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rich, do you think AREE may be at its low or can anybody else show a chart that might give a clue. i'm very interested at this level.
cheers. serpico
do you daytrade xray and do you use that macd indicator vendit talks about. is there other options that you know of, that maybe are easier to follow for daytrades?
cheers. serpico
xxrayeyes, thanks will check it out, Rich
Rich- Lower highs and higher lows. That's a wedge in a nutshell. Here's a link to check out.
Wedges Formation
http://chartpattern.com/wedges.html
And a compiled list of T/A Info.
Technical Analysis Education
http://www.investorshub.com/boards/read_msg.asp?message_id=115339
Hi Reid, The stock I mentioned yesterday AREE that I bought but except what seems promising of what I read about it, also seems to have not much hope in trading, no real technical value concerning charting. Doesn't look very good that way. Any Comments, Rich
http://www.askresearch.com/cgi-bin/intraday?index=%24COMP&intraday=symbol&symbol=aree&ex...
Hello, Sounds interesting but I'm not sure what this means ?
Could you tell me in simpliar terms? Thanks Rich
. When you have a wedge form, it usually trades with declining volitility to the apex.
Thanks sir.
My intention is not to set the purpose of this thread in stone but just allow it to evolve into what the posters want. I have kind of shunned away from posting about small caps and pennies up until now for various reasons but honestly do have extensive experience with both of these types of stocks.
We can do it all on this thread so if anyone has a large cap or a penny that looks like a good candidate for a technical trade then let's talk about it.
A board is only as good as it's content. So far I like what I see here. I wonder what muelhead is going to think about it!
<gg>
Reid
Re: a good trader never stops learning.........
I agree with that 100%.
I posted this on another thread here in March and on SI about a year ago. See #11.
Ten Laws of Technical Trading:
http://www.stockcharts.com/education/MurphysLaws.html#spot
Ask Research charting tool:
http://www.askresearch.com/cgi-bin/chart
1. Map the Trends
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale "map of the market" provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes -- long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.
3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old "high" becomes the new "low." In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies -- the old "low" can become the new "high."
Support:
http://www.stockcharts.com/education/glossary/support.html
Resistance:
http://www.stockcharts.com/education/glossary/resistance.html
4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
Draw trend lines:
http://www.stockcharts.com/education/trendlines101.html
6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
Moving averages:
http://www.stockcharts.com/education/glossary/movingAverage.html
7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.
Ocillators:
http://www.stockcharts.com/education/indicators3.html
Relative strength index (RSI):
http://www.stockcharts.com/education/glossary/RSI.html
Stochastics:
http://www.stockcharts.com/education/MurphysLaws.html#stochastics
8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a "histogram" because vertical bars are used to show the difference between the two lines on the chart.
MACD:
http://www.stockcharts.com/education/glossary/MACD.html
MACD histogram:
http://www.stockcharts.com/education/indic_MACD4.html#histogram
9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
Volume:
http://www.stockcharts.com/education/glossary/volume.html
10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
"11."
Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
From SI:
http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=13235149
Reid
Reid, sounds like you're having fun with AOL - wtg! I'll check back in on that trendline you're referring to. I have a really good feeling about this thread you started Reid - Josh (xxray) says it best - the learning never ends:)
Arch
Vendit- Thanks for the welcome and the compliment. I have a lot more to learn as far as T/A is concerned. It is my firm belief that a good trader never stops learning. If you meet someone who claims to know it all, most likely their bluster is a weak attempt to hide their inadequacies. I will never claim to know it all, but I do know a little and will be more than happy to share with everyone.
xray
Welcome to this board. FYI, I have read several of your posts on IHUB over the past few weeks and you seem to be a very talented technician. Looking forward to yours and others input.
Reid
AOL typically moves a greater % up and down during a complete price cycle. I follow it fairly close and have for years. A $20 move up and down is about the norm of late.
Draw a lower trend line under the last two lows in the past 6 months, Jan 2nd and in April. That line will extend off the chart in the mid to upper $30s. There is also an unfilled price gat at the beginning of April, which is at he $36 level worth noting.
http://www.askresearch.com/cgi-bin/chart?symbol=AOL&exchange=USA&size=640x480&months=6+m...
Your short-term entry and exit looks possible looking at intra-day time frames. These signals work equally as well in any time frame. AOL is very technically reliable and is why I like it.
Reid
Josh's 3/5 day time horizon chart example (thx Josh)
post # 800
http://www.investorshub.com/boards/board.asp?board_id=574
Arch
The chart I just posted on my board is a perfect example. When you have a wedge form, it usually trades with declining volitility to the apex, then breaks one way or the other. The first day it closes above the overhead down trend line is the day to invest. Then wait 3-5 days for the subsiquent price action. Also, most candlestick charts have a forecasting ability of a maximum 5 days.
