Intermediate-term trading

[Steve Ladd]

Newbie here. I don’t want to buy-and-hold anymore. Nor day-trade. I want to buy stocks with low PEs (and underpriced commodity ETFs) when they start up-trending and sell them when they stop. I want my average holding period to be measured in weeks or months. That said, my three main issues seem to be:

1) How to build a watchlist of assets that I understand and show promise?

2) What buy signal is most appropriate? Price crossing over the 15-day MA? 20-day crossing over 40-day? Etc. (There are technical buy signals too, but I am more concerned with calibrating my MAs.)

3) When to sell? To spot a stalled uptrend should I look for a drop of X% below the high? Wait for price to fall below the X-day MA? Etc. How do I calibrate my signals to my preferred time frame?

BTW, Why is there no forum for intermediate-term trading?

 

[Handle123]

<<<BTW, Why is there no forum for intermediate-term trading?>>>

Cause the risk is the same for intermediate term as with long term, so I knew you being the average newbie of not wanting to spend 3 years studying and back testing and asking on this forum, you want to not arrive to the answers yourself. But here is huge advise, you are like no one else, and I could give you a pattern that make a ton of money for myself but then you do the same pattern and do nothing but lose. It takes much time to learn how to trade well, you have the have all the answers before the question.

You asking questions cause you have no answers, and you won't get answers until you do your own back testing. And for that matter you don't even have the right questions either, you get 4-5 chart books and not only read but study them.

I wonder if you even know what PE and low price means? Answering any of those questions will be a waste of time as you never be able to understand in depth the answers. Calibrating MA? What a crock, how about learning to adapt to what you have, unless you are doing tick studies so you can do HFT or semi HFT, recalculating recent averages is pointless as you staying in them longer. You have to learn chart reading like breathing, so you know when NOT to take a signal.

 

[kut2k2]

Price Action (PA), as Handle described it, is one way to go. Another way is using technical indicators. Neither will be a cake walk. Either one requires dedicated study. In particular, most indicators are worthless or close to worthless. That includes MA crossovers. So get experienced with backtesting. It's your best way to determining what works and what doesn't with regard to indicators. Good luck.

 

[Steve Ladd]

Price Action (PA), as Handle described it, is one way to go. Another way is using technical indicators. Neither will be a cake walk. Either one requires dedicated study. In particular, most indicators are worthless or close to worthless. That includes MA crossovers. So get experienced with backtesting. It's your best way to determining what works and what doesn't with regard to indicators. Good luck.

Other than the generic meaning of the phrase "study Price Action," what do you mean by that? As for back-testing, I will look for a book on it, but this can't become my full time job. I've been studying for months and was hoping for a let-up! Perhaps you think a non-professional shouldn't manage his own funds? I've been looking for a forum for do-it-yourself part-time trend followers and hoped this would be it.

 

[kut2k2]

I've been studying for months and was hoping for a let-up!

Are you kidding? It took me years --literally years-- to develop my current trading strategy. If you're ready to give up after mere months, then trading is not for you.

I am not a professional and that may be an advantage. I didn't come to trading with any preconceived ideas from the "professionals" at some business college about what "should" work and what "should not" work. I was free to explore all options. The option I chose was indicators over PA because I am not afraid of mathematics.

As far as backtesting, I chose the spreadsheet route. It was a challenge but the complete freedom I get from using a spreadsheet can't be beat by a canned trading program.

The easy days of reading about a random indicator in a book and successfully applying it are gone. These days the most successful indicator traders have rolled their own. There are a few book indicators that have profit potential but they are few and far between. Hence the need for backtesting all that you find interesting.

 

[Handle123]

Other than the generic meaning of the phrase "study Price Action," what do you mean by that? As for back-testing, I will look for a book on it, but this can't become my full time job. I've been studying for months and was hoping for a let-up! Perhaps you think a non-professional shouldn't manage his own funds? I've been looking for a forum for do-it-yourself part-time trend followers and hoped this would be it.

PA=chart reading, it fairly easy after several months to be able to read and memorize patterns from books to what you are seeing, but books only if best give you half of what is going on within a chart, that is where study and back testing ideas comes in. When I have mentored, I gave all same ongoing assignment, label each bar, which means actually have a name for each bar, it is not something you can do over nite or a week or even a year as you have to look in past to see if the bar you labeled reoccurs in same ways 300 sample size. The edge everyone talks about is ongoing as in beginnings of you learning to trade you think it is a signal, couple years later when you have tested hundreds of signals and find which work best for you, then you think something else is your edge and so on, I been at this nearly 40 years, so my edge is knowledge. In stocks when I started was 1978, so much has changed from speed to equipment to commissions, but not for the better for guys like you called "retail" cause you mainly pay brokers and trade smaller, you are trading against so many traders who have automation going and trading large sizes, where making money is a given and are striving for perfection. Many have enough in the bank beyond what is needed survive, but we love paying the game, and play it very well.

Non-professions should manage their own providing you know what you doing or people like me won't be happy till I take ever last dime to have and during the market, I will smile doing it. Unless you can do simulated trading & show after min of a year you made profits, real time will be like playing the roulette wheel at Vegas, come on 5.

You spend couple years studying charting and come back with starting a Journal of simulated trading, there people will say good and evil dialog, but you can get your questions answered by some of the brightest on the forum.

You might view comments as being cruel or you can see it more positive and many who lost early on cause of not being educated enough to save you from yourself. And most of us started part time and it grows to become more than full time.

Here is a question for you that is not in most charting book but what you should know. What has the stock market done the first year of a new President? He is operating on old President's budget, you think it will be up/down/sideways? Research.

 

[Steve Ladd]

Are you kidding? It took me years --literally years-- to develop my current trading strategy. If you're ready to give up after mere months, then trading is not for you.

