in your vocabulary...Doug(IIC)

[Shadow]

Thanks for the tips and advice guys.

I need to improve my charting capabilities
and I am investigating my options.
What do you use and / or recommend?

Thanks all
Shadow

[skiracer]

Thanks for the tips and advice guys.

I need to improve my charting capabilities
and I am investigating my options.
What do you use and / or recommend?

Thanks all
Shadow

I like Stockcharts the best. I have used TC2000 in the past but like Stockcharts over them. I think that Stockcharts has alot more available info for people new to technical analysis and charting. Not sure if you can get a 1 mo. free trial or not but the Extra package is only $29.95 a month and that encompasses everything they have to offer in the way of charting services.

[diogenes]

Great, it looks like this thread is one for questions.

Anyhow, suppose we wanted to design a mechanical trading system that would be profitable for periods of around 3 months.

Now, the question is, would it be best to backtest over 3 month intervals (which would appear to make the most sense), or over a much longer interval (in which case I would have to program in an automatic sell after a given time period).
Also, any great stories of system building would work, too.

[Shadow]

I like Stockcharts the best. I have used TC2000 in the past but like Stockcharts over them. I think that Stockcharts has alot more available info for people new to technical analysis and charting. Not sure if you can get a 1 mo. free trial or not but the Extra package is only $29.95 a month and that encompasses everything they have to offer in the way of charting services.

Thanks for your input Ski. I've used their site for free
but have not tried a membership.

My broker should be able to give me better charting
capabilities but we are going around about that.
Their upper level software availability hinges on $
and/ or # of trades. Since I'm not an excessive trader
I don't qualify; 30+ trades per month. I have
another account I'm getting ready to move and
trade with but I need to improve charting first.

So..... do other brokers not have great charting
since you use outside sources?

[skiracer]

Thanks for your input Ski. I've used their site for free
but have not tried a membership.

My broker should be able to give me better charting
capabilities but we are going around about that.
Their upper level software availability hinges on $
and/ or # of trades. Since I'm not an excessive trader
I don't qualify; 30+ trades per month. I have
another account I'm getting ready to move and
trade with but I need to improve charting first.

So..... do other brokers not have great charting
since you use outside sources?

I trade with Options Express and they offer everything but not anywhere as good as Stockcharts or TC2000. Brokers are for trading and Stockcharts is for charting. I know Ameritrade's upper level trading package offers pretty good charting but not anywhere as good as Stockcharts. You might as well get used to spending a few dollars a month to get a good package other than what your broker offers. You're supposed to be able to make it back in profit.

[scifos]

Okay, this question is for you technical analysis guys out there. Some people swear by Indicators or combinations of indicators (using convergence/divergence, overbought/oversold, etc etc ) while other people say its all in the price action and that no indicator works. My personal opinion is that since indicators are derived from price and/or volume they are just a particular way of looking at price action, and perhaps a combination of these different views DO help.

What is everyone else's opinion on this??

[skiracer]

Okay, this question is for you technical analysis guys out there. Some people swear by Indicators or combinations of indicators (using convergence/divergence, overbought/oversold, etc etc ) while other people say its all in the price action and that no indicator works. My personal opinion is that since indicators are derived from price and/or volume they are just a particular way of looking at price action, and perhaps a combination of these different views DO help.

What is everyone else's opinion on this??

You see how many guys are posting their thoughts on differents stocks and setups. They are all based on their favorite setups which come out of whatever indicators provide that information for them. Of all the hundreds of concepts, theories, indicators that are circulating around out there, there are going to be a few that seem to work best for you. When you find the ones that seem to work best for you those will be the ones that you'll use the most to find those setups you like. You can call them or name them whatever you want to but they are the things that you look for and feel most comfortable with. What brings them out or makes them show up is the result of thousands of traders/investors buying and selling stocks which equals volume to some small or large degree. The more volume in one direction or another is what moves the whole ball of wax.

[spikefader]

Indicators Schmindicators! hehe

But seriously, I like to use indicators, and would 'swear by them' cuz I see them work every day. But when they fail, ya gotta appreciate what that means, and apply some discretion. Sometimes a trend day will cause failure after failure of an indicator setup. At some point you've got to say to yourself, "this indicator is not helping to anticipate price action" and is costing me money. At that point it's time to step away from it and reflect what the market is trying to communicate to you. And if one is not careful, it's very easy to fall into the indicator trap.....attaching too much weight to it/them.

