Can someone please explain - Is Bottom fisher...
- Thread starter neo_hr
- Start date
neo,
Don't worry about asking questions...ask away...most of us here are here to help one another...there are a few who just come here so that they can character assassinate someone or inject some smart ass remark...we have an ignore function on this site...use it...other than that ask any question you want... there is no such thing as a stupid question...there are only questions which you are afraid to ask, because of fear of someone trying to cut you down...as far as I am concerned these people are no better than the terrorists who plauge mankind...if they can't bomb you or kill you or terrorize you then I guess the next best thing to do is intimidate and terrorize you so you won't ask questions...don't give up your freedom to ask questions here...and if you have to...use the ignore function...or else write to one of the moderators concerning character assasination by a particular individual...these people should not be tolerated on this site and I am sure Baron and the other moderators here don't want them either...these little babies need to go else where...in the meantime ask away bud...we all want to hear from you and learn together.
Don't worry about asking questions...ask away...most of us here are here to help one another...there are a few who just come here so that they can character assassinate someone or inject some smart ass remark...we have an ignore function on this site...use it...other than that ask any question you want... there is no such thing as a stupid question...there are only questions which you are afraid to ask, because of fear of someone trying to cut you down...as far as I am concerned these people are no better than the terrorists who plauge mankind...if they can't bomb you or kill you or terrorize you then I guess the next best thing to do is intimidate and terrorize you so you won't ask questions...don't give up your freedom to ask questions here...and if you have to...use the ignore function...or else write to one of the moderators concerning character assasination by a particular individual...these people should not be tolerated on this site and I am sure Baron and the other moderators here don't want them either...these little babies need to go else where...in the meantime ask away bud...we all want to hear from you and learn together.
Magna
Administrator
neo,
I really dont understand why everybody else is so hard on me
If you think a couple of comments and suggestions is being hard on you, then you're seriously kidding yourself about this business. As I mentioned before, I think it would serve you well that instead of peppering this board with a constant barrage of questions along the lines of: "is this a good setup", "should I get in here", "where do I get out", "please tell me what to do", you slow down, spend some time studying one or two instruments as Nicodemus mentioned, really studying one or two strategies, and then ask questions.
I really dont understand why everybody else is so hard on me
If you think a couple of comments and suggestions is being hard on you, then you're seriously kidding yourself about this business. As I mentioned before, I think it would serve you well that instead of peppering this board with a constant barrage of questions along the lines of: "is this a good setup", "should I get in here", "where do I get out", "please tell me what to do", you slow down, spend some time studying one or two instruments as Nicodemus mentioned, really studying one or two strategies, and then ask questions.
Neo:
If you read my journal, you know I am always brutally honest with my opinion, that includes Tony's books, so do not be offended.
You are in the worst possible situation trying to make it as a trader, and despite of what Tony told you, and assuming we can take everything he said for granted, he had quite a few edges over you. He started with $8000 when he was 16, but that was 15 years ago, and can you imagine how many kids get to play with eight grand 15 years ago here in the U.S.? Not many. Secondly, I could be wrong on this but his family happened to be in the stock market business and he received a tip from one of his family members and max margined it for a 600% gain almost first trade into the game if I am not mistaken, and that was a lot of cushion for him to play with, not to mention psychologically it changed everything. I can tell you this because when I started with 12K back in 1999 when I was 19, I was able to max margin it into 55K by the end of the year thanks to some momentum strategy by some "genius" on MSN Supermodel. In 2000 I blew up like everyone else did and that account went back to 12K by April, but I never lost a dime of my own money, and that was HUGE for me, as I probably would have never took this path had I lost all of my hard earned money as someone who went to school and worked 30+ hours a week. It was a gift (not to mention this year I can pay quite a bit less taxes thanks to what I lost last year, although I hope I never have to see a down month again forget about down year) to me, and I am very sure Tony considered his own start a gift as well.
