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More to come..eom
This is an old GTE chart I anotated, it is not up to dat but the premise is the important part.
I cant repost it with the chart so here is the link...
http://www.investorshub.com/boards/read_msg.asp?message_id=8186673
Here is a link to another old chart that shows the value of MACD on the weekly chart.
http://www.investorshub.com/boards/read_msg.asp?message_id=8558640
I just ran across this post by Atlantic Cowboy...
It is very insiteful. Hey Cowboy if your still out there let us know,we miss you!
Post #396
Wize - Thoughts_ Long, but a MUST Read for ALL
I too agree with your statement. Many of the traders that I know and associate with like to tell me about all the different indicators they use and how they use these fancy systems to help tell them where the stock will go. I also have a few friend that are serious investors who like to tell me all about the extensive fundamental research they use with expensive subscriptions, and financial calculators. Both of these groups of traders and investors share one quality, they both are perplexed by my simple trading strategies and my consistent high success.
As I have reminded the board once before, all indicators are lagging indicators. Even your statements about moving averages, while helpful, follows the same line of reasoning. A stock doesn't trend to its moving averages. The average trend to the stock.
For anyone getting into trading and interested in TA, the first and most fundamental concept that nearly all traders forget is....
Indicators and moving averages don't drive stock movements, stock movements drive indicators.
(What drives stock movements, well fundamentals do!).
Well, if that is the case, than it sounds as if TA is useless and Fundamental Analysis is the only way to go, but this assumption doesn't consider the hidden cost and the random walk theory( the random occurance of news and developments).
To do an appropriate amount of fundamental analysis, not only do you face a huge level of up front search cost in gathering all the information, organizing the information and collecting and organization information regarding the sector, the economy and the companies competitors, but then you face the large cost of processing all the information and compiling the information into digestible components. You also should consider the cost in acquiring the knowledge to be able to understand and interpret financial information. Analyst sink years (time cost and $ cost) into obtaining an education and then hours (most work 10 to 15 hours a day) a day researching companies and in the process, become experts in the field of their research. Here is the kicker....Analyst are usually not able to timely predict stock moves. Just as amateur traders, statistically, analyst are wrong almost just as often as completely inexperienced investors. Economist, especially those teaching in universities, have the worst tract record in predicting stock movements. The average and above average person cannot expect to make money consistently usually FA. The cost are enormous and most do not have 16 hours a day to research companies. (What about the random walk theory thing??)
FA does not and can not predict the occurrence of an important events and/or relevant company news. All the information that FA is based on is old (lagging) and there is a time lag (different for every stock in how new information in processed(correctly) into the stock price). FA is structure for a longer time frame than what traders and short term investors use. We do not have months and years to watch for potentially uncertain events come to fruition.
It all comes down to the premium to risk probabilities. Have you ever wondered what MOMO is??? You may hear people talking about stock momentum and its importance. So what is it?
Momentum is a shifting of the risk premium probability. If all (expected)future stream of revenue are priced into a stock at 100%, there would exist little price volitility in the market. The fact is is future revenues are not priced into the market at 100%, but instead are a fractional percentage of that based on the risk probability that they will be fully realized.
So MOMO is a positive volatility in the risk premium based on the risk probability of the actual realization of future streams of revenue.
So according to my last few statements, some might feel FA and TA are both a waste of time...
TA, if used correctly, can mesh the two together. As Wise stated, charts mirror (lagging!) stock movements. If market efficiency theories are correct, then we can assume that all available information (including the stock research by all the worlds analyst) have been considered in the stock's pricing movements. If you can recognize TA for a summary sheet for the world's FA and use it as such, not only can you harness all the power of FA without the cost (both explicate and implicit), but you can do something that FA can never do, and that is time a stock! (based on interpretations of a stock's movements relating to the interpreter a shifting of the risk premium associated with the aforementioned risk probability!!).
Good luck to all
~Atlantic Cowboy
The 200 pound man....
Post#547
The longer the time frame is, the stronger the trend is. This is why the first chart I look at when picking a stock is a 2 year weekly chart. If I'm buying a stock I want to make sure that what I call the "Underlying Trend", is going up. This is the strongest trend for any particular stock, If I'm looking to buy and I see that the stock I am looking at is in a downtrend or sideways on the weekly chart I will just move on to the next one. I wont even consider looking at the daily charts because the underlying trend is going against it.
