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kennethamy
 
Reply Wed 21 Apr, 2010 07:18 pm
@salima,
salima;155049 wrote:
i get the idea some people manipulate the market and get away with it, though...or i am falling for another conspiracy theory? i still think it was a bit suspect how it crashed like it did and began recovery on its own and a lot of people benefited from it.


Oh, they do. Just a few days ago the SEC (Security and Exchange Commission) brought an action against Goldman Sachs for doing just that. The market did not recover on its own. The American people spent over a trillion dollars to make the market recover.
 
fast
 
Reply Thu 22 Apr, 2010 10:04 am
@VideCorSpoon,
[QUOTE=VideCorSpoon;154915]Restricted lists are comprised of stocks that the broker decides that (at certain times of their choosing) to disallow buying, selling, buying and selling, holds, short selling, etc. Those stocks are not completely taken off the lists, just put on hold for whatever reason. For example, suppose I have been trading this stock called HEB, and I have for let's say a few months been heavily trading it. There have been no previous problems with it. For some reason, and when I say some reason any old reason, from a bad rumor to an SEC halt), the stock gets put on the list. It is entirely too frustrating if you are playing with a stock and then it makes this list. But all brokers are different. Scottrade has a huge restriction clearing list, but e-trade has a small one. So to make it clear, a restricted stock is any stock that they allow you to trade, but then all of the sudden don't, and then when they feel like it, lift the restriction (if they ever do).[/QUOTE]Well, that sucks the big one, especially if you're in it. The ramifications are horrible.

If I have all this straight: if you haven't purchased the stock but want to, and if it's on the list, there's no pressing need to check the list to see if the stock you want to trade is on it, for if it's on the restricted list, any order you place simply won't go through, as to be on the list isn't to say it's subject to not later being traded but instead it means that you're actually restricted now from trading it; hence, the name.



[QUOTE]You would definitely like fundamental analysis then. Fundamental analysis essentially lets you find out each of the members social security numbers. LOL! [/QUOTE]As a general perspective, I think it's wiser to base a trade on a blend of both FA and TA. For example, if two companies have great technicals, then there's a place for having the knowledge (that one is fundamentally poor and the other is fundamentally sound) in our trading decisions.

I'm still working the kinks out of a new trading strategy I've been putting together, and it just so happens that I haven't had much need (yet) to look at the income statements, balance sheets, and cash flow statements of individual companies.

Do you spend much time on the EDGAR database?

[QUOTE]Delistings may be something to look into. And speaking of back-testing, e-trade pro give you this excellent tool that lets you double check your own technical strategy and then back test it over the complete history of the stock, giving you a percentage of success. I have used just a few times, but it is still a pretty cool feature. [/QUOTE]Many of the stocks I need to look at aren't even around anymore. Besides, even their darn ticker symbols have been reassigned. I need to know the price action of individual companies trading on the NYSE prior to their demise.

[QUOTE]I think you may be right on the percentage of people who underperform the average (also the lipper average). Although, thinking on it, I would wonder why so many people invest in the first place.

As to beating the market, in my experience, it is not an objective to beat the market, only get slightly ahead. For example, when I day trade, I set a strict goal of $250 a day.[/QUOTE]I think I may not have explained myself well enough.

I'm speaking exclusively long term. For example, let's suppose Ann started investing exactly 20 years ago, let's suppose she invested exactly 15% of her annual gross income each year, and let's suppose she invested exclusively in an index fund that matched the S&P 500.

Now, let's suppose you did exactly as she did except that you didn't invest in what she invested in. Instead, you decided to day trade. Well, it's now been 20 years. We can calculate her average ROI, and we can calculate your average ROI, and the question is, who did better?

In at least 90% of the cases, it will be Ann. If a person does not invest exclusively in an index fund, then there will be days when he or she done better, and there will be days when he or she done worst, but over a long period of time, the people who had chosen the index will find that they are the ones that fared better than those that set out to do better than the market.

