Profiting from market trends?

Hey I've just started up in the market a few weeks ago and I've noticed that everyone keeps talking about market trends etc. I'm at uni doing finance and have read that trends are just random and that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are. After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends. The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on. I believe in a couple of weeks it will double in price, and has the potential to go further. Just a few tips from a beginner investor ;) . If anyone has any information on how you can make money from trends, please let me know.

Hey I've just started up in the market a few weeks ago and I've noticed that everyone keeps talking about market trends etc. I'm at uni doing finance and have read that trends are just random and that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are. After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends. The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on. I believe in a couple of weeks it will double in price, and has the potential to go further. Just a few tips from a beginner investor ;) . If anyone has any information on how you can make money from trends, please let me know.

Hi Matt,
Welcome to ASF!
I assume your question is about price trends and how technical analysts view it. The basic tenet is that all the information about a stock is reflected in the price chart. My advice for anyone wanting to know more is to search and browse ASF for discussions about randomness, fundamentals vs TA, charting etc. Maybe read your textbooks at uni and speak to your lecturer too. Also read Schwager's Market Wizards or Radge's Everyday Traders for examples of real people who make real money using real trends. It works imho.

Also please read the forum code of conduct and posting guidelines asap. If you are confident about your 'massively' undervalued co's you may wish to post what you have in the appropriate thread for each stock for others to discuss.

Hey I've just started up in the market a few weeks ago and I've noticed that everyone keeps talking about market trends etc. I'm at uni doing finance and have read that trends are just random and that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are. After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends. The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on. I believe in a couple of weeks it will double in price, and has the potential to go further. Just a few tips from a beginner investor ;) . If anyone has any information on how you can make money from trends, please let me know.

Hi matt,

Never believe anything you read and only half of what you see.

I would not call price action random. It is however, chaotic (in the mathematical, dynamical system sense).

It means carry a jacket in winter, the tendency (trend) is towards cold weather... and it might rain.

;) Cheers

Welcome! lol Warren buffet ? hmm maybe...big calls ? beginner


trend is ur friend they say ?


cheers

I was mostly confused by how some people are just using trends and trends only to help them select which shares to buy. (I'll post the new about those shares in the right threads when I buy some in a couple of days, just setting up comsec etc now. Don't want the price to jump too early ;) )

Hey I've just started up in the market a few weeks ago and I've noticed that everyone keeps talking about market trends etc. I'm at uni doing finance and have read that trends are just random and that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are. After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends. The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on. I believe in a couple of weeks it will double in price, and has the potential to go further. Just a few tips from a beginner investor ;) . If anyone has any information on how you can make money from trends, please let me know.

Matt,

Trends are momentum.

Undervaluation is opinion.

What is value in an ever changing environment, based on outdated data?

Picking winners and trading profitably are two separate and only loosely connected pieces of the puzzle.

Q. Why are there 101 cures for the common cold?
A. Because none of them work.

Q. Why are there 101 ways to pick a stock to trade?
A. Because none of them work.


What works?
A system with a positive expectancy and correct money and risk management, most appropriately but unpalatably called bet sizing.

(and the psychological make-up to cope with the answer)

What works?
A system with a positive expectancy and correct money and risk management, most appropriately but unpalatably called bet sizing.

(and the psychological make-up to cope with the answer)

Positive expectancy is well known and tends to be blurted out too often with disregard to what matters to achieve that expectancy.


Q. Why are there 101 ways to pick a stock to trade?
A. Because none of them work.

What are the parameters for the picking to be classed as having worked?

There are too many variables to discredit one or the other 100.

Picking is only part of the issue, as is management and psychology. Oh, and then there is the selling issue. When?

I was mostly confused by how some people are just using trends and trends only to help them select which shares to buy.

Bull market gold medallists!

I was mostly confused by how some people are just using trends and trends only to help them select which shares to buy. (I'll post the new about those shares in the right threads when I buy some in a couple of days, just setting up comsec etc now. Don't want the price to jump too early ;) )

Well if your on a stock and it doesnt "Trend" in the direction your trading then you'll not profit.