Josh, can you post a chart here depicting this 3-5 day time horizon as an example - that would be super!
Arch
Arch- Trades on the OTC are better if you have a 3-5 day time horizon.
A toast and a little PR!
http://www.investorshub.com/boards/read_msg.asp?message_id=115173
Arch
Reid, on the AOL chart you posted, I was able to draw a straight line up from the black STOC rising (thru green) and the black line falling (thru green) and come up with a short term trade of: entry $50/flip $55.
good rule of thumb: A bullish signal occurs when the (Black-%K) rises through the (Green-%D) when it is below 20. A bearish signal occurs when the (Black-%K) goes under the (Green-%D) above 80.
Arch
Good point! Volume "is" key. A good trading stock has to trade at least 1mm shares per day to give it enough daily volatility.
Reid
using Stochastic as a entry and exit tool.
The optimal entry is under 20 and get ready to book profits over 80 using the scale found to the right on the stochastic indicator. I never buy a positive cross over above the 80 break out or not. The most successful entries are made below 20 to 30.
The Stochastic is a momentum oscillator developed by Dr. George Lane. The premise behind the Stochastic indicator is that when a stock is rising it tends to close near the high and a falling stock closes near it's low and this is plotted as two lines, the fast stochastic (Black-%K) and slow stochastic (Green-%D).
A bullish signal occurs when the (Black-%K) rises through the (Green-%D) when it is below 20. A bearish signal occurs when the (Black-%K) goes under the (Green-%D) above 80. Dr. Lane believes the most important signal occurs when the (Green-%D) and stock price diverge. This is often seen when a stock makes a new high and the (Green-%D) clearly fails to reach or better it's old high. Conversely, a stock is oversold and ready to reverse when it makes a new low but the (Green-%D) fails to confirm that low.
Compare the two stochastic lines (cross-overs above under 20 and over 80) to AOL's price action.
http://www.askresearch.com/cgi-bin/chart?symbol=aol&exchange=USA&size=640x480&months=6+m...
Reid
Rich, take a look at this set-up for an intraday, and look over the MACD & STOC, the ups and downs, obviously you'd buy on the MACD low (.08, if lucky) and sell on the MACD high (.095, even luckier). Hard to flip this one with this tight a spread and volume relatively low!
http://www.askresearch.com/cgi-bin/intraday?index=%24COMP&intraday=symbol&symbol=IDNW&ex...
Arch
Hi Reid, checked the boxes to the right and the chart has it now. STILL Greek to me, HELP and take it slow please. Rich
Not hard.........Look at this>>
X........if you can understand that the lines which make "an" "X" have an intersecting "point".....you will love TA!
X is two lines placed at different angles "for a reason" which has a point of intersection or (X) cross-over.
That point of intersection "is the buy or sell" signal.(X)
Reid
Reid, It's greek to me. I see nothing of MACD or stochastic? Where is it? Rich
Perhaps you could give Rich an example of a timed exit/entry on say: IDNW.
Intra-day timing, day trading.....MACD is king, stochastic is important as a confirming indicator.
http://www.askresearch.com/cgi-bin/intraday?index=%24COMP&intraday=symbol&symbol=IDNW&ex....
Can you or Rich pick out the buy and sell timing based on MY above chart? I can and it is very easy to do.
Reid
Archangel, Appreciate that. I need to learn how to hold a core position and trade part of it for profit and also accumulate more shares. Not quite sure how to do this though.
Vendit, what are your thoughts also. Can AREE be TA'd ? Would bring up your chart you use on your other site but it does't to really show anything to me. Would you or Archangel use those paremeters? Rich
Rich, hang in there with AREE, I'll start watching it at this level also. A quick peek at their latest filing indicates an inbalance of about 600% between assets and liabilities. That makes me a little uncomfortable, but I know AREE can move on news/shareholder sentiment, vice TA. I may start to nibble, regardless, at .003-. Good luck Rich!
http://www.edgarpro.com/edgar_conv_html%5C2001%5C05%5C22%5C0001079974-01-500097.html#FIS_BALANCE_SHE...
Arch
You will find a good trading education on that web page.
The reason most people lose money in the market is because of the fact they have not learned how to trade and/or they have not proved on paper that their ideas are profitable by testing them rigorously. Even if they know how to trade, they will not be around the market for very long unless they know the rules of professional risk and money management and their proper application. Basically, most traders begin their trading career very undercapitalized and they bet far too large an amount for their account size.
I had to learn how to mix TA, DD and BS and come to my own conclusion. I think this is called a learning curve.
