Swing trading Mr.Market's latest Top Five Picks

[dmk112]

Spike,

Another Q, I'm really getting interested with this Fib stuff!!

Take a look at TOPT, was it a buy when it hit the 62.8 retrace?

[spikefader]

Greetings Spike,
I look forward to your post daily.
........turtletraders site they do not reccomend buying dips,such as fib retraces,as they feel a drop of 50% warrants possible change in trend....the more I read, the less I feel I can make a decent return in the market. After reading the Zerosum article,it appears the market will eventually take away profits if trading is continued,unless you have a distiguisable edge from the masses.

In your opinion,someone like myself,with limited chart abilities,quick trigger buys and sells ,with poor timing,and a fear of losing capital,am I in the wrong gameIYO?

If you were to pick an investment that required little maintenance,without the emotional highs and lows that are involved in trading stocks,what would be your preference?

I find myself restless from the fear of taking a position,to the fear of that position falling,thinking its not alotof fun watching the market constantly,with absolutely zero control over price action.

In short ,what are thet odds of someone beating the market?

cordially Tom

Hey Thomrich. Thanks. They don't recommend buying dips? Well, what can I say about that one?

Generally speaking, I think dip buying is a good thing and an edge to be exploited. But I don't think that for every stock, and I need to clarify that statement. Leaving the Mr.Market 50% system aside for a minute (since that is a very unique system, dependant wholly on Mr. Market's model and therefore not indicative of general dip or 50% retrace buying), let's just think about dips and where they fit into a change in trend. If a dip is to a channel, or other point of great support, then it's a great time to buy. But if a dip breaks a channel or price support then it's a bad time to buy. This is why it's so important to know where your stock fits into its larger trend. A channel is one way to measure a trend, and I use them, and they work for me. There are other trend defining indicators out there, and I'm sure if used wisely they work too. The secret isn't a magic indicator, but rather how you use those indicators relative to your routine/system/practice, in addition to your risk reward and diversification strategy.

I've not read much of TT stuff, but if it's hurting your psyche and confidence, then perhaps it would be wise to quit reading it ~jk~ seriously though, whatever is happening, it might not be a bad thing. Sometimes things have to get worse before they can get better. Perhaps the foundations have to be demolished and replaced with bigger more reliable ones. I think as long as those foundations contain the principles of diversification and/or sensible risk and money management and logical targeting rules then they are good ones. As far as indicators, methods of timing and triggering go, it matters less of what those methods actually are, and more of whether they fit your personality and style to the point of feeling/seeing/accounting for a positive potential. If something has potential, then combining that potential with a disciplined strategy (that embraces the foundations I mentioned above) is the precursor or catalyst to not only identifying potentially wonderful trades, but also handing you a mathematically definable method of timing your entry to make the most of the potential you see. Something might have great fundamental potential at any general point in time, but market forces and technicals are such that actually nailing a well-timed entry is near impossible. And further, if it wasn't for your protective risk/money management, you'd be forever stopping out, or consistently become a bag holder. You see, the edge we all seek doesn't take the form of a single fantastic indicator or screening tool, or combination of them, but it DOES take the form of absolute control over the things we CAN control within ourselves, within limits we define, accepting that it is always speculation, with no guarantees, no safety nets but for the ones we set for ourselves. The market is brutal, can destroy portfolios, and it will ALWAYS be so. How can we ever feel confident that a bull market is going to save our butts? If anything taught us this lesson, 9/11 did. Life is so fragile, and so unpredictable, and wonderfully spontaneous, and terrifyingly vulnerable that I'm tempted to say that if we all had our heads screwed on right we'd never have the courage to speculate in the market at all But I'm an optimist by nature and believe the glass is half full. I have faith that, among other things, there is light after darkness. I believe in my potential to do smart things and the certainty of blessings. I like a challenge. I believe in the market. I believe in me. For these reasons, I think I'll always be a speculator and buy into weakness at smart points.

