| ruslansv |
|
Gold User, Member, TeleChart
|
| Registered User |
|
|
|
|
| Unsure |
|
| Thursday, October 6, 2005 |
| Monday, February 13, 2006 5:53:32 PM |
5
[0.00% of all post / 0.00 posts per day] |
|
My personal observation is that shorting types of stocks like SIRI or BBY is mostly the same as gambling. Unless there's a good feel that the company is going to miss there's little catalist on the downside. SIRI is gaining marketshare and BBY is going to ride gadged/TV/Games upgrade cycle. Unless you know of a reliable way to spot an overbought condition and it's a very short term momentum trade - I don't know if there is a good way to trade this.
For me to be a good short candidate the company has to be either a fundamental train wreck or be really overbought with slowing growth (then technicals can be used to justify the entry) - or the whole industry is coming down like a rock (like oil). Then in my view it's still best to pick up the weakest player or short the index or the commodity itself.
What was the rationale (technical or otherwise) to short SIRI?
|
Ah. If only would someone show us the location of the Holy Grain 
The idea of trend-following systems is to get you on the right side of a trend that you'll be able to ride hopefully for a long time. The cost of that is that most of the time markets go sideways. Thus you will get whipsawed quite often and majority of your trades will be loosing ones. It is very painful to trade that way and it sounds easier said then done. As a starting referecce - one popular breakout system is called Turle system, google for original turtles trading rules or smth like that and you'll find it.
Various techniques could be employed to improve selection of securities as well as entries and exists (for example, CANSLIM fundamental screen is a good one; Value Line screens is also something that works for me). The idea is to maximize probability of success. Personally I don't believe trading on technicals alone is as effecitve as mixed approach. The latter however requires a lot of "homework". In turn trading on fundamentals alone could be a total disaster (from my thankfully some while in the past experience). One remedy is to specialize on some group of securities (may be related to your day job) and trade ETFs or for the rest. Say you may understand technology stocks and then you augment that with going with the long-term flow on sectors that are moving using etfs (so to shield you from whimps of individual stocks you know nothing about); so you divide your portfolio and trade few stocks you can understand and the rest you can be say long gold and Japan and short oil (hypothetically speaking, not actual trading advise). You'll have to experiment and find what works for you.
There're some excellent books out there that helped me a lot. Here's what comes to mind at the top:
Victor Sperandeo's Trader's Vic - Methods of a Wall Street Master
Trade Your Way to Financial Freedom by Van Tharp - absoutely excellent reading on trading systems
Practical Speculation by Victor Niederhoffer
The new market wizards
and of course O'Neil's How to make money in stocks (while immencely useful - I find it a bit simplistic)
hopefully this helps somewhat,
good luck,
Ruslan
|
I don't believe there're really any hard and fast rules as far as stops are concerned (such as 7-8% or 2xATR, etc.). It really depends on what type of system you're trying to trade, timeframe and what was the rationale for the entry. Stops should therefor be placed logically based on specific reasoning behind the trade. When one's risk tolerance is outside the stop - then don't take that position; and of course it's good to keep in mind that a lot of times (like with INTC most recently) stocks tend to gap up or down and the price you get may end up being not what you've expected.
Good luck
(and I my view someone totally new to trading should trade just a small fraction of the account for some considerable time, so any tuition paid to the market is minimized)
|
|
I like to know if it is possible to chart broad market indexes, index futures and other indicators like VIX in telechart?
|
|