I use the trends on a 6 month or 3 month daily chart to pick an entry or exit point. When a stocks underlying trend is in a strong trend, the daily charts cant break through it until the trend slows, than it will take time for the daily charts to turn around the weekly chart.
Now picture a 200 pound man walking down the street as the 20 day moving averge(dma), now picture a 30 pound kid(1dma) comming up and pushing on him, the likelyhood of the man being turned around is unlikely, now add 4 more kids pushing on the man, the 5 kids can slow him down but probably not turn him around, add another 5 kids now its more likely that the man will weaken and slowly start to go the other direction. But the man is still strong, and can push the kids back some, so we add 10 more kids, total of 20, once the 20 kids start pushing on him the man can no longer hold up and will turn around and go the other way. This is the very basics behind the 5/10/20 method.
I hope that made sense.
5/10/20 Review...
Basically I am just going to repost previous post and try to fill in some blanks. Please feel free to ask any questions, there are no dumb questions, the main thing is that you understand what the 5/10/20 system is and how to read it on a chart.
The object of this board is to teach people how to make "Safe" trades as opposed to entering a trade with no clue as to the current trend that stock is in. I have no interest in a 1%, 5% 10% or 200% gain, the gain will be what it is. What I am interested in is that people dont take a 1%,5%,10% or 200% loss.
When you pick a stock that is in an uptrend your chances of making money on that trade are MUCH better than buying a stock that is in a confimed downtrend.
This board is about knowing what an uptrend is, not technical minutia. Awareness of an uptrend, and when the potential for that trend to end is what makes people money. Most people that trade stocks have day jobs and can not sit in front of their computer all day, so the ideal thing is for them to wake up in the morning, go to work and not have to worry that the trade they made may have been a bad one. All they need to do is check a chart once a day or so and know when the time has come to get out. This board is not about daytrading.
I have never said that a specific time frame is necessary, Let the stock tell you what to do, don't try to tell the stock what to do, you WILL loose.
I am going to use Ohio12 as an example. I hope you dont mind Ohio. This, from what I can see is a typical person trying to make money in the stock market, just like most of us. He got in and lost money, why...because he didn't have an idea as to what the trend was when he entered a stock. Like most of us, who thought about trends when we first started investing?
When I first opened my trading account I didnt know what a chart was, much less a trend, I listened to all the so called pundits on TV like Cramer and the message boards only to watch my account balance continue to go down. It wasn't until I figured out that a chart can show a trend, than I started making money.
I will make no promises here that you will get rich in a week, But I will promise that if you buy a stock in an uptrend, your chances of making money are much better than buying a stock in a down trend. Nothing in life is 100%, no one can ever predict a really bad PR, but at least you will know its time to get out, and minimize your losses.
Design, The pleasure was all mine, thanks for visiting here. Lowtrade used to frequent this board but I think he forgot about us, I respect Lowtrades knowledge but we do have different styles of interpreting a chart. I like to keep things a little more simple than he does, but we usually come to the same conclusions anyway.
I think what I need to do now is go back over thae basics of my system, since we do have quite a few new board members. i don't have time tonight but will try to do it tommorow.
Thanks again for checking us out here.
Bushwacker, Welcome to our lil humble abode here, and no need to worry about being burned at the stake since I ran out of matches a long time ago.
As for posting charts, you don't need to be a paying member to do it here. Posting charts here is a bit different than most people are used to, in the meantime you can still post a link that we can go to and see it if you would like to try that way.
We talk about any price stock here, but personally I am not a BB or pinks fan, I won't say I never trade them, but it is a rare occasion when I do.
Again Welcome aboard and hope this site will be helpful to you.
OT...Pilgrim, did you ever find your mike? If so let me know!
OT...Hey Pilgrim,QT, I am a huge flat tax/ fair tax fan and I did fill out the petition. However as much as I would like to see the IRS go away, I am a realist. I honestly don't think abolishing the IRS will ever happen, at least not in my life time.
Just think about the hundreds of thousands of jobs that would be lost, not just direct employees of the IRS but all the corporate tax attorneys and accountants that would for the most part not be necessary anymore. Not to mention the companies such as H&R Block and TurboTax that make tax software ect, would no longer need to exist.
No matter how many American citizens want a new tax system, the lobbies of all the above will definately put pressure on all the congressmen in our government to prevent abolishing the IRS. It doesnt really matter how much sense it makes to reform the way we pay taxes, lobbiest control this country and they usually get what they want and there is way to much money for those involved to allow a fair or flat tax to be allowed to happen. Think about it, we would never have to file a tax return and their are ALOT of people and professionals that make their money off of the necessity for those tax returns.