Regardless of how you select a stock I'll guarentee that if you make a profit from it it will have trended.
Secret is staying in the trend for as long as you can.

I hope you do post your trades as you'll find it a great learning experience.

Matt

I'm at uni doing finance and have read that trends are just random

A trend, is a direct prediction of the future, and as such it must be either right, or wrong, 50/50.

and that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are.

There is information overload. The key is to identify the important information, and to interpret, or analyze that information in a quantitative & qualitative manner, that provides an accurate appraisal of the value.

After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends.

As I assume you are looking in the ASX, this will be interesting.

The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on. I believe in a couple of weeks it will double in price, and has the potential to go further.

Complicated company structure.
We have debt, equity, & hybrids.
We have holding companies.
We have minority, unconsolidated holdings within parents.
We have Partnerships (the tax situation can become complicated)

To double in *price* or return 100% in a couple of weeks.
While this is possible, it would suggest a speculative capital structure, generally utilizing a lot of debt to leverage the returns to equity, or, a stock so *oversold* that it is due a *technical* bounce combined with a true *undervaluation*.

This would however suggest a *counter-trend* position.

I was mostly confused by how some people are just using trends and trends only to help them select which shares to buy. (I'll post the new about those shares in the right threads when I buy some in a couple of days, just setting up comsec etc now. Don't want the price to jump too early

I'd be interested in analyzing them when you eventually disclose them.

Snake

Trends are momentum.

Undervaluation is opinion.

What is value in an ever changing environment, based on outdated data?

Trends are momentum, or sentiment, and can change in a heartbeat, so what is their value?

Undervaluation is most definitely not simply an opinion. It is a fact.
Outdated data, simply displays the gulf that exists between *charties* and *fundies*

Positive expectancy is well known and tends to be blurted out too often with disregard to what matters to achieve that expectancy.

Agreed.
The mantra is propagated without the vaguest notion of what is, and is not actually being generated.

Bull market gold medallists!

Indeed.

tech/a

Regardless of how you select a stock I'll guarentee that if you make a profit from it it will have trended.

While I understand your point, and accept it, there are still the *Options* strategies that do not really require *trending*, Arbitrage, which does not require trending & Bankruptcies.

jog on
d998

Duc

A trend, is a direct prediction of the future, and as such it must be either right, or wrong, 50/50.

Where'd you get that from duc! There is nothing predictive about a trend--you dont even know you have one or how long it is until after the fact.


There is information overload. The key is to identify the important information, and to interpret, or analyze that information in a quantitative & qualitative manner, that provides an accurate appraisal of the value.

Resulting in an opinion,your opinion. As we have seen in your live trading duc percieved value may not be universal.Holding a stock to a 40% loss when purchased at a point of "Undervaluation" has me questioning determination of undervaluation.Accuracy is far from evident from the fundamental analysis I have seen.This in itself is not a problem provided you have a point in saying that "At this point my analysis is not accurate"---your pet hate---STOPS.


To double in *price* or return 100% in a couple of weeks.
While this is possible, it would suggest a speculative capital structure, generally utilizing a lot of debt to leverage the returns to equity, or, a stock so *oversold* that it is due a *technical* bounce combined with a true *undervaluation*.

This would however suggest a *counter-trend* position.

Only news from a speculative stock would do this.Its value would not likely have any bearing.


I'd be interested in analyzing them when you eventually disclose them.

Dont scare the guy off duc let the market analyse them!!

Snake


Trends are momentum, or sentiment, and can change in a heartbeat, so what is their value?

All ords has been on a 20 yr trend.Take a look at QBE had that since $7.85 and now $22 + .Timeframe my friend timeframe

Undervaluation is most definitely not simply an opinion. It is a fact.
Outdated data, simply displays the gulf that exists between *charties* and *fundies*

It can be as factual as you like but unless enough people see things the same way as you do and continue to see your undervalued stock as still undervalued as it increases 10%,20%,30% or more a TREND wont develope for long enough for you to profit.


