You draw the trend line and then if a stock breaks it you exit? Have you consistently beaten the S&P? Because missing out on stocks “breaking out” means you’re likely stuck with an inferior bag…
TA question often asked... "Do trendlines work"?
- Thread starter Scataphagos
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Do you know? For example, I know that my hit rate is 65%… because I look at my trades and calculate win/loss (absolute pnl).
Yes. I'm a long only investor. I have a very simple strategy. I buy stocks that are going up and don't hold losers in my portfolio. I sell when the trend changes.
Yes pretty well for the last 20 years. I tend to underperform in a raging bull market but not by much. I'm on the sidelines when the market tanks.
I buy stocks that are breaking out (out of base to new high) and hold them until the trend changes.
Bottom fishing I wait for a break of the down trend and the start of a new up trend.
Cut losers and let the winners run. And yes I have been whipsawed and have sold stocks way to early. But I don't let a small loss turn into a big loss. FOMO is not a big thing for me.
Genuine query, if you were trading a speculative stock with no fundamentals (no earnings etc) and you were wanting to trade this instrument and not using trendlines, what would you use or do?
Ever heard of an s-1 or guidance?
The only stocks without “fundamentals” are scammy penny stocks…How does that work if you’re selling when a stock hits its trend line? Don’t you see how arbitrary that is?
Hmmmm, you can't trade in and out using S-1, but good try pulling my leg.Ever heard of an s-1 or guidance?
"The only stocks without “fundamentals” are scammy penny stocks..."
Whadaboud for xample upcoming producers like maybe lithium mining, they're not scammy penny's although some may be.
So back to my question, if you're not using trendlines, what are you using?
If you're actually interested I'll show you. Give me a real ticker.Hmmmm, you can't trade in and out using S-1, but good try pulling my leg.
"The only stocks without “fundamentals” are scammy penny stocks..."
Whadaboud for xample upcoming producers like maybe lithium mining, they're not scammy penny's although some may be.
So back to my question, if you're not using trendlines, what are you using?
I don't see it as arbitrary at all. It's a reason to close the trade. For what ever reason the price has stopped rising. Someone smarter than me has done the research and has valued the stock at less than it has been trading for. I don't need to hold if the price is declining. Once I'm in cash there is no risk.
I need a reason to sell. Breaking a trend seems to be a reasonable reason. I don't need to know why a stock is moving. I can't possibly know why. So I protect my capital and move on.