IMO the only traders who survived the last crash (nasdaq).com were technicians. A technician wrote this>>>>>>>
http://204.244.168.151/education/Risk_Management.cfm
JMO
Reid
Archangel, thanks for the link, Rich
Hi Archangle, I have some AREE which seemed SO promising, but I am not doing well with it at all. Rich
Rich, here's the link, hope you enjoy!
http://www.investorshub.com/boards/board.asp?board_id=307
Arch
Hi Rich, Reid's a great educator, and on Archie's Corner, we have always enjoyed his analysis. We pinch it from his AskV thread at iHub. Mostly a penny player myself, and we got a runner on the Corner--->QBID, from .003 to Friday's close of .03. Much more upside coming this week. Keep an eye on it. Welcome to this Toast Board!
Arch
Archangel, Appreciate your input also. Rich
Reid , Link doesn't work , I will try again. Rich
http://204.244.168.151/education/Risk_Management.cfm
Good evening Reid, glad you decided on Muel and me as directors. We'll try not to do you a disservice...lol. Perhaps you could give Rich an example of a timed exit/entry on say: IDNW. But I plan on holding this for awhile, even if you determine I should exit, and pronto...lol.
p.s Muel will probably check in after the holiday weekend - indisposed lakeside I understand!
Arch
Reid, I sure hope I can learn to do that. By the way Money Management is also where I fail. Don't really have a feel for it. The following sure sounds familiar to me. Rich
http://204.244.168.151/education/Risk_Management.cfm
I have found that TA tools allow me to undermine the driving force of a stock by seeing this momentum shift prior to the mms or promoters seeing it in many cases.
If one wanted to argue that they could trade circles around me in a stock, which trades 30k daily while they shaved a penny per trade, I would take exception to that.
I can see the short-term trend, which are a few days. They will spend more on commissions day-flipping and I would make more holding a trend for a few days, one entry, and one exit.
Volume and momentum is key.
JMO
Reid
Reid, Mostly watching Message boards. My biggest problem is chasing them at times, or after making a good profit, letting it ride (greedy) and actually ending up with a loss at times. Got to stop doing that. No TA really that's probably really a big mistake.
What do you use as a means to measure your entries and exits?
I ask you this because I was using message boards and stock tip sites to get my trading ideas, early on. Entry and exits were from my own comfort view point, and my own decision. I lost some, made some but figured that there had to be a better method to stay on top.
Reid
Reid, I have a few pretty good winners, but seem to give it back sooner or latter. I know I am doing something wrong, but each time I (Think) I have figured it out I goof again. One thing I can say though about myself. I DON"T give up. One day it's going to work out. Rich
Rich
I started out in the 1980's with some long term buy and hold solid investments which I still hold today and don't trade my LTBH shares but will from time to time flip a few additional shares if timing looks good.
The interesting thing is that I didn’t really start trading until the mid 1990's. I used a tax refund ($800-$900) which I invested in a few biotech stocks when they were under $1.50.
TGEN= in at $1 1/4.....out at about $4 1/2 a few weeks later.
Yep.......I was hooked too.<g>
The following year I put another refund 100% in LU just after IPO. Held that for 4 to 5 years (memory here).....sold $3 off it's all time high, several splits along the way. My buy and my sell were just dumb luck. My % of return has also been just dumb luck.
If I were a mule you could safely say that I was and am a
Dumb ass. No offense intended to muelhead.
g
Reid
Posted by: Rich
In reply to: Vendit who wrote msg# 3721 Date: 5/26/2001 6:58:09 PM (ET)
Post # of 3722
Reid, Well I for one am glad you have the time to deal with us small investors. The reason I like the bb's is it is risky but since we are able to purchase more shares the math makes it very profitable or (loss) quickly. I just can't buy a lot of stock like WCOM yet. Hoping bb's will change that so I will have the money to put into safer heaven. Rich
Reid
In smaller regional firms, there are mainly three types of broker. The first is the new hybrid asset-gatherer who gives us the spin about using speculative stocks to improve our returns on our bond and mutual funds, but ends up selling us only the stocks on the recommended list because they don't know any better. They don't know that the some of the gems on the recommended list are stocks that the top management might own big cheap positions. We can do without these salesmen who don't know how the game is played. The second type is the broker who does deals, the so-called entrepreneurial broker, one who is very close to corporate insiders. This type of broker is helpful to us because if the insiders that he is close to have a track record of success, we will be amongst the first to know of a good deal. We only need to make sure that our broker follows our orders when we say the word "sell" if a stop loss is hit. The broker has potential conflicts of interest here but we believe that the trade-off is worth it. The third type is the information gatherer. This could be someone who has worked in the field, knows some geology, etc. This type of broker knows everybody on the street and he is our friend because without proper information, we cannot analyze the deal properly. We have our ear to the ground via our broker. It doesn't take long to test out one of these brokers.
