Registered User
Joined: 9/8/2009
Posts: 13
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Hello to all:
I am still not a member and I am thinking of becoming a member. I will more than likely use the StockFinder software versus its legacy TeleChart.
Now how do you guys go about picking stock winners?
I know how to write code and the luckilyhood for me creating my own indicator in the near future with StockFinder application are predictable.
What do you guys suggest? What sets of indicator other than price, volume, and Fibs do you use to pick stock winners?
I am a freshman with 4 to 5 months of experience trading. But I am a quick learner.
I have been trading lately with MDZ, SIRI, GE, BAC, FAS/FAZ, IMMR, NVAX, HEB, FNM, and VG (when it popped 200% lucky me but also because I am a customer).
I would love to learn from you guys with much more experience.
What are some of the most awesome things you guys achieved?
Looking forward to join the team!
Yama
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Registered User
Joined: 8/19/2009
Posts: 170
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entry is only half the trade
you also have to consider money management and risk management
losses are predictable.. gains arent
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Registered User
Joined: 1/30/2009
Posts: 267
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Yama in Japanese means mountain. Just thought I would throw that useless piece of information in there.
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Registered User
Joined: 7/7/2009
Posts: 15
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QUOTE (intothetrade) entry is only half the trade
you also have to consider money management and risk management
losses are predictable.. gains arent
I can't emphasize this quote enough. Trading is unlike anything else in life and goes against every innate human characteristic when experiencing pleasure or loss, considering risks, etc.
You should be more concerned with limiting losses than expecting huge gains. In other words: You should be more concerned if your brakes work opposed to worrying about how fast your vehicle can go. If you intend to change investment vehicles rather frequently you better ensure of this first and take notice when that vehicle is low on gas.
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Registered User
Joined: 8/19/2009
Posts: 170
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QUOTE (rlschapman) Trading is unlike anything else in life and goes against every innate human characteristic when experiencing pleasure or loss, considering risks, etc.
i just had to point this one out.. its big for novice traders...
this is also why i suggest backtesting doesnt work...
what happens is you get wrapped up in a trade psychologically.. a lot of people come up with backtests that look great - win more than lose and profits are bigger than losses. but then you actually execute the trade in real life and there are a ton of outside factors which cause people to act out in the wrong way at the wrong time.
what happens especially to a lot of beginners is they put in a trade, it works in your favor then suddenly turns against you, you react by going in an opposite trade and beating down your account as it continues going in the original direction or you dont cut your losses and it piles up or more commonly.. you begin altering your strategy in one way or another - whether it be entry, stops, or start taking extremely small profits where even if you are correct more often than wrong, youre losses are bigger than the profits
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Registered User
Joined: 2/19/2008
Posts: 193
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Yama i am new to this forum too and consider myself a novice trader. Although I've been trading for awhile the first few years I was on my own and made many mistakes. The biggest one was not paying attention to risk management. Now I never go into a trade without a condition/stop loss placement.
I found Telechart through a class I took with Technitrader. It was invaluable.
I am studying the TD profile right now and what is called 'dragons' by this forum. I am having better success with this than I have had with anything. Market is cooperating so we will see. Take a look.
http://forums.worden.com/default.aspx?g=posts&t=27805
Jean/Sail
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Registered User
Joined: 10/7/2004
Posts: 426
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QUOTE (intothetrade) QUOTE (rlschapman) Trading is unlike anything else in life and goes against every innate human characteristic when experiencing pleasure or loss, considering risks, etc.
i just had to point this one out.. its big for novice traders...
this is also why i suggest backtesting doesnt work...
what happens is you get wrapped up in a trade psychologically.. a lot of people come up with backtests that look great - win more than lose and profits are bigger than losses. but then you actually execute the trade in real life and there are a ton of outside factors which cause people to act out in the wrong way at the wrong time.
what happens especially to a lot of beginners is they put in a trade, it works in your favor then suddenly turns against you, you react by going in an opposite trade and beating down your account as it continues going in the original direction or you dont cut your losses and it piles up or more commonly.. you begin altering your strategy in one way or another - whether it be entry, stops, or start taking extremely small profits where even if you are correct more often than wrong, youre losses are bigger than the profits
Your distaste for backtesting leads me to believe that you do not understand or know how to use this very powerful tool. Developing a methodical system and then trying to trade that system by the seat of your pants as your post suggests is not what backtesting is about.
A methodical system is better suited for automated trading (short time frame) or a disciplined trader (long time frame).
