Question about Steve Woods 2400% return

Steve

You write:

>>I like them turning over around every 15 to 40 days. <<

is it what You mean, once or more than once, the float turnover?
I am already on Your newsletter list (few month), therefore I am also listening to Your radio show.
I also, were listening to Your speach on the Tampa meeting last saturday.
I ordered Your book long ago , but I didnt get it yet. I live abroad, and I found out the problem. I should get it in the next 10 days.

best of luck Steve

eli
 
Steve, I would appreciate your thoughts on exits and position sizing (as well as stop losses) and how they fit into your analysis/trading. Thanks in advance
 
Dear Dufferdon,

Here's a bit of my book. It's from the chapter on support and resistance. It explains some of the basics of Float Analysis...

"The traditional view of a base of support in technical analysis is a sideways price consolidation area from which prices rise and which also offers support if the price drops back down to it.

In float analysis, a base of support includes this traditional view but also expands it in a new direction, so that a base of support is a constantly changing phenomenon that rises with a stock's price. Support then occurs when the float turnover is under the price; stated another way, a stock's price is supported when it is rising above its float turnover.

A strong base of support starts as a sideways price consolidation area but as the price rises, the base of support actually rises with it. More specifically, it rises underneath the price. Thus, when a stock's price is making a long upward move, the price will seemingly rise above the float. As new buyers bid the stock's price up, it becomes like a boat in a rising tide.

In like manner, the traditional view of an area of resistance is defined as a sideways price consolidation area above a stock's present price. This congestion area causes resistance to any upward move and acts as a ceiling through which prices must struggle. In float analysis it's this and more. Here, resistance is having the float turnover above the price.

This ceiling of resistance follows descending prices and acts against rising prices through a long declining move. Here the stock's price is like a boat going downstream with pressure coming from the float turnover that is above it.

Realize that float turnovers are dynamic and constantly changing. They can move from being a base of support to a ceiling of resistance and vice versa. Thus whenever a stock in a long-term price decline turns around and starts heading back up, its float turnover will change from a ceiling of resistance to a base of support.

And likewise, when a stock in a long price up-trend turns around and starts heading down, its float turnover will change from a base of support to a ceiling of resistance.

In addition, there is a strong tendency for stock prices to find support or resistance halfway through the float turnover price range. This mid-way point in the float turnover is an area of great power. During long upward or downward moves, a stock's price will inevitably go against the long-term direction for short periods of time. Stocks going up have short downward price corrections and stocks going down have short upward price retracements. A natural point of price reversal in this activity is the 50% level of the float turnover price range. The midway point acts like a fulcrum for the forces of supply and demand."

For a large sample of examples of these ideas, check out my book - The Precision Profit Float Indicator.
Chapter 4 p.93 - 119.

Best regards,

Steve Woods
FloatAnalysis.com
 
bringing this thread front and center. Every time this thread looks like it will go under, Steve Woods comes back quoting his book, bringing the thread back to the top.

Steve, you may be a good author, but what about your UNAUDITED RESULTS??

People, here's a man making unsubstantiated claims about his trading prowess, trying to sell books with, out of this world pretend returns.

To get any legitimacy, Steve, tell us your initial investment, and your returns, over a period OF YEARS, using your "float analysis".

Sam
 
Thanks for taking the time and trouble to give this description of your concept. It explains why some of your examples do not look like the traditional sideways consolidations.

Traditional concepts of support and resistance zones are explained by the reasoning that they represent areas where significant numbers of people made the wrong decision and who leap at the chance to reverse their mistake if and when price revisits the top (support) or bottom (resistance) of the trading range. Is there a similar psychological basis for your concept?

Why would support and resistance appear typically halfway back into the previous float turnover range? Is this similar to Fibonacci when that range is not a zone of traditional consolidation? I also have a hard time understanding the rationale for Fibs also BTW, so you are in good company :).

I am still having a hard time understanding why price range defined on the basis of one float turnover is more rational than price range defined by trading range (for consolidation) or range between significant intermediate high and lows (for a trending stock).
 
I guess I have brought it back up a time or two. I didn't start in September and I don't really remember much about you over the last year. If you don't like it too bad.

PS I appreciate the responses from Mr. Woods even if he doesn't address every detail.
 
Here's a man who has time to write a book, address questions here, but forgot to get his results audited?

Which part are you calling nonsense?

I think it's nonsense that he skirts the issue of his 2400% returns. And I'm not alone.

Of course he'll quote from his book to keep this thread alive, wake up.

What matters is his lack of forthrightness about his actual returns over a period of years, WHICH IS A NORMAL QUESTION TO ASK.
 
Dear Sam,

Although I fear that no matter what I say, you have labeled me and placed me in some corner of your mind reserved for the unscrupulous, I would first like to thank you for calling me a gentleman early on and defending my actions when I first began responding to questions. I have actually tried to respond to questions one at a time but I have to admit that I found it tough to keep coming back to this thread when a few tireless individuals seemed to be in attack mode.

If an apology is in order because I advertised "once" for one three hour lecture that I had in fact grown my most aggressive trading account 2400% in 17 months and did this without actually having verifiable results then please accept my apology.

Actually accept my thanks as your comments have gotten me to go over to that corner of my office in which old trading confirmation slips are piled higher than I care to admit and many are actually still in their envelopes and un-opened at that. I actually have pulled out the monthly statements and have started putting together this data because I recognize what a great thing it will add to my ability to speak to people about my work.

Now when I got to your comments a couple of postings back I didn't respond because you were once again asking about my initial investment and I had already confirmed that I had an account of a few thousand dollars at the beginning of the 2400% move.

Since it seemed you were not paying attention, I didn't read any more of your comment. I found myself exasperated because it felt as if you were not paying attention not only to my comment but also to Tymjr's when he initially quoted this statement early on in the thread.

