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 Replies: 5,649 / Views: 461,093 |
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Valued Member
United States
154 Posts |
Thank you for the education here. Better than attending the school of hard knocks. :-)
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Pillar of the Community
United States
606 Posts |
Dang, Yup. Very interesting.
After opening a mutual fund with an initial position, I was thinking to add after this drop. However, you are suggesting the opposite.
I guess this is a better hedge. If it doesn't go higher, no second investment is made, correct?
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Pillar of the Community
 United States
3789 Posts |
@MontanaCMR
well its all subjective to a degree.
First, know thyself. In other words, what is your emotional make up? Some traders I know love to buy the dip in an uptrend. I dont. However, there are times when buying the dip in an uptrend can be done because the uptrend is very forgiving.
So, you could buy it. But how do you PERSONALLY feel about that? See that is a question you must answer yourself.
The other thing is how much are you planning on dropping on this? I know a lot of traders, including myself, bought the b/o in GOLD and FNV, and pocketed the money and the stock tanked or pull back since then. (I should say I am long FNV as of now besides trading it).
SOoooooooo.. say I was in your shoes, if was MY money, I wouldnt add until a new yearly high was made in your fund. And then I would only on a second limit. Perhaps half of the initial amount you did. Not that I am saying you did but again, lets say, I did 1,000 first, then 500, then 250 on the last and so on.
The whole purpose of this is to-
1- Limit our risk
2- make sure we are buying with the trend
3- carry amounts we individually can handle emotionally.
If you are carrying say 30,000 of something and it rolls over on you say at the b/o depending on what size acount you have, it can be hurt you, the stop might not have to been that big,,,, the size is too big for the asset you are trading.
In mean there are so many variables and it depends on what you are trading. once has to know the personality of the asset you trade, one must know the price action.
But anyways, going in circles here Montana. If you follow my method, which I was taught and is taught, yes I would only buy again when that fund makes another new yearly high. When you do add, you want to have determined how much you will be carrying. Again thats a personal choice. But I would add either half of the original amount, as an example.
On the flip side, you might say "hey I like a bargain". Well, in a uptrend, buying the dips is more forgiving. But then question becomes, where do you buy the dip? Two days down? Three days down? 4 days down? Can you see why I personally dont like buying the dip? But others can do well buying the dip... in an UPTREND.
But this is what the general public should be taught, instead of being taught that "ladder on the way down" or "always put money into the markets on a regular basis". the public also should be taught how to always use stops, ALWAYS have an exit in case something doesn't work out. Being WRONG is common in markets and its OK to be wrong.
The fact is there are times to be a buyer of the market, a seller of the market and sometimes you do nothing at all.
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Pillar of the Community
United States
3789 Posts |
@ilikeikes
I didnt see your comment, must have come in while I was typing another reply. thanks for your kind words.
Yea I see what you are saying. There are a lot things happening. Believe it or not, tho, most of us traders ignore just about 99% of the news. Heck when the Fed has its meeting minutes released, we pretty much dont read the thing.
The only thing we really do is watch the REACTION, as to how price reacts. Most of the heavy lifting is always done funds, whether they be the funds that have to put money to work and what they do.
Right now tho, we are just in a chop fest. We basically for all intent purposes are going no where. The type of tape we have is one of indecision.
Like the Miners. This is the pattern of late- make a yearly high and break out (b/o). then pull back. then make another yearly high and b/o. then pull back. Within this price action, even if you got long miners, depending on which one you bought, you would be either essentially flat or slightly down.
This is NOT a healthy tape, full of chop and whipsaws. Doing less is more. This is a perfect example where staying small is good. Depending on your time frame as a trader it can be great (short time frame traders are loving this environment) longer term trend/momentum trend following traders like me are like "meh".
its like a hit and run market for now. If you have profits, you book them and wait in cash. So its good you being nimble, which is how the market is right now.
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Valued Member
United States
154 Posts |
What is the symbol on the stock market for monitoring the dollar against other currencies? I'd like to enter it on my iPhone to watch. Thank you.
