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Swing trading
- Thread starter swtrader
- Start date
IMO,
http://finance.yahoo.com/q?s=KKD&d=c&k=c3&a=ss&p=m50,m200&t=1y&l=on&z=m&q=c
The stock slipped from bullish to bearish trend in about February 02.
Support had been 50dma, but then slipped to the 200dma.
The 50 and 200dmas converged until mid/end of June 02 when 200dma support failed, and shortly afterward the 50/200 crossed.
In the last month, the 50dma has provided weak resistance, which failed to hold, and then it was contained by the 200dma resistance.
The 200dma resistance was tested recently, and held on the first test
Current situation is a test of 50 dma (now support) and 200dma (still resistance)
Could bounce in between these lines, but a break of 50 dma confirms bearish trend.
That's my take anyway.
http://finance.yahoo.com/q?s=KKD&d=c&k=c3&a=ss&p=m50,m200&t=1y&l=on&z=m&q=c
The stock slipped from bullish to bearish trend in about February 02.
Support had been 50dma, but then slipped to the 200dma.
The 50 and 200dmas converged until mid/end of June 02 when 200dma support failed, and shortly afterward the 50/200 crossed.
In the last month, the 50dma has provided weak resistance, which failed to hold, and then it was contained by the 200dma resistance.
The 200dma resistance was tested recently, and held on the first test
Current situation is a test of 50 dma (now support) and 200dma (still resistance)
Could bounce in between these lines, but a break of 50 dma confirms bearish trend.
That's my take anyway.
also, trendline of lower highs. Surprisingly, the OBV (on balance volume, and accumulation/distribution did not give good signals. Looking at many of the financial stocks, and S & P stoks, these signals were loud as a bell.
I just used KKD as a charting example, because that chart illustrated the "multi indicator" concept, ie, how just looking at one indicator or strategy failed to tell the whole story.
As a trading stock, it is too heavily shorted and small enough cap that it can be illiquid for getting shares to short etc. Also, it is a cult stock. These factors can make it a target of manipulation.
I just used KKD as a charting example, because that chart illustrated the "multi indicator" concept, ie, how just looking at one indicator or strategy failed to tell the whole story.
As a trading stock, it is too heavily shorted and small enough cap that it can be illiquid for getting shares to short etc. Also, it is a cult stock. These factors can make it a target of manipulation.
Originally posted by swtrader
Mr. Roboto,
Thanks for your insights, it seems your goals and temperment are similar to mine.
I have examined TC2000, and ordered it. I was surprised to find it was free, with just a $30 data feed - I am paying about $60 for Metastock, which I really don't use. I'm sure that people can make money off of Metastock, but it seems to use singular strategies and generates "black box" signals.
I want a plan where I can incorporate ANY reason to close or open a trade, based on any and all indicators I trust.
For instance, take KKD Krispy Kreme. You could do reasonably well with slow stochastics on this one BUT, if you were not watching the 50 and 200dma, you were not aware of what was really going on (IMO)
(I am using YHOO charts here, since not everyone has the full stockcharts service)
http://finance.yahoo.com/q?s=KKD&d=c&k=c3&a=ss&p=m50,m200&t=1y&l=on&z=m&q=c
Also, on many of the financial stocks last month, stochastics, moving averages and stop losses would not have signaled "close the shorts", but the overall VIX (black candle at top of vix) said "close ALL shorts NOW!!". A market indicator not even appearing on the individual charts.
Does TC2000 support fairly custom searches, as well as multiple indicator combinations?
Is it compatable with the examples above?
I responded to this post earlier, but my response seems to have "vaporized", so I'll try to say it again......TC2000 does allow you to customize your search/scans pretty well. Whether it will do exactly what you need, only you can evaluate. The service is cheap, so you have liitle to lose by giving it a try. (I have absolutely NO connection to TC2000, other than having been a customer for about 4 years) It certainly fits my needs. I mainly look at price and volume, with a couple of moving avg's thrown in for fun.
