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Grouping trader types by psycology


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#1 dcengr

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Posted 29 December 2006 - 12:34 PM

Out of boredom, I wanted to put down some of my thoughts on trader psychology and time frames. Discussion is appreciated, but my guess is I won't get any :lol:. Anyways, these are the classification of traders and time frames and what I believe motivates their rationale: 1. Long term traders - Generally invest in terms of years, mostly motivated/affected by economic conditions (recession, boom, etc). Probably constitutes majority of share holders in retirement accounts. 2. Intermediate term traders - Generally invest in terms of months, mostly motivated by shorter term economic conditions and money supply. Probably constitutes majority of hedge fund managers and large traders. Important items are likely sentiment in longer time frames (ie COT), money supply (ie fed repos), cycles in monthly time frames. Has lots of $, and responsible for most of the IT fluctuations. 3. Short term traders - Generally invest in terms of days/weeks, mostly motivated by technical analysis, very short term emotional fluctuations. News traders, etc. Has low $, but responsible for some fluctuations on daily/multi day basis. Like the seasonality play going on now. Mostly small traders. 4. Very Short term traders - Generally day traders. Not sure what motivates them or if their trade systems give them any advantage. Probably noise in most cases, most are probably on losing end. Its probably useless to model item #4, but worthwhile to model the first 3. Importance is given in the order of 1, 2, 3. One must know where one is in the economic cycle, then the intermediate cycle, then finally the short term cycle. My guess is that we're probably in the following areas of each respective cycles: 1. Economic cycle is getting long in tooth, hence odds of continued advance (ie gains of another 50% etc) are low. 2. Intermediate cycle is also getting long in tooth, hence some correction is necessary, but what that amount is or where it occurs (ie +/- 5%) is still a toss. 3. Seasonality is supporting bullish take at least going into january, but that will end within a few days. I think short term sentiment models are showing a lot of froth, so my guess is still down for a bit.

Edited by dcengr, 29 December 2006 - 12:34 PM.

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#2 greenie

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Posted 29 December 2006 - 12:48 PM

If you are really bored, I have a downloaded paper on this topic that you may find interesting. It classifies traders as large money ones, insiders, technical traders, value traders, sentimental traders (newbies) and tells you who takes money from whom and how. It is thought-provoking to say the least. [Please send me a email address.]
It is not the doing that is difficult, but the knowing


It's the illiquidity, stupid !

#3 traderpaul

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Posted 29 December 2006 - 12:49 PM

VST....Day traders just trade the momentum.....Traders often trade the push up and down.....Buy them on breakouts and sell them on the push up and not waiting for the weakness to sell....in other words buy strength and sell into strength....
"Inflation is taking place now. Prices may not appear to be rising because they are making packaging smaller. " Rickoshay

#4 hiker

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Posted 29 December 2006 - 01:11 PM

category 1 & 2 traders are likely to be holding some of these at year-end....now what will happen with these in 2007? I may report status into year-end 2007 for kicks.

a sample only of ETF's/Ishares -

DVY
EWD
EEM
FXI
IVV
IWR


stocks, a sample only -

AFAM
AGE
AKH
ALV
AXP
BAB
CCBL
CHTT
CHU
COL
DB
GRMN
HAIN
HLT
HPQ
HXM
IBM
ICE
IGT
LAMR
LFC
LMT
LNC
LORL
LZ
MCD
MO
MSFT
NKE
NTY
NVDA
PCLN
PG
POT
PRU
PSS
RECN
ROS
RYAAY
SCHW
SEE
SEPR
SHPGY
SHW
SKX
SNP
SWY
SYY
T
TM
TWX
UBS
USM
UST
VFC
VOD
VOLV
VZ
XLF - spdr...most brokers, banks, and insurers not included in this list for brevity
XOM
XTEX
ZMH


AXP and MCD have been core holdings for category 1 and 2 traders since before the internet bubble...15-year monthly charts:

Posted Image

Posted Image

here are the 12/29 intraday stats on the group..short ratio on far right (LFC not yet adjusted for the split) -

Symbol Pct from Yr High Trade Change Volume Avg Vol (3m) Short Ratio

- - - - - AFAM Down 0.25% 42.9118 Down 0.1082 Down 0.25% 16,288 12,281.2 1
- - - - - AGE Down 1.19% 63.76 Up 0.04 Up 0.06% 148,200 350,998 6.6
- - - - - AKH Down 0.66% 42.22 Down 0.13 Down 0.31% 13,400 71,187.5 1.1
- - - - - ALV Down 0.31% 60.81 Up 0.09 Up 0.15% 159,300 491,448 1.2
- - - - - AXP Down 2.06% 61.21 Up 0.07 Up 0.11% 640,600 5,320,000 4.5
- - - - - BAB Down 0.98% 103.86 Down 0.97 Down 0.93% 14,400 64,929.7 3.3
- - - - - CCBL Down 1.23% 11.26 Down 0.03 Down 0.27% 110,230 361,191 6.2
- - - - - CHTT Down 1.86% 50.68 Down 0.04 Down 0.08% 18,621 517,192 6.8
- - - - - CHU Down 6.69% 14.93 Down 0.53 Down 3.43% 962,800 622,839 1.4
- - - - - COL Down 0.87% 63.75 Down 0.11 Down 0.17% 150,200 685,789 3.5
- - - - - DB Down 0.74% 133.71 Down 0.29 Down 0.22% 24,100 142,114 3.6
- - - - - DVY Down 0.71% 70.98 Down 0.16 Down 0.22% 245,200 378,852 -
- - - - - EEM Down 0.32% 114.43 Up 0.05 Up 0.04% 1,437,400 5,397,300 -
- - - - - EWD Up 0.44% 32.29 Up 0.20 Up 0.62% 264,600 192,108 -
- - - - - FXI Down 0.91% 111.87 Down 0.53 Down 0.47% 720,900 951,661 -
- - - - - GRMN Down 0.42% 56.56 Up 0.31 Up 0.55% 830,217 2,981,420 3.1
- - - - - HAIN Down 1.66% 31.40 Down 0.08 Down 0.25% 116,748 289,491 8.4
- - - - - HLT Down 1.96% 35.09 Down 0.43 Down 1.21% 1,105,500 2,985,110 3.5
- - - - - HPQ Down 0.72% 41.40 Up 0.04 Up 0.10% 2,704,000 13,848,800 2
- - - - - HXM Down 1.53% 59.14 Down 0.76 Down 1.27% 164,800 299,245 3.4
- - - - - IBM Up 0.14% 97.5336 Up 0.5636 Up 0.58% 1,697,100 6,002,730 2.8
- - - - - ICE Down 5.45% 107.64 Down 1.36 Down 1.25% 935,000 2,863,320 1.1
- - - - - IGT Down 0.60% 46.48 Up 0.37 Up 0.80% 444,100 2,221,310 6.7
- - - - - IVV Down 1.03% 142.39 Down 0.11 Down 0.08% 399,000 910,230 -
- - - - - IWR Down 1.58% 100.28 Down 0.19 Down 0.19% 186,000 173,897 -
- - - - - LAMR Up 0.26% 66.00 Up 0.95 Up 1.46% 386,714 769,827 8.5
- - - - - LFC Down 64.91% 51.40 Down 0.91 Down 1.74% 1,744,000 422,169 0.8
- - - - - LMT Down 0.79% 92.50 Up 0.19 Up 0.21% 452,100 1,802,200 2.6
- - - - - LNC Up 0.01% 66.559 Up 0.099 Up 0.15% 347,300 1,133,390 2.2
- - - - - LORL Down 1.97% 40.71 Down 0.41 Down 1.00% 14,552 64,581.2 10
- - - - - LZ Down 0.94% 50.275 Up 0.115 Up 0.23% 87,200 275,597 2.7
- - - - - MCD Down 0.40% 44.4505 Up 0.0905 Up 0.20% 1,495,800 11,085,100 2.1