I am not a professional and that may be an advantage. I didn't come to trading with any preconceived ideas from the "professionals" at some business college about what "should" work and what "should not" work. I was free to explore all options. The option I chose was indicators over PA because I am not afraid of mathematics.

As far as backtesting, I chose the spreadsheet route. It was a challenge but the complete freedom I get from using a spreadsheet can't be beat by a canned trading program.

The easy days of reading about a random indicator in a book and successfully applying it are gone. These days the most successful indicator traders have rolled their own. There are a few book indicators that have profit potential but they are few and far between. Hence the need for backtesting all that you find interesting.

Why do you distinguish indicators from price action? Indicators are mainly price based, to my knowledge. I must not understand your terms. And what sort of instruments do you trade, and at what frequency?

 

[Steve Ladd]

PA=chart reading, it fairly easy after several months to be able to read and memorize patterns from books to what you are seeing, but books only if best give you half of what is going on within a chart, that is where study and back testing ideas comes in. When I have mentored, I gave all same ongoing assignment, label each bar, which means actually have a name for each bar, it is not something you can do over nite or a week or even a year as you have to look in past to see if the bar you labeled reoccurs in same ways 300 sample size. The edge everyone talks about is ongoing as in beginnings of you learning to trade you think it is a signal, couple years later when you have tested hundreds of signals and find which work best for you, then you think something else is your edge and so on, I been at this nearly 40 years, so my edge is knowledge. In stocks when I started was 1978, so much has changed from speed to equipment to commissions, but not for the better for guys like you called "retail" cause you mainly pay brokers and trade smaller, you are trading against so many traders who have automation going and trading large sizes, where making money is a given and are striving for perfection. Many have enough in the bank beyond what is needed survive, but we love paying the game, and play it very well.

Non-professions should manage their own providing you know what you doing or people like me won't be happy till I take ever last dime to have and during the market, I will smile doing it. Unless you can do simulated trading & show after min of a year you made profits, real time will be like playing the roulette wheel at Vegas, come on 5.

You spend couple years studying charting and come back with starting a Journal of simulated trading, there people will say good and evil dialog, but you can get your questions answered by some of the brightest on the forum.

You might view comments as being cruel or you can see it more positive and many who lost early on cause of not being educated enough to save you from yourself. And most of us started part time and it grows to become more than full time.

Here is a question for you that is not in most charting book but what you should know. What has the stock market done the first year of a new President? He is operating on old President's budget, you think it will be up/down/sideways? Research.

If you’ll engage me I’ll gladly take your cruelty! You can probably teach me more than I can teach you, but I wouldn’t rule out the latter either. I’m not sure how to engage you, but here goes.

What do you mean, label a bar? What’s to label that isn’t already expressed in the bar‘s shape on the chart?

You ask, What has the stock market done the first year of a new President? I answer this without looking it up. The first year of a new president should be a good year. This year should be bad because 1) last year of a president, and 2) terrible "January effect". Probability-wise.

 

[Handle123]

If you’ll engage me I’ll gladly take your cruelty! You can probably teach me more than I can teach you, but I wouldn’t rule out the latter either. I’m not sure how to engage you, but here goes.

What do you mean, label a bar? What’s to label that isn’t already expressed in the bar‘s shape on the chart?

You ask, What has the stock market done the first year of a new President? I answer this without looking it up. The first year of a new president should be a good year. This year should be bad because 1) last year of a president, and 2) terrible "January effect". Probability-wise.

Am not mentoring more than I have, I am almost well after eight years, and I am going to bug out and travel. Then is a few years go into farming/ranching.

Some are inside bars, double inside bars, at exhaustion high with inside bars of that bar, lows are different, it is breaking down bars in relationships with itself and with other bars and with volume, and it takes a great deal of time as you have to look at thousands of charts and keep great stats. Just cause you see a bar and based on your current education says it is a "Spring", how do you know and over past so many years based on sideways action or slight upward motion, where is it a Spring or where/why does it fail? There is huge difference between studying a chart and programming a pattern.

Very wrong on new president and last year. People guess without researching and why so many lose as they often think they know more based on what is logical, but markets are geared to make most people think in these opinions and they lose.

http://www.investopedia.com/articles/financial-theory/08/presidential-election-cycle.asp
http://moneyover55.about.com/od/howtoinvest/a/electionmarket.htm

We all have different way to learn, I certainly know how to do it the wrong way in my youth, there is much for me to still learn on the markets and how I see what I learn within myself.

 

[Steve Ladd]

Am not mentoring more than I have, I am almost well after eight years, and I am going to bug out and travel. Then is a few years go into farming/ranching.

Some are inside bars, double inside bars, at exhaustion high with inside bars of that bar, lows are different, it is breaking down bars in relationships with itself and with other bars and with volume, and it takes a great deal of time as you have to look at thousands of charts and keep great stats. Just cause you see a bar and based on your current education says it is a "Spring", how do you know and over past so many years based on sideways action or slight upward motion, where is it a Spring or where/why does it fail? There is huge difference between studying a chart and programming a pattern.

Very wrong on new president and last year. People guess without researching and why so many lose as they often think they know more based on what is logical, but markets are geared to make most people think in these opinions and they lose.

http://www.investopedia.com/articles/financial-theory/08/presidential-election-cycle.asp
http://moneyover55.about.com/od/howtoinvest/a/electionmarket.htm

We all have different way to learn, I certainly know how to do it the wrong way in my youth, there is much for me to still learn on the markets and how I see what I learn within myself.

OK I got the presidential cycle wrong. All this time I thought this should be a bad year! Maybe it still will be.
Where can I learn more about bar labeling? Is there an author I can look up?
You write with a strong accent. Where you from? Don't tell me. Give me a clue based in history or geography.