What side of the fence am I on? That depends. If you ask me how to invest for retirement, then I'm going to set you on a path that is very different than if you ask me how to turn $250 into $250,000 in three years ... if ya see what I mean.

[QUOTE]When I reach that amount, I either sell right off the bat (in the case of short selling) or set a trailing stop and see how much money I can get without losing my quota. Greed is definitely the enemy in all of this. It is always best to have a goal, stick to the goal, and in many cases sell when the goal is reached. [/QUOTE]I'm a huge fan of rule-based trading. Trailing stops is great in theory, but that pivotal point between making a profit and suffering a loss is nerve wracking.

[QUOTE]You could make a lot more, but then you could lose everything that you made to begin with. This has many inherent strategies. Like when a lot of people set a sell stop (sell their shares) at $2.50, I always make sure a short change myself by at least 12 cents (or some odd, uneven number) the reason for this is because a large majority of people trade in rounded increments. When they do, if a stock reaches a price, everybody want to sell, the exchange is flooded, and you end up getting substantially less than if you had sold just a little earlier. [/QUOTE]Me too! As soon as I read that, I was like, man, you know what you're doing! I employ a similar strategy (or maybe I should say it's incorporated into my strategy-in-the-making) where I am trading in multiples of 7 cents. For example, if I get in at .21, then if I get out shortly thereafter, then I am out at .28, which so happens to be before those round .30 limits lie in wait.

This isn't exactly what you're talking about, but it's similar. You apparently have definite sell targets where you expect a sudden dip, and to avoid the lack of liquidity that's going to present its ugly head just after the climax, you ease off the greed pedal and pull the trigger point back so you are able to sell just before the top is reached.

[QUOTE]LOL! I could go on for pages of little tidbits I picked up along the way, but I suppose its not that interesting. [/QUOTE]Not interesting? Are you kidding me!

[QUOTE]Also, and this is a big IF if you wanted to go this far, there is actually this controversial guy that does tutorials on stock trading in an aggressive way. He provides not only tutorial videos and forum services, but also alerts of stocks that he (and subsequently the rest of his membership) take part in. I have been a member of his alerts for a while and I have seldom lost (mostly because of the huge following he has). To a point, he actually makes the market move because of how many subscribers he has. If you would like to know more, I'll PM his name.[/QUOTE]Wait, you don't do your own screens and scans? Yeah, PM me; I'll take a peek.
 
VideCorSpoon
 
Reply Thu 22 Apr, 2010 01:22 pm
@fast,
fast;155231 wrote:
Well, that sucks the big one, especially if you're in it. The ramifications are horrible.

If I have all this straight: if you haven't purchased the stock but want to, and if it's on the list, there's no pressing need to check the list to see if the stock you want to trade is on it, for if it's on the restricted list, any order you place simply won't go through, as to be on the list isn't to say it's subject to not later being traded but instead it means that you're actually restricted now from trading it; hence, the name.



I completely agree. And I almost forgot to post the link the Scottrade restriction list (although it is a little outdated as it changes day to day). This is a link to a blog with a somewhat complete list, although they left out a few columns. I would repost the list myself from my Scottrade account, but they don't let you copy/past (image format).

Scottrade Clearing Restrictions - Restricted Stocks - Scottrade
fast;155231 wrote:
As a general perspective, I think it's wiser to base a trade on a blend of both FA and TA. For example, if two companies have great technicals, then there's a place for having the knowledge (that one is fundamentally poor and the other is fundamentally sound) in our trading decisions.

I'm still working the kinks out of a new trading strategy I've been putting together, and it just so happens that I haven't had much need (yet) to look at the income statements, balance sheets, and cash flow statements of individual companies.

Do you spend much time on the EDGAR database?