- - - - - MO Down 0.62% 85.91 Down 0.32 Down 0.37% 1,662,600 9,282,850 3
- - - - - MSFT Down 1.16% 29.91 Down 0.07 Down 0.23% 13,290,275 57,874,900 2.4
- - - - - NKE Down 1.97% 99.21 Up 0.01 Up 0.01% 383,500 1,460,490 3.4
- - - - - NTY Down 0.48% 41.87 Up 0.04 Up 0.10% 285,000 828,408 2.2
- - - - - NVDA Down 3.29% 37.68 Up 0.44 Up 1.18% 3,120,983 9,809,410 1.3
- - - - - PCLN Down 0.99% 43.84 Up 0.04 Up 0.09% 215,998 1,066,150 5.4
- - - - - PG Down 0.17% 64.51 Up 0.03 Up 0.04% 1,680,200 6,747,410 2.6
- - - - - POT Down 1.68% 144.72 Down 0.72 Down 0.50% 130,600 973,484 3.3
- - - - - PRU Down 1.36% 85.99 Up 0.08 Up 0.09% 206,800 1,950,160 2.4
- - - - - PSS Down 1.25% 33.18 Down 0.28 Down 0.84% 434,300 1,082,910 5.3
- - - - - RECN Down 1.10% 32.23 Down 0.08 Down 0.25% 122,326 439,650 11
- - - - - ROS Down 1.40% 45.8001 Up 0.0501 Up 0.11% 12,700 84,226.6 30.1
- - - - - RYAAY Down 1.42% 81.05 Down 0.07 Down 0.09% 136,782 306,852 4.7
- - - - - SCHW Down 0.41% 19.41 Up 0.05 Up 0.26% 1,403,765 7,378,000 1.9
- - - - - SEE Down 0.33% 65.54 Up 0.43 Up 0.66% 94,400 280,967 6.2
- - - - - SEPR Down 1.42% 61.99 Up 0.31 Up 0.50% 376,141 2,330,330 5.9
- - - - - SHPGY Down 3.54% 62.16 Up 0.01 Up 0.02% 92,567 1,110,720 1.5
- - - - - SHW Down 1.44% 63.83 Down 0.38 Down 0.59% 133,200 981,605 6
- - - - - SKX Down 0.39% 33.45 Up 0.10 Up 0.30% 128,700 487,291 3
- - - - - SNP 0.00% 92.7501 Up 1.0701 Up 1.17% 99,900 310,817 2.5
- - - - - SWY Down 1.91% 34.93 Up 0.03 Up 0.09% 554,700 3,600,350 5.9
- - - - - SYY Down 0.08% 36.97 Up 0.10 Up 0.27% 598,400 2,042,180 7.3
- - - - - T Down 0.50% 35.82 Up 0.32 Up 0.90% 10,950,000 25,235,100 7.3
- - - - - TM Up 0.03% 134.88 Up 0.62 Up 0.46% 211,600 443,966 0.7
- - - - - TWX Down 1.48% 21.92 Down 0.08 Down 0.36% 9,993,700 26,161,000 3.2
- - - - - UBS Down 4.24% 60.70 Up 0.28 Up 0.46% 285,800 1,059,580 1.1
- - - - - USM Down 0.74% 69.90 Up 0.80 Up 1.16% 28,400 93,371.9 11.4
- - - - - UST Down 2.29% 58.13 Down 0.32 Down 0.55% 163,000 980,773 8.7
- - - - - VFC Down 0.99% 82.28 Up 0.14 Up 0.17% 124,200 592,556 3.7
- - - - - VOD Down 3.79% 27.90 Up 0.10 Up 0.36% 773,800 2,613,450 4.4
- - - - - VOLV Down 0.68% 69.00 Up 0.29 Up 0.42% 12,607 50,646.9 2.8
- - - - - VZ Down 3.67% 37.52 Up 0.20 Up 0.54% 3,870,100 12,150,800 3.7
- - - - - XLF Down 0.65% 36.90 Down 0.05 Down 0.14% 1,561,800 5,721,480 -
- - - - - XOM Down 2.73% 76.84 Down 0.49 Down 0.63% 5,143,700 20,049,500 3
- - - - - XTEX Down 0.33% 39.87 Up 0.18 Up 0.45% 3,564 29,765.6 1.9
- - - - - ZMH Down 0.85% 78.44 Up 0.41 Up 0.53% 260,000 1,363,090 5.5