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Pillar of the Community
United States
3789 Posts |
@zack6736 Here give this a try, all services are delayed 15 minutes unless you have a direct account for just about all services which charge a fee. but this should work fine. http://finviz.com/futures.ashxyou have just about everything there but below on the last list you can watch several of the traded currencies. |
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Valued Member
United States
154 Posts |
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Pillar of the Community
United States
3789 Posts |
Tomorrow we rest so that gives us some time to briefly look at what happened this week. I hope to pop up some charts too, just been busy over here.
Gold- the gap down on Wes, 3/23 was pretty damaging in the short term. All week however, gold acted rather weak. No attempt to try another run at all time highs after the big surge on 3/16. Today found gold breaking yesterdays LOD and as usual, lower prices followed.
Going forward, at this rate, testing the lower end of the range should be considered a real possibility. 1196 would be the first test. WE are not that far away from that area.
Next week should be interesting. None of us should be surprised if we get lower prices next week.
Silver- broke the range once again and settled the week below the range. First observation seeing this price action and I would lean on the probabilities being high silver goes lower next week as well.
Let us see how much lower it goes, we have been here before where silver breaks out of the range and then comes back. Big test coming up. Breaking those previous lows would imply lower prices from there.
For now lets take one day at time.
Let us counter this price action, where prices are steadily going lower with the fact that gold has made yearly highs. I will repeat myself again- the buyers did not come this far, make yearly highs just to let gold roll over and fall into a pit, so to speak.
I suspect, based on price and if this continues, that gold is going to go into a lull. I been saying this weeks before and it seemed like the buying continued. Sometimes, assets just stop going higher after the buyers have entered their positions. Then, the assets rolls around, dip lower, bounce higher and do nothing. Then, months, weeks later, low and behold, the asset once again is charging to 52 highs.
So remain calm. Remember commodities are super volatile and have powerful moves in both directions. Dont rush to conclusions without first paying attention to price action on multiple time frames.
We are all together here and we'll be able to spot if gold and silver are stalling out or ready to charge up higher again.
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Pillar of the Community
United States
1205 Posts |
Love the input YUP..I'm learning more reading YOU than about 50-zillion articles by the usual gang, no names need be mentioned. I DO have a question for you. The stop losses. I tried it early in my trading "career", last summer. It ended up a LOSS. Why? I had stop losses on some miners...I awoke to see my shares had sold at my level. The bad news, it was a choppy day, and, spot went UP later, and, I lost the deal. I have not used stop losses since, due to this situation. I suppose, looking back, of course, I had the stop too high. I suppose a better method would be to make a stop at, say 10% above purchase price, so, if things tank, at least you got something. I know it gets complicated...especially if one has bought shares at varying times, at varying prices, as you suggest. Another topic, for another day, would be investing in this mining sector, with currency FX issues as the focus. My best profits this year were South African(HMY up over 300%), due to soft Rand/High Dollar. I am looking to investigate how the Canadian Dollar vs, US Dollar rate affects profits...the only reason I ask this is, on many days 75% of my global miners were UP, many of my Canadians were DOWN, even with spot surging, and, all I could muster was the currency situation was involved. I use the livecharts.uk currency strength meter for checking variables, but, I don't know if my theories hold water..you'll know. Most of the global countries with negative interest rates, and funky currencies, are not in the mining business, at least in exchanges I can deal with, so, Japan, Swden, etc, is not an issue for me, mainly for this topic, I'd like to understand the CAD/US situation, as so many miners are from Canada. I can trade on the Toronto Exchange, but, it involves making a phone call, and extra fees, no problem there, but, basically I am "stuck" with OTC's, and the regular list to choose from on AMEX, NYSE, and S&P. I DO know VOLUME is higher on the Toronto Exchange, for some smaller explorers, that would be an advantage. Many made a KILLING with the Australian miners, due to the currency issues..one investor stated "it was like taking candy from a child", the last 2,3 years. Gold, as you know, has been UP much more in international currencies than our Dollar. Die Dollar DIE! Thanks a ton. Calvin G. http://www.livecharts.co.uk/currency-strength.php |
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Pillar of the Community
Canada
3049 Posts |
Yup:
1) I love how you explained how you extend your position as price goes up... In one book I read they referred to that as pyramiding up. Question do you do something similar with your stops? Like if price moves down do you start to take money off the table in a large chunk but still hold a smaller position or do you completely exit with your stop loss?