Agreed.
The mantra is propagated without the vaguest notion of what is, and is not actually being generated.

Expectancy AGAIN---the only usefull expectancy is that derived from a number of completed trades analysed over time.To calculate expectancy of an indivividual trade basis is just plain meaningless v results achieved over your last 50/100 or more trades.Both will be vastly different and more than likely there will not be a positive expectancy if calculated on a trade by trade basis.

Mantra sure but learn how to determine it in a useful way.


tech/a


While I understand your point, and accept it, there are still the *Options* strategies that do not really require *trending*, Arbitrage, which does not require trending & Bankruptcies.

Thought we were talking with a novice---not Allan Greenspan.

tech/a

Where'd you get that from duc! There is nothing predictive about a trend--you dont even know you have one or how long it is until after the fact.

Exactly.
The trend will continue, one possible outcome.
Or, the trend will end, outcome number two.
By *joining* a trend, you are making a prediction that it shall continue, or by shorting it, that it will in point of fact end.

Whereas, with a fundamental analysis, you are *predicting* not that the trend (price) will continue, or fail, only that the valuation in time will return to a higher valuation, or fair valuation.

Resulting in an opinion,your opinion.

An opinion based on the facts.
Factually, it is undervalued.
Your *opinion* rests on the return, or the exceeding of the undervaluation.

Holding a stock to a 40% loss when purchased at a point of "Undervaluation" has me questioning determination of undervaluation.

Only because you trust the market valuation. The market is schizoid.
The ultimate *proof* is not within the gyrations, or volatility, it rests in the *closed* profit/loss statement. The *Chickens* were undervalued, became increasingly undervalued, and are now profitable, as will be the others.

"At this point my analysis is not accurate"---your pet hate---STOPS.

Stops *guarantee* you losses.
The purpose of my live examples is to demonstrate that volatility can be ignored, or utilized to increase profitability, without the necessity of utilizing stops; viz. without losing ANY money.

Dont scare the guy off duc let the market analyse them!!

The market fluctuates between *efficiency* & *inefficiency*
Technicals generally place you in the efficient arena, fundamentals within the inefficient arena. Where would you rather be?

All ords has been on a 20 yr trend.Take a look at QBE had that since $7.85 and now $22 + .Timeframe my friend timeframe

DJIA has been on 100yrs+ trend.
That is because of the underlying fundamentals of equity & economics, nothing what-so-ever to do with *technicals*

It can be as factual as you like but unless enough people see things the same way as you do and continue to see your undervalued stock as still undervalued as it increases 10%,20%,30% or more a TREND wont develope for long enough for you to profit.

I beg to differ................and I invoke the mighty...Bullmarket and his quest for *income*

Assuming that capital growth is not the over-riding concern, then a fundamentally sound business that grows it's revenues, profitability & dividends can be highly lucrative.

Example KO.
Dividends have grown from $0.17/share to $1.24/share or 12.39% compounded BEFORE share splits. There have been two 2:1 share splits, so, if you had 1000 shares in 1989, you would have 4000 shares today, and your compounded growth in dividend income would have been 49.56% compounded,(resulting in a return of initial capital & pure profit) and all the time the share price could have gone nowhere. Generally however, they rise additionally or proportionally to dividend returns.

jog on
d998

Hi michael

Picking winners and trading profitably are two separate and only loosely connected pieces of the puzzle.

Q. Why are there 101 cures for the common cold?
A. Because none of them work.

Q. Why are there 101 ways to pick a stock to trade?
A. Because none of them work.


What works?
A system with a positive expectancy and correct money and risk management, most appropriately but unpalatably called bet sizing.

(and the psychological make-up to cope with the answer)

spot on imo :)

"A system with a positive expectancy and correct money and risk management, most appropriately but unpalatably called bet sizing." = a written and paper traded trading plan which has been tested by paper trading or whatever other means (software etc etc) until the desired returns are achieved consistantly.