To answer your question, are you in the wrong game? I don't think you're in the wrong game, as long as you know the rules of the game, remember that there is a loser in the game, that the big fish eat little fish, and if you're going to be a little fish, then you've got to learn how to and when to move out of the way of the jagged teeth and deep bellies, or if you don't move, that like a chess game, a pawn can be sacrificed without hurting your chances of reaching checkmate in your favor. ELN was a big fat dangerous short shark. I saw the short potential in the chart, but didn't get the timing right, and thankfully my methods kept me away from shark feeding time completely. Was that luck? Maybe. Did if have something to do with my 'system'? I'm very confident it did. Will I always be so lucky? God knows. But the way I trade, being fussy and looking for perfect entries, I'm fairly certain that I'm avoiding sharks as much as I possibly can. I think this is an additional edge. King was very unfortunate on ELN and took a hit. I pray he doesn't suffer over ELN any further. I pray his emotions are not ruling his decisions, for I know with certainty and from experience, the destination of that path. Hindsight is 20/20, but I like my foresight to be as close to 20/20 as possible. I am very picky and very cautious. I always remember now that downside potential is ever present. One must protect against this as best he/she can. Nope, won't always do this correctly, but at least it's a top priority, and that fact alone will avoid most dark caves where predators hunt.

Back to your question: with limited charting abilities, quick trigger, poor timing, fear, yes, in the wrong game. BUT - if you know these are your limitations and have the ability to change yourself and OVERCOME them, then it's the right game. Success is absolutely possible, but like most things in life, it's obtained less by changing your environment or controlling those around you, and more by searching within for faults and limitations, and really changing yourself to control your weaknesses. It's much like the game of golf, really. If you let your emotions rule your game, you will take big risks and go for low percentage shots for the glory of ego, reckless of the odds against you, you'll swing fast and hard, beyond your physical limits of balance and control, cuss in anger when you fail, and scream in self-indulgent glee, riding the dragon and loving it. Where does it get you after 18 holes? The bottom of the leader board usually. It's the player who can play low risk, high percentage shots, not going for glory shots, taking medicine and hitting sideways from rough to fairway, swinging well within himself/herself, controlling rhythm, tempo, negative thoughts, susceptibility to distractions, who is the one that at the 18th hole is likely to be the winner. It's got nothing to do with your opponent or environment, and EVERYTHING to do with yourself.

Anyway, I'm raving again, but thanks for the post that has prompted these thoughts. I really feel they are close to truth and helpful to others. I say this with humility and generosity, and hope others get something out of them.

To finish off and quickly respond to you other questions: a low maintenance investment with low emotional ride, sheesh, I guess low return guaranteed vehicles, but truly, you're asking the wrong person. Anyone else?

The odds of beating the market? LOL I guess measured in the universe of all market participants, pretty slim long odds. Measured in a smaller 'world' that takes the form of helpful forums like this one, pretty good odds.

Later!

[jiesen]

wow, Spike, what a fine post!

I always love reading what you have to say, but this was exceptional.

[skiracer]

I have to agree that this is one of the best and most sincere posts I have read. Also the truth in every aspect. Well put.

[billyjoe]

Spike,

Last week the charts of many of the stocks on my watchlist look as though they fell off a cliff. These stocks have been doing decently for at least 8 weeks . It's very noticeable when going through the charts quickly , the same pattern again and again. If the market rallies there must be many 50% retrace candidates now.

billyjoe

[New-born baby]

Post 'em

Spike,

Last week the charts of many of the stocks on my watchlist look as though they fell off a cliff. These stocks have been doing decently for at least 8 weeks . It's very noticeable when going through the charts quickly , the same pattern again and again. If the market rallies there must be many 50% retrace candidates now.

billyjoe

BillyJoe,

Why not post the list here? Or throw them on "Hot Pick of the Week" and we'll TA them over there. "Share the gravy."

[New-born baby]

Tomrich beats the market

Tom,

I am responding to your question to Spike about beating the market: what's the odds? Biblically speaking, God tells you to invest, diversify 7 or 8 ways, and that it will be profitable. God doesn't guarantee that every investment will pay off. He does say that investing, in the long run ("after many days") does pay off. Read Ecclesiastes 11:1-6. [Be careful about getting me going: I have a whole sermon on this text!].

I wouldn't read that TT stuff if it is full of negativity. The truth is that the market HAS paid off--even in the 1920's,1930's, and the worst decade of them all that no one speaks about as being bad: the 1970's. Yup, the 1970's was the worst of 'em all.