Now, granted, Tony had to pay substantially higher commissions (even I did, as I started with E-Trade and if you are using anything other than IB you are asking for a brutal death), but we started with 2-3 times the capital you have (and early on that is a HUGE difference), and most importantly we got a very lucky gift early in our career that was the cushion to absorb all the damage that came. And let's not forget, the current market environment is still among the hardest market to trade in a few years (how many years I don't know, as I didn't trade professionally back then and I can not say whether say 1996 was easier or harder than this). The point? It is very unlikely you will get a gift trade early that will alter your fate. It is even less likely you will find someone who can provide you sufficient capital and equipment to trade (my gig at the prep. firm which I still consider the best possible start for me in this business).
So you got the odds stacked against you from the get go, and here is my conclusion, paper trade, paper trade, paper trade, forget intraday trading, swing trading is your only option and you should not risk your tiny little nest egg in this climate, paper trade and see how you do, in swing trading unless you lie to yourself paper trading is actually very useful as the fill price is no where near as big a factor as day trading. PAPER TRADE!
Now as for Tony's scans, let's put it this way, think of Tony as a fighter of say, Steven Segal, he tells you that when he sees certain things he twists and breaks the other guy's arm, a very simple technique. Now if you try to do this yourself, you will get punched in the nose, why, because he has a lot more experience than you do, and the same technique just packs so much more speed and power than yours, even if the technique itself is a no-brainer.
The same thing applies to trading. I programmed his scans in First Alert, and I can tell you for a fact that it is no better than any other set-ups, it is nothing more than a 50/50 scan. If the market/sector goes up and trends, then the bottomfisher will work wonders, if the market goes down you will do great with sky scrapper. Of course if we know whether the market will go up or down we already won every game, so what's the strength of those two scans? I will describe the bottomfisher here in detail and you can reverse everything I said for sky scrapper.
The bottomfisher is basically, an oversold stock, and you are basically betting that the seller is done, the specialist went long and he is going to squeeze. In my opinion whether the stock itself is in an actual uptrend or downtrend doesn't really matter (although in an uptrend you would look for a new high and in a downtrend you would look for a retracement), what does matter is that the three down day's should be extreme, so like a coiled spring you get a serious bounce right after. You really don't need stochastics (a horrible indicator in my opinion, as a matter of fact the only public indicator worth its salt IMHO is the Bollinger Band) to tell you whether something is oversold or not, support and resistance levels are a lot more important, just look at GENZ, it pulled back to a previous low and it bounced from there, and you too should be looking for pullbacks to previous low's so you can get a tight stop (he breaks the previous low I am out) on it.
The strength of the bottomfisher is that (especially if you look on the intraday chart / tape of yesterday and saw big volume went off and it has some sort of a base support), the seller is probably done, the specialist is probably long, and even if the market tanks, you should be able to get out with minimum damage. That I can confirm as almost none of the bottomfisher stocks my screen picked out actually tanked hard on me, doesn't mean I would have made money had I took them all, just that there was sufficient time to get out flat/small loss even if the future did came down hard.
The weakness of the scan is that its stocks tend to gap-up, and comes back to fill the gap, and wiggle a lot on the first day of the reversal, you can see it on that GENZ set-up, the first day wasn't a filled green candle at all. And there is of course, the risk of getting destroyed on a super trend stock (see AGN's intraday and tell me what would have happened had you tried to sky scrapper it, it showed up on my scan every day and fortunately I had an intimate knowledge with the stock and didn't take it). But perhaps the greatest weakness for a new trader to use this scan is that you will see a lot of different names with it, many of which you have never traded before and know nothing of its rhythm (I think I spelled it right this time Magna).
I will give you an example of a bottomfisher (and more will come in my journal as I trade them more often) on HDI, gap-up -> consolidate -> 3 day sell-off back to midband, yesterday I saw a serious offer and it was knocked out and BID stepped up, (even when I did not like the intraday chart of Thursday, no real support there) I went long 47.15 and it traded as high as 48, futures came in and I got out half 47.75 and other half 47.06 as it came all the way back in. The truth, if it doesn't work right off the bat, it probably won't work, as it will chop you up rest of the day, although as a swing trader you can probably give it more wiggle room say thursday's low (although in this case it is a gap-up and there is a chance for a re-fill and I don't like that).