Hi Matt

I don't thing trends are random at at all......I see them as the display of the two most powerful emotions that drive share prices up and down - fear and greed

Basically, greed drives buyers to bid higher prices to get stock they believe will go even higher but eventually there comes a point where the fear that a stock may be overvalued stops buyers from bidding higher prices and prompts sellers to offer lower prices to lock in profits.

So in very simplistic terms, share prices rise when the emotion of greed from buyers (and hence there are more buyers than sellers) is much stronger than the emotion of fear that the buyers will drop away from sellers.....and vikky verky for when share prices are falling.

cheers

bullmarket :)

Duc,

A trend, is a direct prediction of the future, and as such it must be either right, or wrong, 50/50.

A trend is momentum of greed or fear. A trend is not a direct prediction of future directions. 50/50? What about ranges?


Snake
Trends are momentum, or sentiment, and can change in a heartbeat, so what is their value?
Value is relative.

Undervaluation is most definitely not simply an opinion. It is a fact.
Outdated data, simply displays the gulf that exists between *charties* and *fundies*

Undervaluation is relative and opinion. Why do so many give different opinions about a given stock?

What are the parameters for the picking to be classed as having worked?

For picking to have worked it needs to improve system performance over random entry, be that improving system expectancy or reducing drawdown. The great majority of stockpicking strategies are demonstrably harmful to both parameters.

For picking to have worked it needs to improve system performance over random entry, be that improving system expectancy or reducing drawdown. The great majority of stockpicking strategies are demonstrably harmful to both parameters.

Michael,

Yes there is truth to that. Management after the pick is the issue most seem to avoid though.

Personally I think picking is extremely important, however, I realise it is only part of a trade and other variables detemine, as a whole trade, what eventuates.

Snake

A trend is momentum of greed or fear. A trend is not a direct prediction of future directions. 50/50? What about ranges?

A trend is momentum, agreed, whether it signifies greed or fear is open to discussion.

As to a direct prediction, it is, you are predicting that it will continue, you go long, or that it will end, you go short. A range, is a sideways trend.
But really it's not that big a deal, if you don't like the definition, just ignore it.

Value is relative.

Actually it is.
Relative to the share price.
And this makes it a fact.
KO at $10/share is undervalued, KO at $40/share is fairly valued based on analysis of the Income Statements and Balance Sheet.

Undervaluation is relative and opinion. Why do so many give different opinions about a given stock?

Because there are a number of different ways to *value* a stock.
Second, it depends *who* is providing the valuation, and their motive.

jog on
d998

I believe in a couple of weeks it will double in price, and has the potential to go further.

I'll bet you any amount of money you like that it does not double in a month.

You must of course list which company it is straight after you accept the bet of course!

:D

OK. Any amount? Let's go $200mil. I'll then borrow $100 mil, get the price to double, take your money, pay back the loan, and be $100mil better off. :P lol

OK. Any amount? Let's go $200mil. I'll then borrow $100 mil, get the price to double, take your money, pay back the loan, and be $100mil better off. :P lol

I volunteer to hold the bets... and I won't do a runner to the Bahamas.... I promise!

http://www.revegy.com/assets/images/Fingers%20Crossed%202.JPG

I won't do a runner to the Bahamas
More like a stumble - that would need a pretty big suitcase!

And of course you'd have to declare the money to customs when you left... :rolleyes:

GP

Lol. Neway the two companies are BMN & EVE for those of you that are interested.

OK. Any amount? Let's go $200mil. I'll then borrow $100 mil, get the price to double, take your money, pay back the loan, and be $100mil better off.

:rolleyes:

You got a deal!!

I'll borrow $201 mill to invest in the stock myself.

If it doubles I'll double my money, so I've got enough to pay you back. Forget tax I'm off to the Bahamas.

If it doesn't you'll owe me $200M, and I'll have $201M in stock as well.

I win every way.


what is the stock - I'm ready to buy!! :cool:

BMN and EVE are you crazy!! :eek:

Both have market caps of $20M

And have Price to book ratios of over 6

They are extremely overvalued by any measure IMHO. :confused:

If they are still trading in years to come I'd be surprised.