I'm not trying to be a stick in the mud here, like I said earlier, Im just being realistic.
Daddy, I understand that there is alot of excitement about PTSC, it's had one helluva run. Have you ever heard of a double top? Well to me the current weakness in the chart tells me that that is a very possible formation. Right now $2.20 or abouts is the target. With todays trading momentutum may push the pps close to the $2.20 mark again, give or take 10 cents, but just like a bottom needs to form a top also needs to form. If the pps breaks and closes above the 2.20 target than it could be considered a buy, but I would definatly watch this closely.
Pilgrim, He told me he has studied the Elliott wave method for Ten years and he just pulls up a chart now looks at it and interprets it. Now soft ware involved, kinda like what we do here, just different.
QT, Jack wasnt there tonight he had a sub named Ed something, He was impressive and said the same thing my chart says a break above the 43-44 resistance, is very possible he called it a definite non sell but a strong hold. Ed uses the eliott wave theory, but I was charting along with his other calls and we were on the same page for the most part. I dont know if jack uses the same style as Ed or not, Hvnt heard Jack yet.
Damn women...always screwing things up!!!LOLOL
I didn't intend to go on the air I just wanted to know what software if any they were looking at, but they were so desperate for a call he talked me into going on the air. So since I posted the HD chart earlier I figured I throw it out there.
Just curious, was anybody listening to the Jack Steinman show tonight? It so the call about Home Depot was me.
Heres one that might be worth waiting a week or two on....
Deadb, when I started learning charts, which by the way we have something in common, both self taught, I used to do the same thing you do, multiple indicators, and analysis out the ass on each chart. And their is nothing wrong with that, you are very good at analysis, I just realized that many of the indicators are the same, their are basicall 3 different types and all you need is one of each.
I'm old fat ugly and lazy, so I came up with a way where I don't need to use the same amount of brain power that I used to. The system we use here is basically very simple, but it works. Alot of people don't want to get into the tedium of analysis that TA can easily lead to. This system uses indicators basically as verification to the 5/10/20 ma's they are the cruxt of this system (5/10/20) and prove to be very reliable for picking safe trades.
I looked at the GNE.v chart you posted and will agree with you that the ppo is a faster indicator than the macd on a daily chart, however I see that it gave several false exit points. Granted if you are daytrading that can be an advantage, but generally here we dont daytrade other than QT. If daytrading is what you want to do, Might I suggest you just watch 5/10/20 on a live 2 day 5 minute chart, watch it for a while to see the patterns develop. When I do daytrade that is all I use, indicators dont even come into play for me anymore. But thats my personal style.
You deffinately have spent your time with studing TA, I know what that is like and respect that. Your input here is definately appreciated.
Mellons, about NTGR, very nice find, your getting good at this stuff!
Anotated chart below.
Hey SecondLife, yep your right they are risky, I cant even pull up a chart on DCN.
If you've never traded pink sheets before or aren't familiar with them heres some things you should know 1st before traveling that road.
Any stock with a .pk means it is traded as a pink sheet, which basically means it has it's own market and market makers. However unlike the Dow or Nasdaq, the SEC does extremely minimal regulation of the company and the way the stock is traded. The company can basically do or say anything they want be it true or not, with no fear of reprimand from the SEC. The market makers are the same way, they can manipulte the stock price till there heart is content.
The DPHIQ weekly chart, is trying to make a move, but I have seen way to many pinks look good only to have the company dilute the crap out of it than the price never goes back up again. Granted there are a few honest legitimate companies that actually start on the pinks than graduate to a real exchange, but they are few and far between.
I personally will not play pinks sheets no matter how tempting, and would not recommend anybody else play them. But that is me personally.
As for Scottrade there are additional cost for trading stocks under $1.00, it might be 2 dollars, but there are no inactivity fees so one trade a year will cost no more than 1000 trades a year, and yes your stock hold will meet the required minimum.
You're welcome here anytime, I always appreciate a knowledgeable TA person. So any input you have will be welcome. An open mind is like a sponge willing to absorb knowledge, a closed mind, supposedly already knows it all.
Deadb440, This site has absolutely nothing to do with Wize Trade. This site is about a system I developed, that many people have benefitted from. I invite you to hang around awhile and hopefully make a knowledgeable assement.
