About getting started, about building a portfolio, and about timing

[pftrader]

Hi, I am interested in how one would go about getting started in following this nice method.

There are a few points I would like to understand/discuss:

1. How often are you doing the screening of stocks? Is it daily, weekly, monthly or is it not done regularly? If not regularly, what is the criteria for knowing when you would consider doing a screening?

2. If you do it regularly, and after each iteration you purchase the top pick, you are likely to be holding several positions at once. I have read that a number of 14 positions is something you would be holding as max no of positions.

What happens when you have 14 stocks in the portfolio, do you simply stop doing the screening for new stocks during this time?

3. What kind of market timing or entry timing do you use? Are you using technical indicators to know when to enter a position in the top pick?

4. Are you considering/waiting for favorable market condition before entering a position? I.e. would you enter trades in a down trend market? Are you using some tools for judging if market is bullish/bearish and taking that into consideration?

[skiracer]

Hi, I am interested in how one would go about getting started in following this nice method.

There are a few points I would like to understand/discuss:

1. How often are you doing the screening of stocks? Is it daily, weekly, monthly or is it not done regularly? If not regularly, what is the criteria for knowing when you would consider doing a screening?

2. If you do it regularly, and after each iteration you purchase the top pick, you are likely to be holding several positions at once. I have read that a number of 14 positions is something you would be holding as max no of positions.

What happens when you have 14 stocks in the portfolio, do you simply stop doing the screening for new stocks during this time?

3. What kind of market timing or entry timing do you use? Are you using technical indicators to know when to enter a position in the top pick?

4. Are you considering/waiting for favorable market condition before entering a position? I.e. would you enter trades in a down trend market? Are you using some tools for judging if market is bullish/bearish and taking that into consideration?

I think the first question would be "how much money will you be placing in that trading acct that will be available for use to take positions. So how much money first to be able to set up a strategy/plan.

[mrmarket]

Hi, I am interested in how one would go about getting started in following this nice method.

There are a few points I would like to understand/discuss:

1. How often are you doing the screening of stocks? Is it daily, weekly, monthly or is it not done regularly? If not regularly, what is the criteria for knowing when you would consider doing a screening?

2. If you do it regularly, and after each iteration you purchase the top pick, you are likely to be holding several positions at once. I have read that a number of 14 positions is something you would be holding as max no of positions.

What happens when you have 14 stocks in the portfolio, do you simply stop doing the screening for new stocks during this time?

3. What kind of market timing or entry timing do you use? Are you using technical indicators to know when to enter a position in the top pick?

4. Are you considering/waiting for favorable market condition before entering a position? I.e. would you enter trades in a down trend market? Are you using some tools for judging if market is bullish/bearish and taking that into consideration?

Good questions all...

1. I screen stocks regularly. However the market needs to be conducive to making a purchase (it isn't right now). Typically my screens will yield a total of well over 200 stocks. If I ran it today, the screen spits out fewer than 40. I'd rather wait it out.

2. I don't think I've ever had 14 positions for a very long time. Usually if the market is moving favorably, you're churning the portfolio rather quickly.

3. I don't use market timing. Once I like a stock, I buy it because its fundamentals are usually such that it most likely outperform the market. If the market is positive, you have a winner regardless of market timing for entry.

4. See answer to #1. The fact that the screens aren't producing a high volume of stocks indicates that it's not a good time for me to be buying using this method. Having said that, there are a great number of high dividend paying stocks which are lush with earnings. I would invest in those companies while waiting for momentum to return. That's what I'm doing now. I don't list these stocks on this forum because it's not really relevant to the strategies being discussed here, for the most part.

Hope that helps...Good luck!

[skiracer]

Good questions all...

1. I screen stocks regularly. However the market needs to be conducive to making a purchase (it isn't right now). Typically my screens will yield a total of well over 200 stocks. If I ran it today, the screen spits out fewer than 40. I'd rather wait it out.

2. I don't think I've ever had 14 positions for a very long time. Usually if the market is moving favorably, you're churning the portfolio rather quickly.

3. I don't use market timing. Once I like a stock, I buy it because its fundamentals are usually such that it most likely outperform the market. If the market is positive, you have a winner regardless of market timing for entry.

