8 replies to this topic

[NAV]

There are a whole bunch of posts cheerleading the WWW rally and new highs, even by those who probably did not participate in it. Congrats to all those who did ! Money is made by positioning for the next move, be it for the "Next few hours" or "Next few days" or "Next few weeks", depending on the timeframe you trade. Hindsight (especially those annotated charts) are beautiful !. What's next ? I was trying to create a poll with the following options. Are you folks positioned long for the continuation of the breakout ? Are you folks positioned short for a breakdown (i.e a fake breakout)? Are you folks positioned short for a minor pullback ? Are you folks waiting for a pullback to load up long ? Can the Admin please help ?

Edited by NAV, 20 April 2007 - 11:32 PM.

[Tor]

I heard some famous guy say the market can remain irrational for longer than an investor can remain solvent. I agree with him on that comment, given the momentum. Recent move up has been currency orientated and some sqqqqqqueeze action IMO. Some of the things I look at suggest a pullack soon, but I cant step in front ofthis steam train right now.

[Sentient Being]

There are a whole bunch of posts cheerleading the WWW rally and new highs, even by those who probably did not participate in it. Congrats to all those who did !

As an individual who has the bulk of his assets in well diversified buy and hold funds, I participated in the rally! Go Rally!

As a trader, I'm depressed and haven't been trading lately. Which means I'm likely to toss more dollars into the diversified side of the house so I can participate even more in future rallies!

[da_cheif]

after a possible post expiration adjustment we get to start all over again......maybe......unless of course we dont ...or if we do......

sending most home for the weekend in a good mood leaves most unprepared for what awaits them on monday.....unless this time "its different"......3 days of euphoria for the price of one isnt my idea of eagerly anticipating monday.....i love friday declines because usually they take it up on mondays......sooo...once again...out came my hedge against my 1095 and 1383 long big contracts....i aint smart enuff to do it any other way......an astute observer saw this

http://www.traders-t...showtopic=69332

[Trend-Shifter]

US equities... Since the 2000 decline small caps were the winners. Then mid-caps joined the game. Now large caps are out performing small caps. Definitely a changing market. I attribute this rotation to the positive influence of the weaker dollar on large caps. Also a shift of the Chinese banks to buy some US equities and less US bonds. As long as this pattern stays in effect I would be long the S&P 500 & other related ETFs like RSP. Take the dividends too. Not a rocket ship, but if your 401K has limited choices, it may be a good place to be. Gold is still a good vehicle for the trading account though!

[Trend-Shifter]

To Sentient... Rather than being discouraged at trading and just having a diversivied portfolio, you may want to consider another conservative approach, but with a few more eggs in one basket. Perhaps work on identifying what is working and get a little overweight in that segment. Set your percentages. Have a plan on how to exit or change that percentage when that overweight segment breaks down. Channels, trailing stop, etc. During the "hold" duration rebalance if the overweight portion outperforms as it should. At the same time track what sucks, that could be the next place to consider when you need to get out of your overweight position and create a new overweight model. If your not locked into limited 401K choices, ETF's are great for trends and you have lower risk because it typically won't blow up like an individual stock. It won't go bankrupt or to zero on bad news. There is always a trend happening somewhere, you just need to look for it.

[Sentient Being]

Trend Shifter, Your suggestion is not without merit. Basicaly suggesting I trade a small amount, carfully trying to overweight a bit in "whats' working". Of course, the stick issues are how do I define "what's working" and "when do I get out"? I sometimes have spotted what's working and what was about to work, but nearly always, a corrective action decided to be a fraction of a percent larger than my stop loss no matter how large I make my stop loss. I'm clearly working myself up emotionaly to shove more dollars into my buy and hold and out of my trading pile. But I may be in the mood to play with some trading, yet again. Let me ask you a few specifics. What do you watch specificaly? For instance, you mention large caps, mid caps, small caps. Are you tracking ETF's, Funds, or stocks? And how do you determine what's working? Trend lines? Moving averages? Volume? I have this coming week off. I might be in the mood to sit down and set up a way to track "what's working and what's not" just for the heck of it. Just make another group in metastock and dump in the ETF's or stocks you suggest and create some overlays that help to determine..."what's working".