Anyway, feel free to ask any question you want, you can even post your daily "hot picks" and I promise you I will look through all of them and post my comments. I am trying to learn his set-ups as well and we may be able to do it together, although don't be surprised if I dump it completely at some point, as no matter how good someone else's style is if it doesn't fit you it won't work. (Like Bruce Lee will never try to be a wrestler)
Last, but not least, I am going to give you one last piece of advice, when I started I lost 19 out of 20 games, and some senior trader gave it to me:
SHUT UP AND PLAY
If you read my journal, you know I am always brutally honest with my opinion, that includes Tony's books, so do not be offended.
You are in the worst possible situation trying to make it as a trader, and despite of what Tony told you, and assuming we can take everything he said for granted, he had quite a few edges over you. He started with $8000 when he was 16, but that was 15 years ago, and can you imagine how many kids get to play with eight grand 15 years ago here in the U.S.? Not many. Secondly, I could be wrong on this but his family happened to be in the stock market business and he received a tip from one of his family members and max margined it for a 600% gain almost first trade into the game if I am not mistaken, and that was a lot of cushion for him to play with, not to mention psychologically it changed everything. I can tell you this because when I started with 12K back in 1999 when I was 19, I was able to max margin it into 55K by the end of the year thanks to some momentum strategy by some "genius" on MSN Supermodel. In 2000 I blew up like everyone else did and that account went back to 12K by April, but I never lost a dime of my own money, and that was HUGE for me, as I probably would have never took this path had I lost all of my hard earned money as someone who went to school and worked 30+ hours a week. It was a gift (not to mention this year I can pay quite a bit less taxes thanks to what I lost last year, although I hope I never have to see a down month again forget about down year) to me, and I am very sure Tony considered his own start a gift as well.
Now, granted, Tony had to pay substantially higher commissions (even I did, as I started with E-Trade and if you are using anything other than IB you are asking for a brutal death), but we started with 2-3 times the capital you have (and early on that is a HUGE difference), and most importantly we got a very lucky gift early in our career that was the cushion to absorb all the damage that came. And let's not forget, the current market environment is still among the hardest market to trade in a few years (how many years I don't know, as I didn't trade professionally back then and I can not say whether say 1996 was easier or harder than this). The point? It is very unlikely you will get a gift trade early that will alter your fate. It is even less likely you will find someone who can provide you sufficient capital and equipment to trade (my gig at the prep. firm which I still consider the best possible start for me in this business).
So you got the odds stacked against you from the get go, and here is my conclusion, paper trade, paper trade, paper trade, forget intraday trading, swing trading is your only option and you should not risk your tiny little nest egg in this climate, paper trade and see how you do, in swing trading unless you lie to yourself paper trading is actually very useful as the fill price is no where near as big a factor as day trading. PAPER TRADE!
Now as for Tony's scans, let's put it this way, think of Tony as a fighter of say, Steven Segal, he tells you that when he sees certain things he twists and breaks the other guy's arm, a very simple technique. Now if you try to do this yourself, you will get punched in the nose, why, because he has a lot more experience than you do, and the same technique just packs so much more speed and power than yours, even if the technique itself is a no-brainer.
The same thing applies to trading. I programmed his scans in First Alert, and I can tell you for a fact that it is no better than any other set-ups, it is nothing more than a 50/50 scan. If the market/sector goes up and trends, then the bottomfisher will work wonders, if the market goes down you will do great with sky scrapper. Of course if we know whether the market will go up or down we already won every game, so what's the strength of those two scans? I will describe the bottomfisher here in detail and you can reverse everything I said for sky scrapper.
The bottomfisher is basically, an oversold stock, and you are basically betting that the seller is done, the specialist went long and he is going to squeeze. In my opinion whether the stock itself is in an actual uptrend or downtrend doesn't really matter (although in an uptrend you would look for a new high and in a downtrend you would look for a retracement), what does matter is that the three down day's should be extreme, so like a coiled spring you get a serious bounce right after. You really don't need stochastics (a horrible indicator in my opinion, as a matter of fact the only public indicator worth its salt IMHO is the Bollinger Band) to tell you whether something is oversold or not, support and resistance levels are a lot more important, just look at GENZ, it pulled back to a previous low and it bounced from there, and you too should be looking for pullbacks to previous low's so you can get a tight stop (he breaks the previous low I am out) on it.