Trading by the seat of your pants requires quick decisions that rely on knowledge of past experiences and using technical analysis that is relying on past history, in order to predict its future. Saying that you can't rely on backtesting equates to saying you can't rely on technical analysis. The learning process takes many years to become a seasoned trader and learn what does "not" work and what does work in a trending market and a non trending market.
And I cannot think of a better teacher than backtesting to take many years off that learning curve.
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Registered User
Joined: 8/19/2009
Posts: 170
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then explain why all of these people who backtest a system still fail?
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Registered User
Joined: 12/31/2005
Posts: 2,499
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QUOTE (intothetrade) ....
...
this is also why i suggest backtesting doesnt work...
.
what happens is you get wrapped up in a trade psychologically.. a lot of people come up with backtests that look great - win more than lose and profits are bigger than losses. but then you actually execute the trade in real life and there are a ton of outside factors which cause people to act out in the wrong way at the wrong time.
..
...
That statement is equivalent to saying GPS Navigation systems don't work.
If you don't follow the directions provided and think you know a shortcut well of course you will get lost.
The same holds true for backtesting. A solid strategy, (what tht is is open to debate, granted) derived and confirmed via backtesting is only good if you trade the strategy that was backtested. Instead of claiming it is backtesting not working, you should be saying that the lack of discipline required to effectively trade a system derived by backtesting, or any system for that matter is at fault.
It is lack of discipline not the failue of backtesting the contributes to lack of success.
It is
Plan the Trade --- Trade the Plan
not
Plan the trade --- adjust accordingly, based on whatever...
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Registered User
Joined: 10/7/2004
Posts: 426
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"then explain why all of these people who backtest a system still fail?"
Your wording leaves a lot to be desired.
Why don't hens pi$$
I and all of my trading friends backtest. We are all successful.
Others will have to speak for themselves.
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Registered User
Joined: 12/31/2005
Posts: 2,499
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'cause their chicken?
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Registered User
Joined: 10/7/2004
Posts: 426
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Nah.....they eat with their peckers
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"then explain why all of these people who backtest a system still fail?"
---------------------------------------------------------------------------------
Oh, so all traders were 100% profitable before the availability
of backrest software? Its that darn software that turned great
traders into losers?
All the availability of new products has given us is new crutches to blame.
Funny, the trader with a failed trade who just looks at price and volume.
Does he ever say: price and volume are broken?
(sounds silly)
Well Im off to the video store to buy a "Play Better Golf" DVD.
(If it doesn't make me Tiger Woods I will sue the company)
Thanks
diceman
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Registered User
Joined: 8/7/2009
Posts: 1
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QUOTE (jas0501)
QUOTE (intothetrade) ....
...
this is also why i suggest backtesting doesnt work...
.
what happens is you get wrapped up in a trade psychologically.. a lot of people come up with backtests that look great - win more than lose and profits are bigger than losses. but then you actually execute the trade in real life and there are a ton of outside factors which cause people to act out in the wrong way at the wrong time.
..
...
That statement is equivalent to saying GPS Navigation systems don't work.
If you don't follow the directions provided and think you know a shortcut well of course you will get lost.
The same holds true for backtesting. A solid strategy, (what tht is is open to debate, granted) derived and confirmed via backtesting is only good if you trade the strategy that was backtested. Instead of claiming it is backtesting not working, you should be saying that the lack of discipline required to effectively trade a system derived by backtesting, or any system for that matter is at fault.
It is lack of discipline not the failue of backtesting the contributes to lack of success.
It is
Plan the Trade --- Trade the Plan
not
Plan the trade --- adjust accordingly, based on whatever...
Just an observer trying to learn a thing or two… Good morning all, I'm a new guy to the forum and have been reading posts on and off for just a few weeks. Being a financial advisor who is decent at long term planning / portfolio management stuff but absolutely embarrassingly horrible when it comes to shorter term trading and technical analysis, I have really enjoyed what some have to say and have already learned a few things.
My question is, why do some choose to call out and pick on some of the others? Some of you seem extremely bright, have obviously earned your respective stripes, and are good enough to spend enormous amounts of time giving OTHER PEOPLE free and seemingly good advise, I don’t get the one upmanship stuff.
For those who have been and seem to continue being generous with your time and thoughts, thank you, for those of you that feel the need to enlarge your ego at someone else’s expense, please can it. Some of us would prefer to learn a few things with the hope of giving a bit back sometime in the future.