Edited by Sentient Being, 21 April 2007 - 12:27 PM.

[Trend-Shifter]

Trend Shifter,

Your suggestion is not without merit. Basicaly suggesting I trade a small amount, carfully trying to overweight a bit in "whats' working".

Of course, the stick issues are how do I define "what's working" and "when do I get out"? I sometimes have spotted what's working and what was about to work, but nearly always, a corrective action decided to be a fraction of a percent larger than my stop loss no matter how large I make my stop loss.

I'm clearly working myself up emotionaly to shove more dollars into my buy and hold and out of my trading pile. But I may be in the mood to play with some trading, yet again.

Let me ask you a few specifics. What do you watch specificaly? For instance, you mention large caps, mid caps, small caps. Are you tracking ETF's, Funds, or stocks? And how do you determine what's working? Trend lines? Moving averages? Volume?

I have this coming week off. I might be in the mood to sit down and set up a way to track "what's working and what's not" just for the heck of it. Just make another group in metastock and dump in the ETF's or stocks you suggest and create some overlays that help to determine..."what's working".

===================================
I am low tech...no oscillators, volume, etc. Just a simple price chart. I want to give Gary Smith credit with illustrating his "tight rising channels". It was his inspiration that I developed my latest trading style. My channels though are usually more like "loose-wild rising channels"!

Yahoo finance has a good site to find your ETF picks to track. Make a list of what is "working" and what is continually heading down to be your "next best thing" . You need to pick what is "working" while watching for the "next best thing". If you can catch "the next best thing" near a bottom the longer it can be rode up. Many things that are "working" today may be long in the tooth and ready to turn. At the same time, you may want to change ships to something that is "working" better.
Link: http://finance.yahoo.com/etf

From there I use stockcharts.com to look at the charts with more detail. When you are narrowing down your picks you can review everything from fundamentals, time frame, risk, strength etc. I rank my picks using a system similar to an FMEA that we use in engineering to rate the risk of failure. Here I use a market fundamental analysis and personal opinion. After I am in, it's all price.

Now you just need a system to get out. I use a trailing stop method. When I enter I use a very tight percentage. Typically 1%. It needs to start working right out of the gate. If the trend persists I gradually increase the percentage as I have gains, but never increase the percentage to allow a loss. If the trend starts to work, you should set your trailing stop to realize gains, even if small. The maximum percentage of trailing stop allowance I use is 4-5% of the highest price or account balance achieved when I have already exceeded 15% in gains. If fundamentals change, I will tighten the trailing stop percentage. I have a rule on "one day drops". If you have a single day massive drop, reset the lowest price less 0.5% percent as your maximum pain sell point. Record this price. Don't sell based on your trailing stop if it gets blown out in a hugh one day drop. It's already too late. If it recovers go back to the trailing stop method. If it has another drop and takes out the "recorded" price, get out!

My one day drop rule helps me in my 401K when the S&P fell and when my China ETF fell.

Remember, I am a NOT a professional and do NOT offer any financial advise. All disclaimers apply. I only discuss what works for me so you can develop your own system. If Gary Smith did not share in the past, I would still be trying to find my inner trader. At the same time I could not hold him responsible if my system did not work.

[Sentient Being]

Trend-Shifter,

Thanks for your responce. I, too, was impressed with that conversation from Gary Smith. I have an idea that might help me. Metastock has some issues placing more than say two stocks on the same chart relating to price. I just realized that I could "normalize" all the prices of any issue I want to track and then they could all be watched on the same scale. That might help me to track a number of issues and know "what's working and what's next" all on one chart. Your stops start fairly tight in my opinon for tracking long term but I can't really complaign about something that's working for you. I like the fact that you are controlling your risk with stops and position size.

I have the next 5 days off in a row, I think I'll try to work up something which interests me. My present thinking is to move more money to buy and hold but still keep out 50K or so on the side for trading. Play around with a few positions.