The strength of the bottomfisher is that (especially if you look on the intraday chart / tape of yesterday and saw big volume went off and it has some sort of a base support), the seller is probably done, the specialist is probably long, and even if the market tanks, you should be able to get out with minimum damage. That I can confirm as almost none of the bottomfisher stocks my screen picked out actually tanked hard on me, doesn't mean I would have made money had I took them all, just that there was sufficient time to get out flat/small loss even if the future did came down hard.
The weakness of the scan is that its stocks tend to gap-up, and comes back to fill the gap, and wiggle a lot on the first day of the reversal, you can see it on that GENZ set-up, the first day wasn't a filled green candle at all. And there is of course, the risk of getting destroyed on a super trend stock (see AGN's intraday and tell me what would have happened had you tried to sky scrapper it, it showed up on my scan every day and fortunately I had an intimate knowledge with the stock and didn't take it). But perhaps the greatest weakness for a new trader to use this scan is that you will see a lot of different names with it, many of which you have never traded before and know nothing of its rhythm (I think I spelled it right this time Magna).
I will give you an example of a bottomfisher (and more will come in my journal as I trade them more often) on HDI, gap-up -> consolidate -> 3 day sell-off back to midband, yesterday I saw a serious offer and it was knocked out and BID stepped up, (even when I did not like the intraday chart of Thursday, no real support there) I went long 47.15 and it traded as high as 48, futures came in and I got out half 47.75 and other half 47.06 as it came all the way back in. The truth, if it doesn't work right off the bat, it probably won't work, as it will chop you up rest of the day, although as a swing trader you can probably give it more wiggle room say thursday's low (although in this case it is a gap-up and there is a chance for a re-fill and I don't like that).
Anyway, feel free to ask any question you want, you can even post your daily "hot picks" and I promise you I will look through all of them and post my comments. I am trying to learn his set-ups as well and we may be able to do it together, although don't be surprised if I dump it completely at some point, as no matter how good someone else's style is if it doesn't fit you it won't work. (Like Bruce Lee will never try to be a wrestler)
Last, but not least, I am going to give you one last piece of advice, when I started I lost 19 out of 20 games, and some senior trader gave it to me:
SHUT UP AND PLAY
This should be a volatile week, Wed. brings us the GDP and we it will probably be negative. We think that all
week they try and keep this move up going, but depending on what we hear Wed. it could unravel. Or they could ignore the GDP, but get spooked on Friday when the jobs and factory orders reports are released. Another scenario is that we gap up Monday and fall apart from there. We kind of feel it will fall sooner than later.
Your best bet will probably be to simply play each side, a little action on both sides of the fence, short where feasible and go long when the mood is up, but be quick.
When the NASDAQ runs out of steam some of these are going to fall back pretty hard: JNPR, BRCD, QLGC, EMLX
If any sector has a shot at moving higher it's probably
the bio's and if a couple go into the QQQ's, they
should explode. Watch them!
For those who like to "swing trade" where you hold the stock for 3 - 5 days looking for a minimum of 5% gains, keep these pointers in mind: First use the MACD lines to find a stock that is trending upward; second, watch for it to make a new high; third, watch it closely as it trades lower for 3 days in a row; fourth, when you see the first signs of a reversal, jump on it and buy.
Try The Fast URL: http://clix.to/wallmann
week they try and keep this move up going, but depending on what we hear Wed. it could unravel. Or they could ignore the GDP, but get spooked on Friday when the jobs and factory orders reports are released. Another scenario is that we gap up Monday and fall apart from there. We kind of feel it will fall sooner than later.
Your best bet will probably be to simply play each side, a little action on both sides of the fence, short where feasible and go long when the mood is up, but be quick.
When the NASDAQ runs out of steam some of these are going to fall back pretty hard: JNPR, BRCD, QLGC, EMLX
If any sector has a shot at moving higher it's probably
the bio's and if a couple go into the QQQ's, they
should explode. Watch them!
For those who like to "swing trade" where you hold the stock for 3 - 5 days looking for a minimum of 5% gains, keep these pointers in mind: First use the MACD lines to find a stock that is trending upward; second, watch for it to make a new high; third, watch it closely as it trades lower for 3 days in a row; fourth, when you see the first signs of a reversal, jump on it and buy.