Edited by hiker, 29 December 2006 - 01:21 PM.


#5 S.I.M.O.N.

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Posted 29 December 2006 - 01:25 PM

i don't see why any "trader" would limit himself to one particular timeframe. I have held physical stock/gold/silver for more than 10yrs, so that technically makes me a very long term investor, on the other hand i trade futrs in the weekly all the way down to scalping timeframe , so that technically puts me the IT to VST category as well. And as far as putting traders in various categories based on their acct balances, thats just plain silly. It does'nt take long for a bad trader to burn thru a 8 figure acct.
*previously known as pnfwave

#6 dcengr

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Posted 29 December 2006 - 01:38 PM

i don't see why any "trader" would limit himself to one particular timeframe.
I have held physical stock/gold/silver for more than 10yrs, so that technically makes me a very long term investor, on the other hand i trade futrs in the weekly all the way down to scalping timeframe , so that technically puts me the IT to VST category as well.
And as far as putting traders in various categories based on their acct balances, thats just plain silly. It does'nt take long for a bad trader to burn thru a 8 figure acct.


I agree that it doesn't apply to everyone. I think in general most are in this time frame for 70% of their trading life. As you said, some may be LT in some sectors, VST in others.

Its just a way to try and group behavior in a convenient package in an attempt to analyze and perhaps predict their behavior.
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#7 hiker

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Posted 29 December 2006 - 01:47 PM

