StockFetcher Forums · Stock Picks and Trading · A Newbie's Journey<< 1 2 3 4 5 ... 47 >>Post Follow-up
sandjco
393 posts
msg #136535
Ignore sandjco
modified
6/27/2017 4:30:33 PM

1. I've got nothing to sell or peddle; nothing to convince anyone.
2. I've started this thread because I want to learn "how" to trade.
3. I would like to learn from the journey and correct/adapt/adopt along the way.
4. I would like to win % wise; the dollars will follow.
5. I would like my approach to be simple.
6. I would like to have fun and enjoy the journey.
7. Goal would be to win 4% per trade.

credit goes to (I've read their journey/work that have inspired me to venture on my own) so far:
- Jack Loftis
- SF
- TRO
- graftonian
- four
- pthomas215
- Kevin_in_GA
- mahkoh




My first trade! Hindsight....should I have waited for red to turn to green?

pthomas215
1,251 posts
msg #136536
Ignore pthomas215
6/27/2017 6:17:09 PM

I would first decide whether you most want to 1) Scalp, 2) Swing trade of 3) Value Invest. With scalping, you are taking a chunk of a run, in and out pretty fast. With swing trading and especially value investing you need to be comfortable with the consolidation period. nothing goes straight up because 1) people take profit and 2) some investors genuinely see it as a short even while you think it is still a long play.

Assuming you are scalping, your entry is important. Plot out on your software the moving average 20 day (MA 20) and exponential moving average 13 (EMA 13). Then look at price action in relation to those 2 averages. a decent entry might be when you see an upward regression line with price action but price still below the EMA(13) and MA(20). And look for the crossover, meaning for example today I noticed SPX crossed below the MA (20), so usually when that happens you see further consolidation.

as for your first trade it seems like a decent entry on the surface but in my opinion it is too early to tell. I would have liked to have seen an upward regression line on price movement for the last few ticks, and since I expect SPX to drop more, I would see it as risky in terms of timing. But I am not at all comfortable being down initially in trades (some people are). which brings me to the last point. Have tight stops and small positions to start. no larger position than 5K to start, and a 5% stop. meaning if it is a 10 dollar stock, stop out at 9.50 if it goes there and chalk it up as a less than good entry. hope this helps.

sandjco
393 posts
msg #136537
Ignore sandjco
modified
6/27/2017 7:08:07 PM

PT...many thanks as always for your feedback. I've cleaned up the chart (although I like the Guppies!).



I appreciate the suggestion on "stops". My plan was to "build" the position by buying 2% of $10K first, then if it drops more with high volume to add 3% and if it drops more to add the final 5% for a full $10K and set a stop loss of ? from there. The idea of progression isn't mine.

My plan was with a $50K bank roll split into 5 streams each of $10K never taking a similar position (e.g. buying a tech stock and also the tech index). I want to use the Direxion funds to start and then when I learn and succeed more, I can focus on trading individual stocks.

My filter (as you can see) is simple - based on TRO's RSI and LR(60). Nothing more. I would like to incorporate what you sent me to see which stock/etf cycled (Hershey) the most within a given time frame to serve as sort of a deciding factor on which one to ride. However, when I debug what I've combined, it shows an error message.

I know I'm not a scalper as I cannot watch the screen a lot. I guess I would say "swing". Unless I see a clear pattern forming (ascending triangles, flags, reverse HnS,...) I have no intention in staying LT. I want the money streams to compound at least 2% a week.

I can see what you see about the market still about to fall. I wonder how to incorporate into the filter to say "check if SPY RSI(2) is below 10" in order to validate what the filter spits out....

So many things to ponder...my wife wonders what I am up to reading these forums late at night! ;=P

pthomas215
1,251 posts
msg #136538
Ignore pthomas215
6/27/2017 7:41:19 PM

Well just because the indexes drop doesnt mean you wont see positive gains but I dont like to hold during consolidation periods of the indexes. The support level on the stock you bought was 75 before today and now it is 72.12. It broke through support, which isnt a great signal....so keep in mind tomorrow your stop just in case. Finally, just realize...and more importantly your wife needs to realize too!!...that most people lose money in the stock market. It is designed for us to fail. Not trying to be negative, just realistic.

sandjco
393 posts
msg #136539
Ignore sandjco
6/27/2017 8:24:12 PM

LOL...yep, I got my eyes wide open! The first time was when I pulled my MF stmt from so called Advisors...I did better on my own!

Tomorrow...will watch....5% mental stop (this is the part that I need to learn a lot about).

Kevin_in_GA
4,599 posts
msg #136540
Ignore Kevin_in_GA
6/27/2017 10:04:27 PM

My investment approach is to identify high win% filters, and do not use stops. You occasionally get beat up but usually the trades in aggregate are profitable. I also depend greatly on robust backtesting data and look at the Sharpe ratios for every strategy I trade.


four
5,087 posts
msg #136541
Ignore four
6/27/2017 10:41:56 PM

A fixed 5% stop...
--
What if you pick a stock that is more volatile (moves in bigger % range)?
What if you pick a stock that is less volatile (moves in smaller % range)?

If a stop is used... should the stop be wider on a more volatile stock?

four
5,087 posts
msg #136542
Ignore four
6/27/2017 10:43:57 PM

My plan was to "build" the position
--
We have had a bull market over the last years. Adding to a down hill slide during a bear is possibly expensive.

four
5,087 posts
msg #136543
Ignore four
6/27/2017 10:53:44 PM

My plan was to "build" the position
--
What happens to your model when we flip it. Same rules... but buy on a percent move up, not down.
Do you wish to buy more of a stock that is going up OR more of a stock that is going down?

Another view point:
There is a famous picture of Paul Tudor Jones relaxing in his office with his feet kicked up. A single sheet of loose-leaf paper is tacked on the wall behind him with the simple phrase written out in black marker: “Losers Average Losers”. Famed trader Jesse Livermore warned 100 years ago against averaging losses.

Losers Average Losers: Paul Tudor Jones - Trend Following
https://www.trendfollowing.com/losers_average_losers/

four
5,087 posts
msg #136544
Ignore four
6/27/2017 10:58:14 PM

bid / ask
---
Is there any merit in picking a trading vehicle that is narrow or wide in its bid/ask?

http://www.morningstar.com/InvGlossary/bid-ask-spread.aspx


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