I always welcome people that are willing to have an open mind and learn. The software I use is the stuff in my head, with some help from stockcharts.com for visual effect. Might I suggest you go back and read earlier post and look at previous charts that have been posted here, who knows you just might be surprised!
EXAS, The only thing that would peak my intertest in this stock is a close for a couple days above the 50dma @ 2.75, Everyone has this one pegged already.
Hey Buck, I have noticed on the charts that you post that I think it was 4 out of the 5 indicators you use are all in the same group of leading indicators, Rsi and Stochastics for example tell you pretty much exactly the same thing, so they are just reduntant indicators. I could explain to you the differences in the different types of indicators and why it is important to use a variety of types of indicators, but that would take way to long, so here is a link that has is a great source for understand the differances between indicators and how to use them.
Just so you know I only use three indicators other than the moving averages, they are RSI, MACD, and CMF. This is strictly a personal choice on my part, but they work for me, you may find others that work better for you, but the main thing is keep it simple, the more indicators you use the more confusing it gets and my little brain can't handle an overload of indicators. Heres the Link:
http://stockcharts.com/education/IndicatorAnalysis/indicators1.html
Hey Pilgrim, The daily chart sure looks like its going to give it a shot tomorrow, macd is looking very nice and could carry the momentum. Next couple days should tell...the rest of the story.
KKD Chart....
Just ran across this chart, well know company that is very cheap right now. Looks like their BK worries are about over.
Buck, can't argue with that 2nd post, that pick goes against every thing. Hope you're not trying to wish it up now, against a chart like that, it won't work, chaeck out the weekly, it's just as ugly, there may be support @ 1.73 on the weekly but I would much rather wait, than buy if it bounces.
I'm not trying to be mean, but I know you can find a better one than this.
VICL....Nice Chart...
The Daily chart looks odd with resistance @ 5.50 as previuosly stated.
IMO, this is one of those charts that are for the people that want to hold for a bit, the ones that don't care about trying to predict every tic of everyday. The weekly is looking very nice as long as you understand that there are always pullbacks in any uptrend, This is one I would buy and hold until the 5 wma starts to point down. Sit back and check on it once a week and enjoy the ride till the chart tells you to get out.
Notice the nice cross on macd, thats what we look for.
Nice pick Will.
Melons on Nabi I have to agree.
Nice find, I would just feel a little more comfortable with a flattening out of the 20 and the pps closing further above it than it currentl has. Deffinately one to keep on the radar for the next week or two.
Hey QT, Very interesting post.
What you are trying to do basically is predict the low of day and high of day. Lows usually do occure within the 1st half hour of the trading day, but whats to gaurantee that the stock isn't going to continue lower? I know you like to trade your style, but its just to risky for me. BTW Highs can form (Top "Leg", "Shadow" or "Wick", whatever you want to call it) anytime during the trading day, they do not always form at the eod.
Villas AVNX chart....
Your analysis of this one buying at a lower pps was right on, however I think this chart shows why the potential for even a lower entry point is possible.
Secondlife, gotta get up early tommorow, you definately have a start, Yahoo charts suck, concentrate on Stockcharts.com...you will figure it out.
Need to hit the hay so this will be the last post of the night, Have fun and we will meet again soon, maybe tomorrow night.
Here is a chart for Ford.
Pilgrim, you've got mail. eom
SecondLife, This is a good starting point. Please read post #1172, and follow the links. I will get to the rest of your picks soon. And if those links aren't enough, I will be happy to supply you with more.
Thanks Pilgrim thats the one I was looking for.
2ndLife, Here is a SNDK chart. Make sure you read what the chart say's, if you have any probs seeing it let me know. BTW, My phone is on.
Pilgrim, can you do me a favor, very recently you posted a post that had links to alot of my previous post, but I can't find it now. Would you mind looking in your log and reposting it?
Ok pilgrim Thats all of them. EOM
Pilgrim, I will undelete them so you can make your list.
Hey Second Life, Welcome aboard, seems we have something in common,;-p, just got home a few minutes ago. Give me a few minutes to get organized and Ill be back. Damn my hand hurts!...lol
Pilgrim, I appreciate your enthusiasm, but there is a point when saturation becomes a negative. I would much rather, you study the stocks you post and maybe pick two or three a day that have more potential than the others. Than we can have real discussions about those stocks.