Regards,
MR
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Worden Trainer
Joined: 10/7/2004
Posts: 65,138
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matthewruby,
I share your distaste for the one upmanship, calling out (I hope you don't see this as calling out as that is not my intent) and picking on others that happens all too frequently. That said, I don't think the quoted text is a particularly good example (unfortunately, there are way too many good examples available in other topics).
Both intothetrade and jas0501 would appear to be making valid points and not attacking each other. While intothetrade is pointing out that backtesting doesn't work because emotions get in the way, jas0501 is pointing out that if you are letting emotions get in the way, you aren't actually trading based on the backtesting. Both points of view would seem to provide useful insights to other readers.
-Bruce
Personal Criteria Formulas
TC2000 Support Articles
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Registered User
Joined: 12/31/2005
Posts: 2,499
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QUOTE (matthewruby) QUOTE (jas0501)
QUOTE (intothetrade) ....
...
this is also why i suggest backtesting doesnt work...
.
what happens is you get wrapped up in a trade psychologically.. a lot of people come up with backtests that look great - win more than lose and profits are bigger than losses. but then you actually execute the trade in real life and there are a ton of outside factors which cause people to act out in the wrong way at the wrong time.
..
...
That statement is equivalent to saying GPS Navigation systems don't work.
If you don't follow the directions provided and think you know a shortcut well of course you will get lost.
The same holds true for backtesting. A solid strategy, (what tht is is open to debate, granted) derived and confirmed via backtesting is only good if you trade the strategy that was backtested. Instead of claiming it is backtesting not working, you should be saying that the lack of discipline required to effectively trade a system derived by backtesting, or any system for that matter is at fault.
It is lack of discipline not the failue of backtesting the contributes to lack of success.
It is
Plan the Trade --- Trade the Plan
not
Plan the trade --- adjust accordingly, based on whatever...
Just an observer trying to learn a thing or two… Good morning all, I'm a new guy to the forum and have been reading posts on and off for just a few weeks. Being a financial advisor who is decent at long term planning / portfolio management stuff but absolutely embarrassingly horrible when it comes to shorter term trading and technical analysis, I have really enjoyed what some have to say and have already learned a few things.
My question is, why do some choose to call out and pick on some of the others? Some of you seem extremely bright, have obviously earned your respective stripes, and are good enough to spend enormous amounts of time giving OTHER PEOPLE free and seemingly good advise, I don’t get the one upmanship stuff.
For those who have been and seem to continue being generous with your time and thoughts, thank you, for those of you that feel the need to enlarge your ego at someone else’s expense, please can it. Some of us would prefer to learn a few things with the hope of giving a bit back sometime in the future.
Regards,
MR
Not sure why this is directed at me. Maybe it is the large bold font for emphasis? I didn't attack anyone personally, I was just pointing out that backtesting is not at fault for someone failing to succeed at trading.
Please clarify how you think I am picking on anyone. This is just a healthy civil discussion and I am taking the side of defending backtesting as a very viable tool.
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Registered User
Joined: 8/19/2009
Posts: 170
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okok let us all go in peace :P
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Registered User
Joined: 10/7/2004
Posts: 426
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QUOTE (intothetrade) okok let us all go in peace :P
Not until you say uncle ;P
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Registered User
Joined: 1/28/2005
Posts: 6,049
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There's something else I want to point out.
For traders who don't like indicators.
For traders who don't like backtesting.
What do you use?
At the open do you watch the tradescreen with amnesia?
Do you say I have no knowledge of the past.
I have no knowledge of the day before.
Its all new to me.
I've never seen this before.
The truth is we all backtest.
If you aren't using an actual computer then your using the one
between your ears.
It doesn't change the fact that our knowledge and experience
are a backtest.
If you say "I don't" use indicators. When you placed
you last trade. Why did you buy? Why did you buy at that moment?
Since you trade with "nothing" why didn't you place the order an
hour before, or an hour later?
Now maybe you don't add up the last 10 days and divide by 10 (10SMA)
but when you say this has happened before and that has happened before
and I know from experience(backtesting) its favorable to place a trade.
You are using an indicator. (its just not MACD)
(otherwise your trade can take place any moment at random)
intothetrade,
when you placed a previous list of your stock picks someone asked:
"What scan did you use to find them?"
You replied something to the effect: "None I don't like them or believe in them".