We believe one broker cannot possibly serve all of our needs. For each market we need a broker who independently gathers accurate and timely information, obtains instant execution, and puts the interests of his clients above his own. We have no problem in paying this type of broker a decent commission if he works to make us money with his ideas.
Amen.
http://204.244.168.151/education/The_Brokers.cfm
Reid
While we are on the subject of brokers, we note that not all brokers are created equal. In most national firms, the brokers are the asset-gathering types. They do not time the market. They do not perform the research. They simply market to us with carefully crafted charts and past performance figures, win our trust, take our money and invest it in safe things like a combination of bonds, mutual funds and blue chip stocks which are produced by their corporate finance department and promoted by their research departments. If our account is not performing, together we will simply "fire" the mutual fund and buy another one, thereby generating some additional commission for our broker who recommended the first mutual fund in the first place. As for our stock portfolio, we don't every worry about its performance because we have been told that, in the long run, stocks always go up. We would rather purchase no load S&P index funds on a dollar cost average if we were going to buy and hold forever. In the end, very few advisors can ever beat the S&P anyway.
Reid
The best solution is to trade with a Canadian broker who has immediate access to a machine. We have accounts in both U.S. and Canadian funds in order not to lose money on repeated currency conversion. Cash is deposited in the U.S. account and trades are made in the Canadian account, with the debit in one offset by the credit in the other.
http://204.244.168.151/education/The_Brokers.cfm
Reid
If we are Canadian clients and we decide to buy a stock listed in Canada, calling any Canadian broker who does not sit in front of the relevant order entry machine (VCT, CATS, ACE) causes delays in getting our orders filled. We want to call someone who is sitting right in front of one of these machines, not someone who needs to make phone calls, get authorizations, etc. before our order can be entered. We need speed.
Reid
For example, if we are a client in the U.S. and we decide to buy a stock listed in Canada, calling our U.S. brokerage firm that does not own a seat on the particular Canadian exchange is not the most efficient way of doing things. The U.S. firm will call a Canadian seat holder firm to place the order. The Canadian firm will charge the U.S. firm a small markup for the stock and in turn the U.S. broker will charge us a commission on the marked up stock. If the Canadian broker has a good liability trader, they will simply fill our order and trade against it for a profit. We have just become order flow, a ticket in a book sitting open on a trader's desk to trade against for a profit, together with the rest of the U.S. client orders. We will never know this happened because all trades are reported to us in U.S. dollars, thereby hiding the pennies stolen from our pockets. This type of trading makes up to 40 per cent of the orders executed by some Canadian firms.
Reid
The Brokers
"That's why they call it an execution", goes the ad.
Traders and investors must pick the right brokers in order to get the right service. Nowhere is this more important than when we are trading speculative stocks. No matter what they say, all brokers are not created equal.
We trade with Canadian brokers in Canada. We trade with U.S. discount brokers in the United States. We trade with futures brokers in Chicago. What they all have in common is that they sit in front of direct order entry machines or they have people in the relevant pit.
http://204.244.168.151/education/The_Brokers.cfm
Reid
Brokers live and die by their motto: Know your client. Traders should have their own: Know what you trade. This applies to each and every symbol. Each market and security has its own characteristics. Factors that influence trading include volume, underlying contracts, expiry dates, volatility, market makers, news releases, etc. Economic data is a big influence. It can become overwhelming to the individual investor. After a while it seems that we need to become seers in order to be successful investors or resort to the buy and hold strategy with a large dose of prayer added. Sometimes we joke about the CNBC chicken or the dart board strategy.
We all know about the Bre-X incident. It was a good lesson, but it illustrates that no matter how tough and thorough, oversights happen. Bre-X originated on the Alberta Stock Exchange, went on to trade on every exchange in Canada and on NASDAQ, except one, the Vancouver Stock Exchange, because Bre-X would never have satisfied VSE listing requirements as their "gold" was not analyzed by fire assay. It became an institutional holding and mutual funds held most of the paper in the end. Stock exchanges cannot stop every scam. And where was the media? When we looked at the chart of Bre-X three months before the final collapse, it was already quite self evident that there was something wrong. There was plenty of time to sell if one wasn't married to the stock because of its glamour. We are always thankful when our stop loss is hit. Let the others hope and dream. We will take profits, thank you very much.
Reid
In "our" (follow the story line) travels we have met many of the promoters with their touts. They take on many forms. Some call themselves venture capitalists and have nice downtown offices. Some do their handiwork via newsletters. Some create websites that offer some useful information. Some are brokerage house research reports. In the end it doesn't really matter to us. We just want to make some money and if a stock doesn't make us any money, it doesn't matter if it is the next Microsoft. Smart money votes with cash. We seek to follow smart money. We do not make moral judgements. We make money.
Credit:
http://204.244.168.151/education/The_Press.cfm
Reid
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