Try The Fast URL: http://clix.to/wallmann
wallman...spam..ugh 
Here is another one for anybody seriously interested in trading better:
Bid, Ask, And Size
When you enter an order to buy or sell a stock, you see the bid and ask for a stock and some numbers. What are the bid and ask, and what do those numbers mean? One, the bid, is what you need to know when you are selling a stock. The other, the ask (or offer) is what you need to know when you're buying. But you also need to know those numbers. Here's how it works:
If an investor looks at a computer screen for a quote on the stock of XYZ, it might look something like this: Last: 20 Bid: 20 Ask: 20 1/4 BSize: 12 ASize: 5. The translation: the stock of XYZ is being bid at $20 a share and offered at $20 1/4 per share. There are 1200 shares bid for and 500 shares offered. If you are looking to sell stock, now you know there is a firm willing to pay (that's the bid side of the market) $20 for your stock, and that you could sell at least 1200 shares of stock at that price. Those are the two parts of the bid side of a market on a stock: the price and the quantity of shares at that price.
If you are looking to buy XYZ stock, you would have to pay $20.25 and could buy at least 500 shares of stock. Again, there are two parts to the ask side of the market: the price at which you can buy stock and the amount of stock you can buy.
When you look at a quote for a stock, it's only good for the time at which you check it. The bid and ask and the sizes for each side change constantly. If you were to check back in two minutes and you'd like to sell your XYZ at $20, the $20 bid may not be there because the stock may have moved up or down in that time frame. So each time you trade, you'll need to check the bid and ask to see where your particular stock is trading.
Whenever you enter an online trade, a "live" quote will be shown so you'll know where the stock is trading and what to expect if you buy or sell your stock. However, be aware that the stock can move very fast and that you may not get the price shown on your screen. That's because by the time your order is sent to the floor to be executed, the bid and ask may have changed because there was an order that came in ahead of yours and wiped out the bid or offer. Then the stock moves to a new level and the bid and ask will be different from what your screen showed when you entered the order. This doesn't happen very often, but it does happen. And when investors enter their market orders (meaning they will buy or sell stock at the market, no matter where the market for the stock is), look at the bid or ask, and then see their execution price is different from the stock prices they saw, they have to realize that stocks can be very dynamic, sometimes changing just as their orders are entered.
Another bit of jargon: the words ask and offer are the same thing. This is the side of the market where investors can buy stock. So when you hear: Where's the stock offered? Or what's the "ask" on the stock? They're both asking the same thing.
The size of the market can help you decide on the timing of your purchase or the price. For example, if good old XYZ is trading at $20, and the bid size for the stock is 200 and the offer size is 5, that means there are 20,000 shares bid for and only 500 for sale (when you see the amount of stock bid for or offered, just multiply it by 100 for the actual amount of stock. If you see 999, that means there are at least 100,000 shares). If you're looking to buy the stock, you might want to get your order in quickly because if the buyer of the 20,000 shares gets excited and starts to buy all the stock around, no matter what the price, it will push up the price. On the other side of the trade, if you are a seller, you may want to wait a little while because that kind of size to buy suggests that maybe the price will be moving up if the buyer doesn't have patience and wants that XYZ stock NOW.
Of course, the buyer may not move from the $20 price, or may find another stock that is more attractive and buy that one instead. So you can't know with certainty what will happen with the stock's price. But then, except for death and taxes, certainty just isn't part of life or investing.
Bid, Ask, And Size
When you enter an order to buy or sell a stock, you see the bid and ask for a stock and some numbers. What are the bid and ask, and what do those numbers mean? One, the bid, is what you need to know when you are selling a stock. The other, the ask (or offer) is what you need to know when you're buying. But you also need to know those numbers. Here's how it works:
If an investor looks at a computer screen for a quote on the stock of XYZ, it might look something like this: Last: 20 Bid: 20 Ask: 20 1/4 BSize: 12 ASize: 5. The translation: the stock of XYZ is being bid at $20 a share and offered at $20 1/4 per share. There are 1200 shares bid for and 500 shares offered. If you are looking to sell stock, now you know there is a firm willing to pay (that's the bid side of the market) $20 for your stock, and that you could sell at least 1200 shares of stock at that price. Those are the two parts of the bid side of a market on a stock: the price and the quantity of shares at that price.