I will say, IMO, that in my fair amount of experience with designing/testing/trading systems, that by far the best, most robust methods incorporate only 1-3 indicators, MAX. Perhaps this doesnt apply to you, but newer traders always use too many indicators. They experience a few losses, and then layer a couple of more indicators onto their selection process, in a misguided attempt to filter out any more losing trades. An absolute necessity to successful trading is to accept your losers as an unavoidable part of the process. If you are selecting trades using 5,6,7, or more indicators, the chances are quite high that your method will not work well in a changing market. I once designed a system with several indicators. I tested it with a year's data. The good news was, the system had absolutely NO losing trades for the year. The bad news was, the system only produced ONE trade all year. It just happened to be a winner. My point is, you can make a futile effort to eliminate as many losers as possible from your trades, but in doing so you are almost certain to reduce the number of trades you take so much that your bottom line is less than if you took a lot more trades with a fair mix of losers.
I bet no one predicted that huge gap down today. Anyone long on Friday morning could have some profit left by the end of the day and have the account in the red just at the open today. If you keep it a little longer praying the gap would be filled, well, you would have lost even more. None of the gaps of the 25 stocks I followed was filled today. This is what I meant by swing traders not having control over their trades. Of course, if you were short, you are probably smiling right now and taking everyone you know to diner tonight.
Originally posted by swtrader
I am a former buy and hold investor who converted to trading a year ago (for obvious reasons). I have substantial capital to invest, but conventional wisdom in investing during a bear market is basically putting your cash into a roaring fireplace. I have reached a conclusion that trading, for all it's risks, is the only way to be involved in the market for the foreseeable future. ...
swtrader:
I would not wish day trading on my worst enemy. I continue because it suits me... barely. Trading is the absolute hardest thing I've ever done in my life. If you haven't done so already, I urge you to consider "sophisticated investing strategies" instead. especially if your goal in income generation.
If I were as well funded as you (guessing) I would not trade. Rather I would implement bear-call bull-put spreads to generate income. By most accounts, much safer.
swtrader,
I think you are receiving some generally good advice here. Daytrading is more of a lifestyle, either it suits you or it doesn't. From what you have written, I'm guessing it's not for you. You have substantial funds, so your objectives should be (1) hang on to what you have at all costs, (2) generate a level of return commensurate with the risks you are comfortable taking.
You seem to know a fair amount about indicators and such, but what you don't know could cost you big. You could spend some worthwhile time getting up to speed on www.wealth-lab.com and doing some serious testing to discover what works and what doesn't.
My advice is take the bulk of your funds and put them aside in short term instruments. Whne you have demonstrated with real money that you can make money, then you can cautiously commit additional funds, or not as you choose.
I agree with jboydston's suggestion that credit spreads in the options market make sense for you. This is a countertrend approach where you are betting that market momentum peters out or reverses. Typically you would hold trades for two or three days. For an in depth explanation, study Natenberg, "Options Volatility and Pricing."
I think you are receiving some generally good advice here. Daytrading is more of a lifestyle, either it suits you or it doesn't. From what you have written, I'm guessing it's not for you. You have substantial funds, so your objectives should be (1) hang on to what you have at all costs, (2) generate a level of return commensurate with the risks you are comfortable taking.
You seem to know a fair amount about indicators and such, but what you don't know could cost you big. You could spend some worthwhile time getting up to speed on www.wealth-lab.com and doing some serious testing to discover what works and what doesn't.
My advice is take the bulk of your funds and put them aside in short term instruments. Whne you have demonstrated with real money that you can make money, then you can cautiously commit additional funds, or not as you choose.
I agree with jboydston's suggestion that credit spreads in the options market make sense for you. This is a countertrend approach where you are betting that market momentum peters out or reverses. Typically you would hold trades for two or three days. For an in depth explanation, study Natenberg, "Options Volatility and Pricing."