2) What is generally your stop loss % from your buy? Say you bought shares of XYZ at $100 each... where would you take it all off the table? 10%? 15%? I know different stocks have different characteristics and price swings so tolerances may have to change but was just wondering about a ball park figure?
3) Personally I like big blue chip companies ... with a decent P/E and a bit of a dividend...That's 80% of my portfolio easily! In the next year I anticipate I will have a bit more money to invest and was looking at going into a completely different sector than I've ever been in before. How can I figure out which are the market leaders in any particular sector?
4) Currently I use a very limited number of sources for any type of research, what would be some of your recomendations for web sites, periodicals/magazines or newpapers that you would go to for research.
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Pillar of the Community
United States
3789 Posts |
@ilikeies
Yea I see what you are saying. The thing is the stop loss is going to trigger regardless of conditions, if you said to sell/buy at 10% of a price, it will trigger. If you have profits and there is a drop down at 10% immediately, bammm it will kick in. In other words, what number you put in, no matter what happens, the minute that number or % you put in, it will trigger. These automatic orders and parameters will work but you need to recognize what the current market environment is when you place these type orders.
In choppy markets you will get cut up, whipsawed and your head will spin with frustration. Its normal, it happens to me and all traders across the globe. We have been in this kind of market since all of 15 and even into 16. The trick in these markets is to recognize this type of environment and either trade less or trade nothing at all.
In fast markets you will find that setting automatic stop losses will not work in your favor either. In choppy markets, in volatile markets or time periods you will experience this.
How do you know the current market environment? You must develop tape reading skills. This means countless hours, days, weeks, months and years. This can only be achieved with time, which brings the experience.
So before you put any sort of money to work, if you want to trade, you need to decide how much you are going to do and FIRST decided where you will exit if things do not go your way. ALWAYS first have an EXIT and COUNT on things NOT working in your favor. Prepare to be WRONG.
After that, assuming you are in a profit and it trends in your direction you need to decide how much of that profit you want. You cannot expect to grab every single dime every single time and even less so if you arent watching the screens all day.
So the best thing would be to put on paper your plan of action. Say you are up 10%. Think of putting a max threshold of unrealized gains you want to give and stick to it. Dont allow yourself to say "oh it will come back". You should be doing that when you have a profit already, giving it a long leash so to speak, letting it breath and when it breaches that area, it snaps the leash, take profits and do not look back.
After you decide that, then write it down and stay to it. In your case, I would just do everything manual.
I one final note is that in choppy markets, besides doing less and staying small in size, we traders, depending on our time frame, we wait until the final hour of trade to close out positions.
In markets, I never do anything in the first hour.. I wait after the first hour is done and then I watch closely the last hour. So in choppy markets, say you buy something at a 5 bucks, and all day its been choppy, even if it hits my stop (say 4 bucks) I might stretch it a bit more until the final hour. If it hasnt come back by then in a final hour of of trading (if it hasnt hit 5 or above) then I close it out since it didnt come back at all. the probabilities are high its going lower. Thats just one example. I really cant give you all the scenarios because the markets always change and are dynamic and it also depends on what I trade.
wish I could say it in less words. But again, just stick to a price target or percentage and close it out manually. Wait until the last hour. Since you wont be able to watch something all day and watch market internals, doing it manually is the best... and again try and.