dc...want to venture a guess how LT or IT traders..both shorts and longs..are currently behaving as MCD approaches its historic high? MCD current price has already sustained a move above the 44.01 area of historic importance....historic high remains above and is untested so far... For a perspective of what mutual funds and LT traders have to choose from for exposure to the restaurant industry, here is a sampling of restaurant stocks....not many are near the 52-week highs as can be seen in the % from 52-week high column next to the symbol: Symbol Pct from Yr High Trade Change Volume Avg Vol (3m) Short Ratio - - - - - APPB Down 6.23% 24.82 Down 0.16 Down 0.64% 350,081 1,132,990 4.5 - - - - - BKC Down 2.44% 20.76 Down 0.23 Down 1.10% 104,900 478,802 3.2 - - - - - BNHN Down 15.91% 30.65 Up 0.15 Up 0.49% 1,196 3,564.06 - - - - - - BNHNA Down 17.91% 29.88 Up 0.11 Up 0.37% 37,910 32,407.8 1.2 - - - - - BOBS.OB Down 6.36% 5.15 Up 0.05 Up 0.98% 500 7,718.75 0 - - - - - BWLD Down 8.26% 53.53 Down 0.17 Down 0.32% 44,944 209,261 4.5 - - - - - CASA Down 17.78% 11.10 Up 0.10 Up 0.87% 1,100 3,703.12 1.9 - - - - - CBOU Down 25.04% 8.62 Up 0.13 Up 1.53% 29,111 51,984.4 11.2 - - - - - CMG Down 16.85% 56.35 Down 0.07 Down 0.12% 78,800 1,100,630 6.9 - - - - - COSI Down 55.22% 5.01 Down 0.10 Down 1.96% 198,002 566,617 5.3 - - - - - CPKI Down 3.45% 33.31 Up 0.04 Up 0.12% 39,146 260,755 6.3 - - - - - DENN Down 9.70% 4.7500 Down 0.0500 Down 1.04% 470,190 803,294 7.5 - - - - - DPZ Down 2.39% 28.21 Down 0.14 Down 0.49% 73,800 403,614 5.7 - - - - - DRI Down 9.59% 40.17 Down 0.49 Down 1.21% 342,400 1,401,880 3.1 - - - - - EAT Down 5.00% 30.42 Down 0.07 Down 0.23% 196,200 1,600,960 3.8 - - - - - GRIL Down 22.02% 3.1193 Up 0.1093 Up 3.63% 750 5,448.44 1.2 - - - - - JBX Down 5.22% 61.23 Up 0.26 Up 0.43% 122,000 443,033 3.5 - - - - - MCD Down 0.31% 44.49 Up 0.13 Up 0.29% 1,652,500 11,085,100 2.1 - - - - - MRT Down 17.28% 16.75 Up 0.38 Up 2.32% 73,000 70,085.9 6.1 - - - - - MSSR Down 13.74% 24.36 Down 0.33 Down 1.34% 7,698 118,862 2.2 - - - - - NWRG.PK Down 42.31% 7.50 Down 0.05 Down 0.66% 500 1,590.62 N/A - - - - - OSI Down 18.72% 39.24 Down 0.04 Down 0.10% 640,100 961,744 6.6 - - - - - PFCB Down 29.91% 38.50 Up 0.17 Up 0.44% 124,591 627,091 8.9 - - - - - PNRA Down 25.86% 56.26 Down 0.21 Down 0.37% 227,654 889,144 5.7 - - - - - PZZA Down 23.39% 29.08 Down 0.48 Down 1.62% 248,838 344,355 12.2 - - - - - RICK Down 23.33% 6.87 Up 0.41 Up 6.35% 167,927 98,978.1 1.2 - - - - - RUTH Down 25.15% 18.42 Down 0.23 Down 1.23% 44,881 290,491 3.5 - - - - - SBUX Down 11.17% 35.54 Down 0.18 Down 0.50% 2,167,484 7,207,290 4.4 - - - - - SWRG Down 17.99% 5.06 Up 0.06 Up 1.20% 6,786 10,782.8 0.9 - - - - - TAST Down 8.38% 14.00 Down 0.15 Down 1.06% 18,100 871,878 N/A - - - - - WEN Down 50.42% 33.31 Down 0.29 Down 0.86% 270,500 2,259,350 3 - - - - - YUM Down 7.24% 59.07 Down 0.03 Down 0.05% 258,700 1,776,830 2.4

Edited by hiker, 29 December 2006 - 01:52 PM.


#8 dcengr

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Posted 29 December 2006 - 01:52 PM

If you are really bored, I have a downloaded paper on this topic that you may find interesting. It classifies traders as large money ones, insiders, technical traders, value traders, sentimental traders (newbies) and tells you who takes money from whom and how. It is thought-provoking to say the least.

[Please send me a email address.]


Greenie, just browsing the pdf you sent me, I think its worthwhile that this gets uploaded on this board and put as reference...

Mark, if you're reading this, if I could suggest a PDF library to put resources like this (plus others like livermore book) for others to download.
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#9 securelstmile

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Posted 29 December 2006 - 02:02 PM

I trade very few stocks but diversify with time frames. That probably sounds strange but it works for me. My longer term stocks are based on about 80% fundamentals. I like to find stocks with great promise that no one has ever heard of and are poorly understood by the street. I don't just scratch the surface when I research a stock I know it inside and out which is why I invest in so few. Shorter term 80% technicals. I have a specfic amount of capital with which I trade and profits move over to the longer term well researched set of stocks.
The harder I work, the luckier I get.

#10 hiker

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Posted 29 December 2006 - 02:24 PM

SS...btw, sold my CLRT yesterday...you can count on me for some volume once it moves above $2.00. Thank you very much for the idea. Happy new year! Steve

the CMF for CLRT looks good -

http://stockcharts.c...llery.html?clrt

Edited by hiker, 29 December 2006 - 02:25 PM.