95% of all investors are losers because they don't study. The market is work. But I do love it. It beats digging ditches for a living.

Best to you all,

[Thomrich]

Greetings,
Thanks for the reply Spike,and NBB,

I got rattled after seeing ELN,and reading on TTs site while awaiting new brokerage.

It was kind of nice to be on the sidelines,it gave me a different perspective.I did some research on other investments,and the old rule still applies,The less risk the less reward.

cordially Tom

[skiracer]

Won't try to talk you out of that concept but can't say I agree with you on it. Managed risk vs reward is just as profitable depending on the stocks price, and how many shares you have. Of course a lower priced stock can double easier that a much higher priced one but points are gains regardless an a planned and timed entry with low risk vs high reward is much better imo.

[spikefader]

Spike,
Another Q, I'm really getting interested with this Fib stuff!!
Take a look at TOPT, was it a buy when it hit the 62.8 retrace?

Apparently it was

Just for the record, this thread and the Mr.Market Top 5 Fib retrace system is a very unique system. I can't speak for actual results using the 62.8 Fib retrace alone for entries. I haven't done testing on it. Maybe others have. But it IS a level of support, and I would consider it in the bigger picture of potenial movment.

The 50% retrace method in this thread seemed like a 'bright' idea when I was contemplating entry triggers. Call it dumb luck or stroke of genius, but it's working with the Mr. Market current Top 5 - touch wood.

The 62.8 retrace on TOPT was from a signicicant low to high, so it's likely to offer great support. As to how long that remains so, now that's the $64,000 question.

[Thomrich]

Won't try to talk you out of that concept but can't say I agree with you on it. Managed risk vs reward is just as profitable depending on the stocks price, and how many shares you have. Of course a lower priced stock can double easier that a much higher priced one but points are gains regardless an a planned and timed entry with low risk vs high reward is much better imo.

Greetings,
I was referring to low risk investments like treasuries,as compared with traded shares of anything.

I saw a rep from Elliotwave international recently,and he still is touting short term 90 day treasuries right now.

they must see a correction coming I assume.

cordially Tom

[Thomrich]

Greetings ,
Excellent read on FRO Spike,very happy for you,are you targeting recent top of around 50?

cordially Tom

[spikefader]

Greetings ,
Excellent read on FRO Spike,very happy for you,are you targeting recent top of around 50?

cordially Tom

Thanks!! Excellent would have been getting the perfect entry. But patience is beginning to reward now (whew), and with the bullish channel break now, I will target the upper weekly channel, currently at 65.00.

[spikefader]

update:
re CWTR long here http://www.mrmarketishuge.com/forum/...&postcount=211
There was 3 for 2 stock split a couple days back. Recalculating entry and target based on this: long price is 29.62/3x2=19.75. Target is 19.75x1.15=22.71.

OPEN TRADES UPDATE:
NGPS at 33.49 retarget 33.85. Looking pathetic.
FRD long 12.50, targeting 12.13. Silly stock.
IIG Long 18.14, retarget 16.10 (the system's worst performer to date). Double bottom on daily and intraday ascending triangle breakout yesterday. Target possible.
ARLP long 73.37. Target is 84.38. Working nicely.
CWTR long 19.75 (29.62 pre split). Target is 22.71 (34.06 pre split). Hanging in there.

[spikefader]

[QUOTE=spikefader]
Checking FIBS and latest 50% retrace signals for open positions here are some changes to targets and eventual profit loss for each position assuming they are met:

ARLP - retarget to 77.75 or 5.97% profit.
NGPS - retarget to 29.97 or -10.5% loss
FRD - retaget to 10.79 or -13.68% loss
IIG - retarget to 15.64 or -13.78% loss
CWTR - retarget to 20.05 or 1.53% profit

Assuming these targets are all met, system total will be 78.54% in 18 trades. Average will be 4.36% per trade. These retargets have put a dent in the average profit of 8+% per trade, but thems the breaks. It will take a string of say five or six winners to put that average back over 8%.

Speaking of winners, the Spring Break Top 5 came out on Friday. You guys didn't even remind me. Is anybody even reading this thread?! OK, I'll look at them in the next post.