Indicators are simply a unique way of looking at price and volume data and refecting that information in a different way. They use math formula to filter or average what appears in price raw data, and then graphically represent that to the user. They can be predictive, and when they're on they have a potential to make a lot of money.....but they are a tool and not a rule.

I think one major problem I see with indicators is they don't reflect support and resistance in a chart, nor how the volume relates to those levels. And those 3 things are much of what speculation is about. When looking at a chart you must be able to identify the areas where the volume is, and where the potential lines in the sand are. Show me an indicator that can do that? I've yet to see one, and would LOVE to see one that can do that.

If one can integrate indicators into the bigger support/resistance/volume equation then one is on sound footing. Certainly sounder than if one relies simply on the indicator.

[Runner]

Okay, this question is for you technical analysis guys out there. Some people swear by Indicators or combinations of indicators (using convergence/divergence, overbought/oversold, etc etc ) while other people say its all in the price action and that no indicator works. My personal opinion is that since indicators are derived from price and/or volume they are just a particular way of looking at price action, and perhaps a combination of these different views DO help.

What is everyone else's opinion on this??

I’ve been looking at just price charts as of late with the sector overlay and that is it. I don’t even look at the volume anymore. I’m not even using candles as I think bar charts show better orderly pullbacks then candles. Only other indicator I’ll look at is ATR, but this is just for r/r ratio and sizing.

Amazing how the mind can pick up things from just a plain chart without 15 million oscillators moving all over the place. The more I’ve traded the less I feel volume is important. Now don’t take this wrong as the stock needs to have some volume to trade and I recently like >200 or 500K Now this sounds crazy, but you have no clue who is buying or selling anyway. Why is it that stocks that bring in some heavy upside volume implode over the next few days? How can this be as volume increases 500%? I think some serious games are being played and they know how to manipulate things even as huge as volume flowing in and out.. I even think those jokers now how to manipulate the candles you see on your screen by adjusting the volume. As always just my take on it and who knows maybe I’m missed something here.

[DSteckler]

<< The more I’ve traded the less I feel volume is important. >>

Price usually follows volume.

[skiracer]

<< The more I’ve traded the less I feel volume is important. >>

Price usually follows volume.

My sentiments exactly!

[scifos]

Thanks for the replys. I agree with what spike said about indicators being a different mathematial way of looking at price action, and that the don't incorporate everything you want to look at. And use them as a tool, not a rule.

Interesting, Runner, how the mind can pick out the important stuff without all the fancy filters/ossilators etc. Even w/o volume!

[skiracer]

Thanks for the replys. I agree with what spike said about indicators being a different mathematial way of looking at price action, and that the don't incorporate everything you want to look at. And use them as a tool, not a rule.

Interesting, Runner, how the mind can pick out the important stuff without all the fancy filters/ossilators etc. Even w/o volume!

Not for anything, an I respect Runner an everything he brings to this forum, but I couldn't be more in disagreement. Volume is the key an it's what drives price. Earnings, new product lines, or any other news worthy items may drive people to a stock but it's the flood of people into an issue, the volume coming in or going out, that drives price action. And you can call an indicator whatever you want to call it. Whether it's the RSI, On Balance Volume, A/D, stochastics, Chalkin Money Flow etc.... or any chart formation like Ascending, desending, symetrical triangles, all the Elliot Waves, Fib. lines, RAFF channels, etc.... They are all indicators an give an indication or signal that something may be happening or is going to happen. So the label is just a label but the true meaning is that whatever it is that you may be looking at or for is giving you an indication of something or for something. Unless you're buying long term and putting them in the safe deposit box and forgetting about them indicators, chart patterns, volume don't have that much bearing on your investing. But if you're trading short or intermediate term an looking for moves they are all significant to the outcome with volume being the main force to substantiate the moves. Of course anyone can do it anyway they want an if they are successful without using any type of indicators or following volume flows then all the more to them. But I would venture to say that if you were to question any professional trader about what drives price an their answer will be volume first.

[diogenes]

Interesting, Runner, how the mind can pick out the important stuff without all the fancy filters/ossilators etc. Even w/o volume!

I think the ability to see patterns that are not there goes way back to the "cave man days." As for volume, I would guess it means something if you want it to (and maybe it does anyway).