4. See answer to #1. The fact that the screens aren't producing a high volume of stocks indicates that it's not a good time for me to be buying using this method. Having said that, there are a great number of high dividend paying stocks which are lush with earnings. I would invest in those companies while waiting for momentum to return. That's what I'm doing now. I don't list these stocks on this forum because it's not really relevant to the strategies being discussed here, for the most part.

Hope that helps...Good luck!

It's such a complicated issue to understand exactly what you want to accompolish and how you want to go about doing it. Plus you can trade or invest in a number of different ways either for the short term to build and acquire capital or for the longer term for retirement. I would like to see him give us more about himself and what he wants to do with what he's got to invest.

[pftrader]

I think the first question would be "how much money will you be placing in that trading acct that will be available for use to take positions. So how much money first to be able to set up a strategy/plan.

It's such a complicated issue to understand exactly what you want to accompolish and how you want to go about doing it. Plus you can trade or invest in a number of different ways either for the short term to build and acquire capital or for the longer term for retirement. I would like to see him give us more about himself and what he wants to do with what he's got to invest.

Thanks for your answer and willingness to help.

For these positions I have a small account with buying power of about 15000.

The financial target is definitely to build and acquire capital. Another big target is to learn to master a method of investing that I can utilize the rest of my life.

[pftrader]

Good questions all...

1. I screen stocks regularly. However the market needs to be conducive to making a purchase (it isn't right now). Typically my screens will yield a total of well over 200 stocks. If I ran it today, the screen spits out fewer than 40. I'd rather wait it out.

2. I don't think I've ever had 14 positions for a very long time. Usually if the market is moving favorably, you're churning the portfolio rather quickly.

3. I don't use market timing. Once I like a stock, I buy it because its fundamentals are usually such that it most likely outperform the market. If the market is positive, you have a winner regardless of market timing for entry.

4. See answer to #1. The fact that the screens aren't producing a high volume of stocks indicates that it's not a good time for me to be buying using this method. Having said that, there are a great number of high dividend paying stocks which are lush with earnings. I would invest in those companies while waiting for momentum to return. That's what I'm doing now. I don't list these stocks on this forum because it's not really relevant to the strategies being discussed here, for the most part.

Hope that helps...Good luck!

Thanks, I appreciate your help.

Can you elaborate on doing the scans regularly - is that like weekly or more/less frequently? What about during bull markets, do you scan more frequently, or always with same interval? Or just when it feels right?

So in a sense you are using the number of stocks that are found in your scan as a gauge of when to invest. That is interesting. It requires a bit of personal judgement to know what is "enough" or "not enough".

[mrmarket]

Thanks, I appreciate your help.

Can you elaborate on doing the scans regularly - is that like weekly or more/less frequently? What about during bull markets, do you scan more frequently, or always with same interval? Or just when it feels right?

So in a sense you are using the number of stocks that are found in your scan as a gauge of when to invest. That is interesting. It requires a bit of personal judgement to know what is "enough" or "not enough".

As frequently as daily or weekly. It only takes a couple of minutes to run the screens. When I'm in a buying mode, I run the screen as frequently as I need to in order to fill my portfolio.

Sorry I can't give you a more quantitative answer...the best thing I can tell you is if you stick around you'll get an understanding very quickly of how I go about investing with this method.

[skiracer]

Thanks for your answer and willingness to help.

For these positions I have a small account with buying power of about 15000.

The financial target is definitely to build and acquire capital. Another big target is to learn to master a method of investing that I can utilize the rest of my life.

My next question would be what experience do you have with investing in stocks. Do you have any experience with the technical aspects of reading and analyzing charts. What knowledge do you have with the fundamental side of what is going on with a company. Do you have any experience with interpreting the financial aspects of a companies balance sheets or other financial statements. Are you looking to buy and hold or to trade more frequently. If your answer to any of these questions is no then you should start by picking up several books on understanding the technical aspects of charts. A good one is Bulkowski's Technical Analysis of Charts. That will get you started with learning the technical side of interpreting charts. On the fundamental side you have to understand how to interpret the fundamentals regarding a stocks financials and what they mean is key to what to expect from a stock. Develop a sound basic understanding of these two areas first. Maybe do some paper trading using both methods before you put your money on the line. experimenting with paper trading wont get you hurt and will build on a base to pryamid off as you try to come to a decision as to how you want to trade and what best suits your personality and pocketbook.