Exactly, it is always best to cover all the bases, both technical and fundamental analyses are best kept together and considered on even ground just to be safe. One fundamental calculation I always tend to break out is the true value calculation. It really shows if the stock is too inflated because of speculation and hopefully undervalued in order to make a relatively safe long term investment.

As to the EDGAR database, I have not really used it that much. What I use in its place for vital statistics is IBD (investors business daily). If you have the money for the e-subscription, I would recommend this because they give you this neat thing called a "stock checkup" that does all the calculations for you and gives you an A to F rating. However, I should note that usually the ratings show that the time to buy is too late, but you can catch the ones climbing in rank. They also have a "stocks on the move" list on your subscription homepage that shows which stocks are doing really good and other which are doing very bad (updated every 15 minutes). And if you like to have a newspaper delivered about stocks, futures, that kind of thing, they have an option for the e-subscription and the weekly paper. I really enjoy it because they have the chart printouts of the stocks they like, so you can mark them up at home and do your own technical analysis. OOOH, and I almost forgot, one of the most useful things they have is the IBD top 100 list, which is basically the top performers in their lists based off their own specific trackers. Very VERY useful stuff.

If you do want to try IBD out, I would also suggest that (if you do want to get the paper and the e-subscription), call IBD and talk to a rep rather than just ordering over the internet. Tell them that you really wish you could buy the paper/subscription but you don't have enough money (cry poor but very sad you cannot try their fantastic
fast;155231 wrote:
I think I may not have explained myself well enough.

I'm speaking exclusively long term. For example, let's suppose Ann started investing exactly 20 years ago, let's suppose she invested exactly 15% of her annual gross income each year, and let's suppose she invested exclusively in an index fund that matched the S&P 500.

Now, let's suppose you did exactly as she did except that you didn't invest in what she invested in. Instead, you decided to day trade. Well, it's now been 20 years. We can calculate her average ROI, and we can calculate your average ROI, and the question is, who did better?

In at least 90% of the cases, it will be Ann. If a person does not invest exclusively in an index fund, then there will be days when he or she done better, and there will be days when he or she done worst, but over a long period of time, the people who had chosen the index will find that they are the ones that fared better than those that set out to do better than the market.

What side of the fence am I on? That depends. If you ask me how to invest for retirement, then I'm going to set you on a path that is very different than if you ask me how to turn $250 into $250,000 in three years ... if ya see what I mean.
fast;155231 wrote:
I'm a huge fan of rule-based trading. Trailing stops is great in theory, but that pivotal point between making a profit and suffering a loss is nerve wracking.

Definitely. Trailing stops can really screw you over, especially because the action takes place way after the fact that the stock is going down, so you would be lucky to stay near you 10% trailing stop.

fast;155231 wrote:
Me too! As soon as I read that, I was like, man, you know what you're doing! I employ a similar strategy (or maybe I should say it's incorporated into my strategy-in-the-making) where I am trading in multiples of 7 cents. For example, if I get in at .21, then if I get out shortly thereafter, then I am out at .28, which so happens to be before those round .30 limits lie in wait.

This isn't exactly what you're talking about, but it's similar. You apparently have definite sell targets where you expect a sudden dip, and to avoid the lack of liquidity that's going to present its ugly head just after the climax, you ease off the greed pedal and pull the trigger point back so you are able to sell just before the top is reached.


Awesome! I see what you are talking about with your strategy! But just remember, the most important thing to keep in mind when you are setting sell and buy points, be sure to base it on the rounded price of the stock itself. So if XYZ is trading at 2.15 and there is a lot of positive volume on the stock (and it has a technical readout of resistance at $2.50), make damn sure you set your sell order at least 5 cents below that, because as I am sure you have experienced, once a stock hits resistance and a rounded number, orders take FOREVER to fill and you end up losing more than if you had sold a little earlier because all those guys that got ahead of you sell bringing the stock lower in any case.

fast;155231 wrote:
Not interesting? Are you kidding me!

