tulanch
24 posts
msg #49056
- Ignore tulanch |
1/8/2007 3:25:06 PM
I’m a newbie and wanted to put my thoughts down about my approach as some other newbie in the future may find it enlightening - I've been reading the technical bibles and testing in a simulator (need one that does not have a 20 minute delay). I also greatly enjoy reading this forum and know there is a lot to learn via experience. But my reading has again and again eluted to KISS - Keep It Simple Stupid. I’ve read the SF links about “waiting for green” and the “bb squeeze”. From knowledge of how bb’s are derived mathematically, I came to the conclusion that the “bb squeeze” occurs on consolidation patterns such as a right ascending triangles (yea there’s the newbie in me – triangles love em, understand em). I also find the alignment of the “3 days down filter” interesting, especially when it overlaps within the 2/3’rds area of a triangle’s apex. What is even more interesting is that SF can do all of this for me via a single filter and present me a list of candidates! So at night, say I find 30 or so candidates in the price range I live in. I review them looking for “reasons not to purchase” …reviewing past history performance…potential or coiled up energy if you will…even number crosses …review previous support and resistance levels, and volume patterns, plus obtain ATR values (5, 10 and 20 day) of these stocks. I then end up with a final listing of what I would be interested in buying… this takes maybe an hour. I store all this data in a spread sheet including expected initial purchase prices, calculated/defined initial stops, and calculated/defined expected out prices. I then build a screener with these stocks symbols - on a service that has intraday updates (yahoo offers this plus I can import a CSV file of the symbols to create the screen of, in the same order as stored in my spread sheet). The next morning at 7:30 MST (9:30 EST) as I get a cup of coffee I keep an eye on the screener…”waiting for green” …which I interpret as watching the little price arrows on the screener (green if up, red if down) looking for a constant and consistent upward movement, plus keeping an eye on the volume of these stocks based on previous volumes, looking for spikes – I noticed that the spikes happen quickly on the day a stock makes a run and one needs to also move quickly to get on board as it can all be over within an hour…so when I see one of these jumpings I get in at the price defined the night before based on the values as stored in the spreadsheet. I want to buy in/up as I want do what I can to keep the momentum moving up. Once purchased I move quickly to establish a stop. I found that a generic % values for the stop does not work too well (whipsaw), I much prefer to take into account the ATR, but again this has already been defined the night before, so thinking not required at this time. I have considered setting a top out but also know I should let it run baby, let it run. Some systems let you have trigger sales – initial purchase triggers the initial stop order, but you are limited based on the system ( ie tradeking has a disclaimer of what is valid and what is not for automated/trigger trades - can do on Nasdaq > $1, not clear about NYSE or otherss) …around 8:30am (MST) I go to work and if I did purchase some of last nights candidates, I monitor them, upping the stop if needed and also ready to get out as I don’t want to be too greedy. My overall plan/goal is to sell within 3 days per the “3 day hold” strategy and reinvest/compound things - someday doing this for a living. Is this a valid approach? If a stock does run, should one ½ reinvest and ½ reinvest again if it’s a really good runner? Is this too simple? And how/where online can one trade stocks that are listed under $1 (.pk and .otc) ?
-T
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TheRumpledOne
6,407 posts
msg #49063
- Ignore TheRumpledOne |
1/8/2007 6:42:26 PM
www.izone.com for trading 1000 shares or more. Only $5 each way, unlimited shares.
As far as your approach... you must find what works for YOU!
Don't be concerned with what others are doing, making, trading, etc.
HTH.
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guru_trader
485 posts
msg #58988
- Ignore guru_trader |
1/15/2008 2:19:17 AM
Thanks for the detailed explanation of your typical day. It sounds like you have a good system in place. I'd love to see all your spreadsheets ... I've got them also!
TradeKing seems to have some good rates, but I tend to use a few different brokers, including iZone (the discount side of TDAmeritrade), Scottrade, ThinkorSwim, TradeStation, and I might be forgetting a few others :) (also looking into IB, MBTrading and EFXGroup/Forex), just to be sure I can get that trade as efficiently as possible. You might have to try a few and see which works better for your style of trading ... I know it's a hassle. Another thing, these brokers occasionally change their pricing plans so you have to stay on top of that.
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EWZuber
1,373 posts
msg #59043
- Ignore EWZuber |
1/16/2008 3:20:51 PM
tulanch, As you have found that percentage stops are inneffective so is 'holding for 3 days'. Reason being is that they are both arbitrary numbers as far as the market is concerned.
The best entries and exits are technically triggered. That is to say, let the market tell you where the best place is to enter and exit.
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nikoschopen
2,824 posts
msg #59045
- Ignore nikoschopen |
1/16/2008 4:08:48 PM
Well, at least ure much better off than other newbies in that you know ure price target and stop loss prior to entering the trade. However, I agree with Zub that stops, be it profit or loss, should be based on TA.
This earlier post might be of some interest to you: How to determine stop loss values
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