You have continuously asked me to share my trading record and defend it with an accountant's verification. To this end let me say that although my trading record in the bull market was something to brag about, I can not brag about my results in the bear market.

Understand that it took me a long and hard time to figure out how to make money in up markets. My approach has been to intensely read and study those books that come most highly recommended and then jump in with real money. I have never been a paper trader as it seemed so artificial.

When I discovered the ideas that I developed into Float Analysis (which by the way came from W.D. Gann in his book Truth of the Stock Tape) I decided to see if I could just make money using these ideas alone and without the advice of brokers. Thus I never bought stocks on the recommendation of a broker and I have always done my own analysis.

In early 1998 I awakened to a powerful principle within the broader discovery of float analysis. Basically this principle is that multiple sideways float turnover bases of support are the most powerful bases from which prices will rise. I decided to test this in my own account by buying breakouts out of multiple turnover bases and at the same time playing a very high risk hand. By this I mean I took all the money I had (margined maximally) and put it into only one stock at a time if in fact it was breaking out of these newly discovered powerful bases.

If I saw another one of these powerful bases forming with an accompanied breakout, I would take my capital investment plus the cost of commissions out of the first position and then throw all the money I could at the next stock leaving my profits in the first stock to ride. By doing this over and over I had a group of "foot soldier" stocks that kept marching up with the general market and I always had my capital base plus margin to throw into the next stock that had this special float turnover look. In this way my initial capital of a few thousand grew 2400%. Stay with me now I'll get to some truly verifiable numbers.

Now when the bear market came, I saw it clearly in March of 2000 as my float indicators where giving screaming sell signals everywhere I looked. I then made the decision to learn how to short stocks. I approached this in the same manner that I had learned to make money in bull markets. I just jumped in giving it my best shot. Needless to say, having never had much practice, I lost a lot. As I'm sure you know, tuition in the stock market is always expensive. But I recently have discovered something that has turned that around and now as this bear market comes closer to its final days I feel more prepared than ever to do well no matter what kind of market we're in.

I believe though as Buckminster Fuller did that "I am a verb." Thus my love for being glued to the flow of quotes is no longer much fun. In fact I hate trading when its specifically day trading. Sitting in front of a screen like a tar baby is no longer fun. But what I do enjoy is finding a few good picks a week, sharing these with others and going long or short on occasion if something jumps out at me that I just have to trade.

Understand that in the bull mania I actually developed a rather manic lifestyle and it wasn't much fun.

So I no longer even call myself a daytrader although the tax man still puts that definition on me. Mostly I now like to take a position, put in a stop and then not worry about it. So I guess I'm more of a swing player. Since the beginning of September, I only made one trade.

All that I've said here applies to my most aggressive trading account. I traded a separate account much less aggressively and doubled my money over a few years and then got out near the top. That account has been mostly in cash ever since.

Something else to understand is one of my investing tactics. I think of my finances like a pyramid and I only trade what I can lose which is the very top of the pyramid. I also see the top of the pyramid as my learning capital.

Now in terms of my initial investment it was as I remember under $3,000 and 17 months later it hit $72,000 ($3,000 times 2400% = $72,000) Now before you get all hot and bothered realize that I was trading at Etrade and when you open your web page they tell you for that day where the account stands. So those are the numbers I remember and that is how I came up with the 2400%.

Now I have already stated that I didn't verify all this but I do have the confirmation and monthly statements so I have agreed to take them to an accountant. It can only help me so for this I am grateful for your persistence. I'm sorry if the process isn't going as fast as you would like but I have more happening in my life than the once a day process of looking at this thread and seeing the comments and trying to respond.

Understand also that the monthly statements don't accurately reflect the $3000 to $72,000 move because those numbers appeared on my screen in the middle of the month and not on the day the statements showed up in the mail.

Now the numbers on the monthly statements (which thanks to you I pulled out of their hiding place in my office) start at $3425.96 on Sept. 1, 1998 and stood at $40,344.40 on March 31, 2000. So this is a 1177% move but does not show the $72,000 that showed up on my screen as it was on one of the days intra-month.

So now all I have to do is organize all the daily trade statements and send them off to my accountant and the number I am confident will come in close to the 2400% as stated.

Now, in response to your statement that I am trying to keep this thread alive just to sell books let me ask you this. Imagine that you had taught elementary school for 10 years and never made much money. Then one day an aunt died who you thought didn't have any money and she left you a pile that you felt responsible to. So you went out and read every book on the stock market you could get a hold of and while you were a house-husband changing diapers through two kids you came across an idea in an old W.D. Gann book that took your breath away. Now suppose you ended up writing a book about that idea and the likes of Lawrence McMillan endorsed it and in a private conversation with Martin Pring he told you that you had discovered the key to understanding the stock market. Now let me ask you this, if this had happened to you, wouldn't you want to sell the book by answering people's questions about it.

Just so you know Sam, I'm not going to respond to your line of questioning any more concerning the validity of my work. You'll be the first to know when my accountant comes back with the results.

Make it a good day, Sam

Steve Woods
FloatAnalysis.com
 
Dear Mr. Woods,

Thank you for posting a detailed summary of your personal trading results using your Float Analysis system. I plan on ordering your book in the near future to learn more about what makes the indicator work. I have a few questions which I would be grateful for you to answer:

1. Could you please tell us what your approximate net return was between September 1, 1998, and September 28, 2001?

2. How much of the negative return that you endured during the recent bear market was attributed to your "tuition paid" during the learning process, and how much of that loss would we as subscribers to your system eliminate now that you have better developed your system?

3. Do you assign any stop or target levels for exiting the stock, or are these parameters left up to the subscriber to decide, which may vary the return from one subscriber to the next.

Thank you

Respectfully
 
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