Here is another very useful tip for trading (long term and short term, whichever have you). There is a strategy called MACD (pronounced mack-dee). What this means is that you take a given set of moving averages (well, technically it should be the 26/12 or the 50/200 day moving average). Now it usually happens that when the 26 moving average climbs above the 12 day moving average (for example), there, it is usually the case that that signals an uptrend (sometimes huge uptrend). When the 26 passes below the 12, then it is a signal of a sell off. There is not any real rhyme or reason to it, but major investors use this strategy, so you are able to piggy back off of it, you can win big.

Great tutorial here;

Moving Average Convergence/Divergence (MACD) - ChartSchool - StockCharts.com

Also, if you are looking at any chart, always use Bollinger bands in your analysis. Bollingers tell you within 2 standard deviations (literally giving you a 96% accurate prediction) that the stock can go within a certain margin.

Better yet, check out today's current chart of Ford (F).

http://i44.tinypic.com/10xftd5.jpg
fast;155231 wrote:
Wait, you don't do your own screens and scans? Yeah, PM me; I'll take a peek.

I do my own screen on e-trade most of the time. But I use a lot
 
fast
 
Reply Fri 23 Apr, 2010 08:52 am
@VideCorSpoon,
[QUOTE=VideCorSpoon;155267]Now if Ann was invested with Bear Sterns, that would be another story! LOL! The problem as far as I see it is that the market has drastically changed since 10 years ago. Seriously. This is something that I have been looking into for a while, which is that there is a drastic shift in primary portfolio emphasis, etc. For example, I just got an email to day from Scottrade saying that they are opening up 20 foreign market exchanges to be traded at $7!!!! This is the equivalent of hell freezing over in the investing world. The taxes and exchange rates in foreign market trading was so prohibitive (around $30 a trade + $0.50 a share + nearly double tax rate) that it was not even an option. Now brokerages are clamoring to open up these options because the US primary indexes are in such a precarious position and going to the same rates as US exchange rates (NYSE, AMSE, etc.). Nikkei, Hong Kong, etc. have much better averaged earnings/risk ratios now. Not to mention, the WSJ (wall street journal) now says that a good long term investor should have more than 50% of investments in foreign markets (compared to 10% a few years ago).


I appreciate all the points you have made in your posts. Rather than respond to everything at once, I'll respond back to select parts.

The main thrust behind what you seem to be saying is that things are not like they used to be. Not just different but significantly different. Okay, I suppose that may be the case.

When I was in middle school, I ran some foot races. I was fast. But, just how fast was I? Well, I always compared how fast I was doing to how fast others were doing, but then I learned that I should also compare how I was doing to myself. Huh? What? Yes, my current performance to my past performance. In other words, was I improving by beating my own times?

The point is that we need a point of comparison. I could compare how I was doing to my past performance, or I could compare how I was doing to the average performance of others. We can do this with our investments as well.

One thing you can do is compare how you did in 2009 with how you did in 2008, but the results (if not properly put into perspective) can be misleading. For example, let's say your ROI in year X is 6% and your ROI in year Y is 22%. Which year did you do better? The inexperienced will almost (without fail) say year Y, but is that necessarily so?

I don't think so. Let's say the market as a whole was 2% in year X and 26% in year Y. If that's the case, then you did 4% better than the market in year X, but what happened in year Y? In year Y, you underperformed the market, indicating that you would have been better off in a market matching investment vehicle.

The S&P 500 is (by my choice) my benchmark, but based on what you're saying, I conclude that maybe I ought to consider that maybe I need an additional benchmark --perhaps one that is more global in nature.

Interesting stuff!
 
fast
 
Reply Fri 23 Apr, 2010 03:06 pm
@fast,
S&P Global 1200 - Wikipedia, the free encyclopedia
 
VideCorSpoon
 
Reply Fri 23 Apr, 2010 03:24 pm
@fast,
 
 

 
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