Please teach me.

Evolution88 · Mar 23, 2012

Hi everyone

I feel I've hit a plateau in my trading. I'm still new to trading, having started a virtual portfolio in 2012.

In simplistic terms, from Jan to Feb alone, I realised 8% looking mainly for stocks that were oversold and going upwards.

Then in March I lost most of it as stocks that I thought were oversold went down further and stocks that I thought were overbought went up (triggering my stops) before going down. I'm not thinking my stops are too tight mainly coz I was alright when buying oversold stocks.

QUESTIONS:

1) Any suggestions what I should be learning next? (In Alexander Elder terms I'm thinking more about Methods because I reckon I'm alright in terms of Mind and Money Management.)

2) Do old methods from the 80s and 90s (e.g. candlesticks) still work? Along with the overbought indicators, the candlesticks tell me the stocks are going down but then that doesn't quite happen.

3) If by any chance there are Singapore technical traders out there that want to learn and share notes I'd be more than happy to meet up.

nazzdack · Mar 23, 2012

Quote from Evolution88:
----plateau....
----virtual portfolio....
----realised 8%....
----lost most of it....
----stocks that I thought were oversold went down....
----stocks that I thought were overbought went up....
----suggestions....
----old methods....
----candlesticks tell me....

1) You're relying on random/inconsistent indicators. They "work" when they "work" and don't when they don't. :eek:

2) Instead of being a counter-trend trader, focus more on trend-following so you avoid the "trap" of getting runover by bulldozers & freight trains and you give your trades more upside potential.

Laissez Faire · Mar 23, 2012

The only advice I can offer right now as I`m leaving in a hurry is to erase the concept of overbought and oversold from your trading vocabulary.

Markets go up until people stop buying and they go down until people stop selling. Often, that is a lot further than people think, hence people blow up all the time trying to pick tops or catch falling knives.

trade4ever2day · Mar 23, 2012

Quote from Evolution88:

1) Any suggestions what I should be learning next? (In Alexander Elder terms I'm thinking more about Methods because I reckon I'm alright in terms of Mind and Money Management.)

Price action.

Quote from Evolution88:

2) Do old methods from the 80s and 90s (e.g. candlesticks) still work? Along with the overbought indicators, the candlesticks tell me the stocks are going down but then that doesn't quite happen.

They work for those that know how to use them properly.

Quote from Evolution88:

3) If by any chance there are Singapore technical traders out there that want to learn and share notes I'd be more than happy to meet up.

There are people from Singapore here. I have met a few but do not recall the names.

This a very informative article about the prospects of technical trading. A must read IMO: http://t.co/bAs5mOZ2

Good luck to you.

bone · Mar 23, 2012

Quote from Evolution88:

In simplistic terms, from Jan to Feb alone, I realised 8% looking mainly for stocks that were oversold and going upwards.

Then in March I lost most of it as stocks that I thought were oversold went down further and stocks that I thought were overbought went up (triggering my stops) before going down.

Why don't you share with us the oscillator or wave count study you were using, as well as the timeframe. Note that I am making an educated assumption about what type of study you were using.

Paddler · Mar 24, 2012

Browse through ET's Education Resources section, you should find some good methods on trading stocks. There are experts sharing their ideas in other sections too.

You sounds like very TA oriented and rely on indicators. Nothing wrong with indicators but you have to know why and they better work all of the time.

Have you thought through your stock selection criterion and learned from the experts? There are some Qualitative Analysis ideas you can use.

Have you thought through your trading time frame in the context of bigger picture? Are you trading intraday, short-term trading or mid-term trading?

Why would people teach you?

Do your search and asking for a good method and then learn about it with both hard work and critical mind. I recommend Jack Hershey's equity method. But many others may not agree. It has several versions that could cause hell in the learning process. Good luck.

Handle123 · Mar 24, 2012

For a long term approach to stocks, I only trade using weekly charts and the Dow 30. They are optionable and if I want to do counter-trend after a long move down, I can buy the stock and buy a put to keep a week to see if stock going to go up, once it starts trending nicely, find places to add on after small retracements. I stopped doing daily charts for long term back in the 80's. Daily charts are more in IMO for swing trading, why stay in a trade for a few days when you can stay in much longer and collect on all the gaps. Using weekly charts, spend much less time and use that time to study more Price Action.

And learn about Spreading !!!

bwolinsky · Mar 24, 2012

Quote from Paddler:

Browse through ET's Education Resources section, you should find some good methods on trading stocks. There are experts sharing their ideas in other sections too.

You sounds like very TA oriented and rely on indicators. Nothing wrong with indicators but you have to know why and they better work all of the time.

Have you thought through your stock selection criterion and learned from the experts? There are some Qualitative Analysis ideas you can use.

Have you thought through your trading time frame in the context of bigger picture? Are you trading intraday, short-term trading or mid-term trading?

Why would people teach you? Do your search and asking for a good method and then learn about it with both hard work and critical mind. I recommend Jack Hershey's equity method. But many others may not agree. It has several versions that could cause hell in the learning process. Good luck.

To the OP: DO NOT WASTE TIME RESEARCHING JACK HERSHEY'S METHOD, as there is no code and you'll only find a whole mess of infernal nonsense and hype!

Create custom indicators with no extremum values, optimize, and re-do periodically.

The market can be summed into 4 oscillations, higher lows, lower highs, breach lower lows and higher highs. And that's it. Creating algo's based on that are going to be way more robust than anything you'll find publicly.

beginnerjohn · Mar 24, 2012

+ 1 !
so true bwolinsky.

best
john

Quote from bwolinsky:

To the OP: DO NOT WASTE TIME RESEARCHING JACK HERSHEY'S METHOD, as there is no code and you'll only find a whole mess of infernal nonsense and hype!

Create custom indicators with no extremum values, optimize, and re-do periodically.

The market can be summed into 4 oscillations, higher lows, lower highs, breach lower lows and higher highs. And that's it. Creating algo's based on that are going to be way more robust than anything you'll find publicly.

ocean5 · Mar 24, 2012

Quote from bwolinsky:

To the OP: DO NOT WASTE TIME RESEARCHING JACK HERSHEY'S METHOD, as there is no code and you'll only find a whole mess of infernal nonsense and hype!

Create custom indicators with no extremum values, optimize, and re-do periodically.

The market can be summed into 4 oscillations, higher lows, lower highs, breach lower lows and higher highs. And that's it. Creating algo's based on that are going to be way more robust than anything you'll find publicly.

Yeah, sure,so true!But how would you know breaching LL or HH was not right after your enter?

And how do you determine the peak or trough having no extremum value indicator?You are in the open space here.

What a bolls!