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EWZuber
1,373 posts
msg #30136
Ignore EWZuber
12/4/2003 3:11:56 PM

RMD, and theres the bounce up off of the 25 Week MA confirming the Morning Star Pattern and also forced a complete convergence of the Stochastic Fast and Slow lines on the Weekly chart. Very bullish.
Next I would keep an eye on the Monthly chart stochastics to see how they react. Monthly chart stochastics still in long term distribution. When this goes into accumulation this stock could see another long term rise. JMHO


kbjones00
4 posts
msg #30140
Ignore kbjones00
12/4/2003 11:52:18 PM

EWZuber,

I have been struggling with a good way to add a trendline test to my filter that would help validate a turnaround. Could you provide me with an example of how you would do this?

Thank you,
K


EWZuber
1,373 posts
msg #30149
Ignore EWZuber
12/5/2003 5:46:55 PM

kbjones00
What I do is use Stochastics as the screening criteria since there needs to be stochastic confirmation of the TL break anyhow. I look for stocks that are nearing a crossover and not ones that have already made the transition. This offers me time to prepare, draw in trendlines so I know where the break will likely occurr, and get the premo entry.


TheRumpledOne
6,362 posts
msg #30198
Ignore TheRumpledOne
12/7/2003 5:32:58 PM

http://www.optionetics.com/articles/article_full.asp?idNo=8558

Optionetics Articles

MARKET INSIGHT: Money Management


By Jody Osborne, Optionetics.com
6/19/2003 7:30:00 AM


We can find a lot of information about trading in books and on the Web, but most of it details how to pick stocks and what strategies that are available using options. However, one very important aspect of trading is often overlooked and this is money management. I often get the question, “Why did such and such stock move against us when everything was pointing at a good trade?” Trading is not an exact science; if it were, there would not be a market because everyone would know how to win. In sports, a team can often play a great game and still lose. The same thing can occur in trading. We can have all the odds in our favor, yet the stock will move against us.

Despite the fact that many trades will lose money, if we manage our trades appropriately, we can still make nice profits. In fact, we can make money trading even if our winning percentage is below 50 percent. In just a moment, I am going to discuss how this is possible. However, before we go into some money management techniques, we need to realize that we are going to have losing trades. Even the best baseball team doesn’t win every game. In fact, a 60 percent winning percentage is considered great in the sport. This is similar to the options game, where a person who wins 60 percent of their trades should come out well ahead of the game.

Too many traders enter a trade without any idea of when they will get out. Not only should we have a profit exit set, but we should also have a loss target set. With some strategies, we might be willing to risk the entire capital used, while others we might have a mental stop loss in place. Regardless of where your targets reside, it is important to have them ahead of entering the trade. This is because emotion will dominate our trading decisions if we don’t have an idea of what to do ahead of time.

Now, just to show that we don’t have to be right every trade, let’s take a look at a table showing the profits made using various winning percentages. There is an old saying that states “Let your profits run and cut your losses short.” It is this basis that gives us the following table.

Winning %
Ave Win
Tot Win
Ave Loss
Tot Loss
# of Trades
Profit

40%
$500
$4,000
$250
$3,000
20
$1,000

50%
$500
$5,000
$250
$2,500
20
$2,500

60%
$500
$6,000
$250
$2,000
20
$4,000


Table 1: Profits Using Various Winning Percentages

Notice that by having a 2-to-1 win to loss ratio, we would have profits even if we only win 40 percent of the time. It is also important that we allocate an equal amount of capital to each trade. Many traders will put large amounts of money into trades they think are the best. However, if this trade doesn’t pan out, it can erase the gains made from other trades.

There are various strategies to manage your trading account, but the key is to have a plan. The idea is to “plan your trade and trade your plan.” This means knowing ahead of time where our exits lay and keeping a good record of the trades we have made in the past. Though we can’t win every time, we can learn to manage our money better so that the losses aren’t a problem for the long-term performance of our trading account.


Jody Osborne
Senior Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
Visit Jody's Forum









EWZuber
1,373 posts
msg #30297
Ignore EWZuber
12/15/2003 2:58:17 AM

RMD offered 9% in 4 days, breaking trendline support on Monday.


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