Well it may be true that you didn't run a "scan" to find those picks
but I also notice your not trading 75 cent biotech stocks that trade
10,000 share a day.
The truth is filtering and screening did happen. It was just between your ears
and with your mind.
The simple truth is:
We all scan.
We all us indicators.
We all backtest.
Just some either don't like to admit it or don't realize they are doing it.
Otherwise we'd be a blank slate when the opening bell rings.
(although I will admit to being guilty of that on occasion)
Thanks
diceman
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Registered User
Joined: 8/19/2009
Posts: 170
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i have no knowledge of the past :D
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Registered User
Joined: 6/6/2005
Posts: 1,157
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this is also why i suggest backtesting doesnt work...
I have to ask myself, if I say backtesting doesn't work, what is it that I believe backtesting should do? Maybe that's the disconnect here...
Backtetsing is not the same as system design. And both are not the same as trading. Learning how to backtest will still require that I know how to design a system. System design will still require that I learn how to trade. They are all different things.
Backtetsing: seeing how current trading ideas worked in the past.
System design: putting together trade components, entry, exit, stop-loss, money management, to maxamize backtetsing results in the most profitable manner.
Trading: placing capital at risk on a trade idea with a higher (or lower) perceived future value.
No matter what you do, eventually you are going to have to (emotionally) learn to place capital at risk and to manage that risk through position sizing, system design, backtesting, or discretinary trading based on experience.
To say that backtetsing doesn't work is to assume that backtesting has the ability to make someone a winning trader which it does not.
David John Hall
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Registered User
Joined: 8/19/2009
Posts: 170
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i mean to say that backtesting doesnt work in regards to building on them because not everyone can follow the system... it could be useful for some things but in the ends its all psychological
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Registered User
Joined: 12/31/2005
Posts: 2,499
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QUOTE (intothetrade) i mean to say that backtesting doesnt work in regards to building on them because not everyone can follow the system... it could be useful for some things but in the ends its all psychological \\
using the same logic, parachutes don't work because not everyone can pull the ripchord...
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Registered User
Joined: 10/7/2004
Posts: 426
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Well we've got him surrounded and tried logic but he still will not say "uncle".
Maybe we should just let him go in peace. :)
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Registered User
Joined: 10/7/2004
Posts: 2,181
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OK, back to the discussion at hand....
Yama, I say this not to be unkind, but my strongest possible warnings to you. The question you have asked begs of one waiting to be separated from his money.
Now before someone who does not know me or my ways suggests that I am being derogatory or condescending, let me tell you that I lost 6 digits to the left of the decimal in the markets before I learned how to make money.
If anyone has the battle scars to qualify to warn others, I believe I do. Please be on guard, my friend, there is much to learn.
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Registered User
Joined: 8/19/2009
Posts: 170
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QUOTE (Booker)
Well we've got him surrounded and tried logic but he still will not say "uncle".
Maybe we should just let him go in peace. :)
monkey! 
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Registered User
Joined: 2/19/2008
Posts: 193
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Registered User
Joined: 2/19/2008
Posts: 193
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I challenge you guys to stick to the subject! Maybe you could start a new thread on backtesting, or call it venting, but having this topic come up in every thread is frustrating to me.
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Registered User
Joined: 7/1/2008
Posts: 889
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forget it, sailnadream. it's like asking a NYC taxi driver to stay in one lane.
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Registered User
Joined: 2/5/2006
Posts: 1,148
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QUOTE (intothetrade) QUOTE (Booker)
Well we've got him surrounded and tried logic but he still will not say "uncle".
Maybe we should just let him go in peace. :)
monkey!
i agree with intothetrade, if the majority of traders expect the market or a stock to act a certain way, often the opposite happens.
however, that doesn't mean that certain setups can't occur over again.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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" monkey! "
I never knew you were into Baccarat.
Thanks
diceman
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Registered User
Joined: 2/13/2005
Posts: 368
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QUOTE (hiromj) Yama in Japanese means mountain. Just thought I would throw that useless piece of information in there.
Yama is also how you pronunciate "llama" in South America.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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Yama
One of the mistakes is not "just pick winners".
You have to also define what you are.
Someone looking for breakouts is looking for something
different than someone looking for pullbacks.
Will I hold a stock for 2 days or will I hold it for weeks?
Will I trade trend or counter trend?
Thanks
diceman
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Registered User
Joined: 9/8/2009
Posts: 13
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QUOTE (hiromj) Yama in Japanese means mountain. Just thought I would throw that useless piece of information in there.