If you are looking to buy XYZ stock, you would have to pay $20.25 and could buy at least 500 shares of stock. Again, there are two parts to the ask side of the market: the price at which you can buy stock and the amount of stock you can buy.
When you look at a quote for a stock, it's only good for the time at which you check it. The bid and ask and the sizes for each side change constantly. If you were to check back in two minutes and you'd like to sell your XYZ at $20, the $20 bid may not be there because the stock may have moved up or down in that time frame. So each time you trade, you'll need to check the bid and ask to see where your particular stock is trading.
Whenever you enter an online trade, a "live" quote will be shown so you'll know where the stock is trading and what to expect if you buy or sell your stock. However, be aware that the stock can move very fast and that you may not get the price shown on your screen. That's because by the time your order is sent to the floor to be executed, the bid and ask may have changed because there was an order that came in ahead of yours and wiped out the bid or offer. Then the stock moves to a new level and the bid and ask will be different from what your screen showed when you entered the order. This doesn't happen very often, but it does happen. And when investors enter their market orders (meaning they will buy or sell stock at the market, no matter where the market for the stock is), look at the bid or ask, and then see their execution price is different from the stock prices they saw, they have to realize that stocks can be very dynamic, sometimes changing just as their orders are entered.
Another bit of jargon: the words ask and offer are the same thing. This is the side of the market where investors can buy stock. So when you hear: Where's the stock offered? Or what's the "ask" on the stock? They're both asking the same thing.
The size of the market can help you decide on the timing of your purchase or the price. For example, if good old XYZ is trading at $20, and the bid size for the stock is 200 and the offer size is 5, that means there are 20,000 shares bid for and only 500 for sale (when you see the amount of stock bid for or offered, just multiply it by 100 for the actual amount of stock. If you see 999, that means there are at least 100,000 shares). If you're looking to buy the stock, you might want to get your order in quickly because if the buyer of the 20,000 shares gets excited and starts to buy all the stock around, no matter what the price, it will push up the price. On the other side of the trade, if you are a seller, you may want to wait a little while because that kind of size to buy suggests that maybe the price will be moving up if the buyer doesn't have patience and wants that XYZ stock NOW.
Of course, the buyer may not move from the $20 price, or may find another stock that is more attractive and buy that one instead. So you can't know with certainty what will happen with the stock's price. But then, except for death and taxes, certainty just isn't part of life or investing.
Neo,
Hitman's advice speaks for itself. It should be printed out and included with every new account application, it's that good.
I would never argue with Tony Oz, but I think Hitman and I agree that Bottom Fisher/Sky Scraper are tricky set-ups that require a good bit of trading ability. The reason is you are fading the main trend. Yes, a stock will tend to retrace after 3 or 4 days of consecutive moves, but you can get burned badly if it quickly reverts to the original direction. Hitman is a professional trader with enormous discipline, plus his managers are watching his trades. He will exit in a heartbeat if it turns sour on him. The average trader will say, let's just give it a bit more room, maybe it goes down tomorrow, etc. Next thing you know, you are toast.
Hitman's advice speaks for itself. It should be printed out and included with every new account application, it's that good.
I would never argue with Tony Oz, but I think Hitman and I agree that Bottom Fisher/Sky Scraper are tricky set-ups that require a good bit of trading ability. The reason is you are fading the main trend. Yes, a stock will tend to retrace after 3 or 4 days of consecutive moves, but you can get burned badly if it quickly reverts to the original direction. Hitman is a professional trader with enormous discipline, plus his managers are watching his trades. He will exit in a heartbeat if it turns sour on him. The average trader will say, let's just give it a bit more room, maybe it goes down tomorrow, etc. Next thing you know, you are toast.
AAA
But thats just the reason for my "overflooding" ET with my posts.
Could anyone name one or two setups that would be doable for a beginner AND have some shot in this market?
THX
P.S. I will however try with BF and SKY for now, If I cant get a grip for it after a couple of months Ill make the switch. THX gh1
But thats just the reason for my "overflooding" ET with my posts.
Could anyone name one or two setups that would be doable for a beginner AND have some shot in this market?
THX
P.S. I will however try with BF and SKY for now, If I cant get a grip for it after a couple of months Ill make the switch. THX gh1