*close things out until the last hour
*ignore what happens in the first hour ... THEN after the first hour look and see where its at
hope that answers your question
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Pillar of the Community
United States
3789 Posts |
@AgCoinAu ok lets see if I can answer these lol. there are so many variables and also again, a lot of this depends on ones emotional make up, finding what one personally is comfortable with so I'll do my best to give you a good idea of your options. 1- Yes, I move up trailing stops or I have a set amount of money I want to make sure I make no matter what the amount. As soon as I have profit I am going to make sure I am going to extract it out of the market, a set an amount that I want to take out. How much I take off and take depends on how the position is going, what is the pattern, and what other areas are moving in the market. Remember too, I will either buy an uptrend and sell short a downtrend. So depending on how many set ups are going, what are the market conditions, what are my profit levels, it all depends. Two examples- I was in 14 and 13 trading around biotech IPO stocks. I would buy large lines then sell them with a profit. Then as the pattern was established, when the stock would hit a buy area, I would take a line and then after a few days dump it. I did that over and over and over until the stock finally died and rolled over and made 52 lows where I started to see if I could sell it short and as it went lower, if it set up, the same stock I bought on the way up, I have been selling on the way down. Other positions, the trend is so strong that pull backs are minor and its very easy to add, let it run, add, let it run, add and then leave it alone after I am in there. A perfect example is gold. I did GLD as I have mentioned many times and over a span of years I started as gold ran into the 440s, the 520s and 720s. that ran high and I gave it a wide leash to see if the selling would end, since I had a large profit I could give it a long leash. Once I detected that the trend down was super strong, expressed by price action, I sold everything. Again, no one except the insiders, which is a handful, can really nail the highs and lows. Again,it all depends on what I am trading, what asset is it. What are the market conditions? Some assets that are market leaders will run for months and give huge gains but then they can fall hard, they show signs where they are tired, the buyers are tired and done buying.. and are ready to go into a lull which can last for months. In those cases, I take all profits. Sometimes I take off and keep half. AGain, its hard to answer because it depends on what I Am in, market conditions, other areas to put money to work etc. 2- It again depends on the asset. Some stocks I set a simple 1-2 point stop. IF the pattern works, I recognize it, I exploit it in a sense. I keep getting bigger and bigger until it stops working. as an example,, say I try 500 shares on company XYZ and I buy it as it makes a fresh 52 high. it works and the stock moves higher. I immediately move up the trailing stop.. say it moves 7 pts in 2 days and on the 3rd day it moves lower, I put a 1 pt trailing stop from its highs from where it finished the the previous day... so,,,, example- 52 high b/o trigger to buy is 52 dollars of XYZ. day 1 and 2 it moves a total of 7 points. the 2nd day it settles at 59. The 3rd day market opens and XYZ is down 1 pt, XYZ is at 58. I take profits there as I have many other similar patterns or set ups appearing on my watch list so I am moving on. That is an example where I closed the entire line. Other times I keep adding and let it run and depending on the pattern, the stock does exactly what it should, make 52 highs, pull back, make fresh 52 highs, pull back, run again at 52 highs... I have been in some where the stock is in a matter of months up 40-50 points from where I started. When this pattern STOPS... it tells me something is wrong. Its kind of like someone who starts acting diffirently. They arent the same. Then you say, "what going on". Well when you get that "whats going on" feeling,, expressed in price when the pattern stops acting as it did, that is your first clue to pay close attention and be ready to walk away. Other stocks need a % stop because of their massive price coupled with how they move. AGain, I know this because of spending thousands of hours watching. Your AMZN, GOOGs, TSLAs PLCNs, etc to name a few, require a % stop on them because their large share price doesn't allow a 1-2 point stop to work. In that case a 10% stop is where I like to work with. AGain I will adjust this depending on market conditions. more later on this with one of your questions. But to sum tings up, my stop will either 1-2 point or 10% depending on market conditions, how are market conditions and what asset I am trading. What I do is observe the price action because all assets have a personality. some act bi-polar, some are very predictable, others are wild, etc. 3- Great questions. Remember this simple rule and you will take out more of the market and limit your risk. BUY stocks making FRESH 52 highs... SELL/SELL SHORT stocks at 52 highs. HOW do we find where the money from the market is going? How do we know where the market is exiting? We do this by- 1- identifying when trend lines in price are broken. Usually BEFORE stocks come to their yearly highs or lows, they first bust through important areas in price in front of their yearly lows and highs. This might not be your strength and thats OK. 2- Use stock screens or scans every day after the market close to find stocks at 52 highs and 52 lows. Your brokerage should be able to provide you with this