[riverbabe]

If your answer to any of these questions is no then you should start by picking up several books on understanding the technical aspects of charts. A good one is Bulkowski's Technical Analysis of Charts. That will get you started with learning the technical side of interpreting charts.

There are much easier ways to educate a beginner in technical analysis. Wow, IMHO the best way to scare the sh** out of anyone beginning TA is Bulkowski. Try Toni Turner (Beginner's Guide to Short Term Trading -- free on Kindle);and Nison's Candlestick Course (anywhere you can find it the cheapest) and anything on Elliott Waves by Robert Prechter.

[skiracer]

There are much easier ways to educate a beginner in technical analysis. Wow, IMHO the best way to scare the sh** out of anyone beginning TA is Bulkowski. Try Toni Turner (Beginner's Guide to Short Term Trading -- free on Kindle);and Nison's Candlestick Course (anywhere you can find it the cheapest) and anything on Elliott Waves by Robert Prechter.

yes it is always better to start off slow and build up to it.

[IIC]

I run technical scans all the time...If I'm available to trade during the day I'm running intraday technical scans several times per hour...However, if you are more of a fundamentalist you can probably run scans every few days or so...maybe longer as the fundies don't change that fast...except during earnings season...Best, Doug

[pftrader]

My next question would be what experience do you have with investing in stocks. Do you have any experience with the technical aspects of reading and analyzing charts. What knowledge do you have with the fundamental side of what is going on with a company. Do you have any experience with interpreting the financial aspects of a companies balance sheets or other financial statements. Are you looking to buy and hold or to trade more frequently. If your answer to any of these questions is no then you should start by picking up several books on understanding the technical aspects of charts. A good one is Bulkowski's Technical Analysis of Charts. That will get you started with learning the technical side of interpreting charts. On the fundamental side you have to understand how to interpret the fundamentals regarding a stocks financials and what they mean is key to what to expect from a stock. Develop a sound basic understanding of these two areas first. Maybe do some paper trading using both methods before you put your money on the line. experimenting with paper trading wont get you hurt and will build on a base to pryamid off as you try to come to a decision as to how you want to trade and what best suits your personality and pocketbook.

I have about 10 years experience in speculation based on technical analysis.

[pftrader]

As frequently as daily or weekly. It only takes a couple of minutes to run the screens. When I'm in a buying mode, I run the screen as frequently as I need to in order to fill my portfolio.

Sorry I can't give you a more quantitative answer...the best thing I can tell you is if you stick around you'll get an understanding very quickly of how I go about investing with this method.

OK thanks, I appreciate the answers.

[skiracer]

I have about 10 years experience in speculation based on technical analysis.

then you should have a solid base of knowledge to build off for trading short term. I would think with 10 years experience your mind would be made up as to what type of trading is best suited for you. by this time you should have a plan in place that addresses finding good stock plays/scans, timing/entrys, entry, stops, target/exit, math expectancy/risk vs reward, and money management. these are what you need in place if you want to be successful making short term trades.
if you are interested in building a retirement portfolio then its a different situation.

[pftrader]

then you should have a solid base of knowledge to build off for trading short term. I would think with 10 years experience your mind would be made up as to what type of trading is best suited for you. by this time you should have a plan in place that addresses finding good stock plays/scans, timing/entrys, entry, stops, target/exit, math expectancy/risk vs reward, and money management. these are what you need in place if you want to be successful making short term trades.
if you are interested in building a retirement portfolio then its a different situation.

What you consider short term trades are something I would consider long term trades, if we are talking about the weeks/months the Mr. Market positions are held. I have day traded commodities and FX and day traded stocks. I consider myself having enough knowledge of timing/entrys, entry, stops, target/exit, math expectancy/risk vs reward, and money management for discussing trading on this discussion board.

Now I am interested in the Mr. Market methodology and it is much different from what I know so my background is not of that great importance in my opinion.

I have never used fundamental analysis of stocks or scanned for fundamentally sound stocks and invested in them or invested in a portfolio of stocks. That is why I am here and humbly educating myself with the kind help I can get from persons experienced in the method and who want to help me.

You see, I am interested in the method Mr. Market utilizes and that is why I asked some questions in the first post of this thread.