I knew someone somehow and somewhere would have brought that up. That just happened to be here. Thanks for bringing it up. Though I do not know Japanese I know my name mean amny thinks in many different languages and you are right in Jap it means Mountain.
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Registered User
Joined: 9/8/2009
Posts: 13
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QUOTE (tobydad) I lost 6 digits to the left of the decimal in the markets before I learned how to make money.
I place my order with Stop Losses and Limit orders... I like to be in control. Of course the damage can happen if something goes bad with stock and in a single day you see a huge drop all at once... That could definetely be a killer! _// \\_
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Registered User
Joined: 9/8/2009
Posts: 13
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QUOTE (thekubiaks) QUOTE (hiromj) Yama in Japanese means mountain. Just thought I would throw that useless piece of information in there.
Yama is also how you pronunciate "llama" in South America.
It also means Flame in spanish hey! 
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Registered User
Joined: 9/8/2009
Posts: 13
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I am surprised no one mentioned no love for Jim Cramer!
I like the idea of watching the Volume Buzz on FreeStockCharts at stock opening to decide among other things about a stock if I am going to be a buyer. I also plan my exit. I don't like sitting on a stock for too long. The hack with uncle Sam taxing me... I still am making money and that is the goal. On the other hand the idea of making my trading part-time job a sole proprietary business sounds like a great idea for write-offs.
I am looking for ideas and I like visiting StockCharts.com and their public charts sections for ideas for instance. For buzz trades I like CNBC Cramer show and Money talk because whenever they seems to open their mouth about a stock the stock picks in volume and price the following morning even if there is no reason for it. If they bad mouth a stock you can imagine the pullbacks to the stock
I also like to study every once in awhile and I have yet to learn all these indicators and chart patterns and their meaning... I have a long journey ahead of me. I want to learn and I am here to share and to read and listen.
Please share more.
Thanks,
Yama
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Registered User
Joined: 7/11/2009
Posts: 50
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Gentlemen,
I have been studying this thing called the "Market" for about 2 1/2- 3 Mos. now. I have entered and exited a half dozen or so trades. I have done very lousy. I am currently about $100 down. I am reading books,scouring the Internet and looking at charts. I am hoping that something somewhere will click. I have learned about many indicators, reading candlestick charts, and price trends. it is putting it all together to make successful trades that I am having a problem with. I buy thinking the price will rise and it falls or mostly goes sideways. I get out and a week or so later it does rise. I understand that with practice, patience and diligence I will get better. In the mean time I have come here trying to pick up some pearls of wisdom. Yama originally asked for suggestions on how to pick winners. The conversation turned to whether or not backtesting works. I suggest that nothing works, and everything works, it just depends on how it is applied. I say this because I also have a virtual stock account that is making money. If I could figure out how to swap my two accounts I'd be very happy. In the mean time I will just keep reading, studying and trying.
My question is: When one is backtesting (whether it works or not!) How is it done? I have no software for it so should I just pick a couple of indicators and ask "when this does that and that does the other what does price do?" Then just keep trying until I find the right indicators ? I guess I'm just curious how others have used backtesting to figure their methodology. If I should not be asking for you all to give up your secrets please tell me. I do know about stop losses and trailing stops but money management is somewhat foriegn to me. What is meant by that other than get out before you loose a whole bunch of money. I am so new at this I am willing to listen to anything. Thank you all for your input. By the way I am talking about swing trades- a few days up to a few months depending on the particular trade. and I think for the most part I want to stick with the trend.
Jon
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Registered User
Joined: 2/5/2006
Posts: 1,148
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maybe just trade the opposite of your instincts. just kidding.
i trade off classical price patterns myself. multiday above average volume is a must on breakout. just use a volume based indicator like moneystream, obv, chalkin moneyflow, or bop.
good luck
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Registered User
Joined: 1/28/2005
Posts: 6,049
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jandriotis
There are so many variables.
Maybe you would want to post some of those trades?
You could state why you selected it. What your plan was and
why you sold.
I've found on these boards whenever one asks for stock advice.
Folks will tell you what they do (how they trade) but that typically wont
address you problem.
Do you also understand the concept of the broad market?
The fact that early March was a turning point and the rally is longer
in the tooth today?
To be honest. Since many new traders "destroy" their account.
Being down $100 doesn't sound that bad.
(sounds like you are at least being cautious)
Also remember that doing everything perfectly trades can fail.
Thanks
diceman
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