free of charge. If not use these tools- Finviz.com. You can make some great screens. Here are a few I just put together- http://finviz.com/screener.ashx?v=1...h&o=industryhttp://finviz.com/screener.ashx?v=1...3&o=industryone screen will show you the stocks making 52 highs.. those are the stocks that the market is buying. The other lists are those stocks the market is dumping or selling short, the 52 low list. Notice how the market is broken into industry groups. The stronger the industry group, which is easily identified by more stocks at 52 highs as an example, means thats where the market money is going. Those are the areas you want to look to invest in. on the 52 low list, those are the market areas that are being dumped and sold off. Avoid those if you are a buy and hold investor. DO NOT BUY ASSETS AT 52 LOWSs. They will eventually go lower on you. On the 52 low list, the more names you see, the more you know that industry is weak and the market is avoiding it. the market is a study in cycles. Money is constantly rotating. The market is dynamic and is changing EVERY SINGLE DAY but the TRENDS remain constant and run until they are done. I say that because the more you pay attention to this the more you will see that stocks will say hit a 52 high and then do NOTHING for months, weeks, and then again, they show up at 52 highs. Just goes to show you that a trend is not a one day affair. So by using those screens, and you can play with them and change them around,, you will now where the money is flow too and leaving. Check this list everyday when the market closes. By knowing where the money is going you will always be one step ahead of everyone else. 4- Use yahoo finance or google finance for quotes and updated news, not that it really matters but you might want to read about the company you invest int. To me, for the most part, the news means nothing. But you might want to keep up with that. the BEST newspaper to read and I read it and the ONLY one I do (because again, the financial media is always 3 steps behind) but I highly suggest the Financial Times from England. Also, it has come to my attention of various social media finance sites that give real time info for all time frames of traders AND investors. I have seen one that has a very respectable community, is free to use, there is no charge and no one is selling you any thing.. go to stocktwits.com I have no financial interest in it, have ZERO vested interest in it. I have seen it tho and I can say that it is legitimate and what I like is that there are professionals on there sharing freely, something that is great. The more the public gets informed, the more they can win at this game and be informed. WHEWWWWW. Some great questions AgCoinAu. I am glad you asked these. I hope I answered them, if I left something out or need more clarification let me know. I wish I could say less and even water it more. I say that because in trading markets, LESS is more. The more simple your system, the better. It takes time to understand price action. For the most part, things remain constant in markets. You always buy 52 highs, sell 52 lows. There are times you buy the market, other time you sell it short and sometimes you just sit out and wait. when you take action in the market, you dont put down and carry an entire line. You buy on the way up from a higher price and you sell short from a lower price than where you started. You always have an exit, a stop to get out in case things dont work out. If you have profits, you work to see how far you can ride the trend, let the move play out while at the same time deciding what profit you want to extract. Edited by yup7676
03/26/2016 9:17 pm
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Pillar of the Community
Canada
3049 Posts |
Thanks! Those are just some of the questions I wanted to e-mail you... and didn't want to take away from this thread but when I saw others asking questions I figured why not... if I have the questions perhaps a few others do too and hopefully you won't mind giving the information...
I have read your response once... I'm going to let it digest and then read it a few more times.... (I'm a pretty simple person and a slow learner)...
Once all this has been digested and I start playing around with that site you recommended I might throw you a few more questions... that I already have.. plus a few that come up along the journey....
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Pillar of the Community
United States
1205 Posts |
Thanks YUP...this is the best investment thread online!
I just hope someday the gold-silver miners unite...and form their OWN exchange..run by them for them, with no futures...a real price for bullion could be had..a true market value...and get freedom from the synthetic paper gold BS that eventually will evaporate, sending spot where is should be, as per tonnage and and supply and demand. The big boys would be out of the picture, if futures died...anyone ready for a burial soon?
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Valued Member
United States
154 Posts |
Thanks for your valuable input yup. I check this thread everyday to see what's new to base my next silver purchase on, as well as the trending price. Personally, I'm not ready for silver to take off, as once I spend my allocated $ on silver I plan on stacking more every month. Would like to see at least a 12 month lull in price to stack. Have read about leveraging, and just paying it out and taking possession at the end, but after reading up on it decided I'd be better off just buying as I go. Just an average working joe here, so I have to make my $ count.
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Posted 03/24/2016 12:36 pm