I'm still holding the bets, right? :batman:

Yes Wayne, just as soon as we get these $200M margin loans approved I'll email you the money!

:xyxthumbs

But in all seriousness my tip, at least one of them wont be trading this time next year.

I was mostly confused by how some people are just using trends and trends only to help them select which shares to buy. (I'll post the new about those shares in the right threads when I buy some in a couple of days, just setting up comsec etc now. Don't want the price to jump too early ;) )

dont tell me its ZFX!? ;)

thx

MS

lol. just watch them :)

Matt;

I see that both companies are now in the public domain, so they are up for discussion.

that its information that truly matters. From what I've seen, you have to know the company that you're investing in and what their prospects are. After two weeks of looking I have found two companies that I believe are undervalued, one massively so, and thats through ignoring trends. The massively undervalued one is due to a complicated company structure and people not taking the time to read up and learn just what is going on.

My interest was piqued due to the *fundamental* implication contained in your post.

ENE.....Energy Ventures
This is a Venture Capital business. Their primary area of expertise, or interest are hydrocarbons (oil) and oil related technology. I notice they are or have an office in Stavanger, Norway, & as my wife is Norwegian just caught my interest.

They have no financials on their home page http://www.energyventures.no/ev/content/view/full/99 and I am assuming this is the correct company.

Without financials, it simply is not possible to calculate a valuation.
Venture Capital is a high risk business, and almost by definition *speculative*
As with all Venture Capital concerns, they provide cash for the start-up business at some point in their business cycle. Within their portfolio they have some Caltex exposure, this was the only holding I recognized at first glance.

The rest I assume are at various points in their cycles. Without having access to the underlying cash-flows of the subsidiaries, or having them consolidated into financials of the Holding company, you are flying simply on faith.

My biggest concern for the longer term would be that they are *investing* at the high end of oil prices, rather than at the trough. Therefore, as supply comes on line ...............will prices still return an attractive exit strategy for the Venture Capital firm? That is, to float as an IPO, or sell to a private buyer will be much easier in a high oil environment than a lower one.

On the information available, pretty close to zero, there is simply no way of making any kind of informed decision.


Bannerman Resources

This is a start-up miner, floated 2005, no financials, and from the *Prospectus* a self-confessed *high risk* undertaking. (Nickel mining)

Again, without a lot more information, no *investment* decision can be made.
As tech/a intimated, news of a strike etc might turbo-charge the share price, but then again, in the current market, it may not. I am assuming there will be news of a *strike* or something similar.

Without the Cost of Goods line entry, there is no way to assess the profitability margins, and thus the viability of the business outside of the current pricing environment.

To assess a *Miner* you need as a bare minimum;
Reserves
Cost of production
Price Received
Depletion writedowns

As none of these are currently available, we are back to pure speculation.

Both stocks *may* indeed double, triple, but then again, they might not.
You would seemingly be playing the *news momentum* game.
This game is as old as the hills, and goes something like buy the rumour, sell the news, but can vary. Suffice to say, it is a tough game to play.

jog on
d998

Again, without a lot more information, no *investment* decision can be made.

Well we have enough information to confirm these are not worth "investing" in - simple as that!

But that does not mean you can't speculate with them.

I wont, but Matt may get lucky and double his money, much like he would if he went to the casino, straight up to the Roulette table and bet it all on Red.

The problem is if he loses he is out of pocket.

And if he wins, he thinks "how easy is this, I'm gonna do that again with another stock for even more money"

Either way you'll lose over the longterm IMHO.

Hey I've just started up in the market a few weeks ago and I've noticed that everyone keeps talking about market trends etc. I'm at uni doing finance and have read that trends are just random and that its information that truly matters.

Unfortunately, in Uni you will only learn from People who only know theory or if you get somebody from the industry they will be people who earn their money from fees not from buying and investing in shares. I have a friend just completing his Master of Finance and he lost money this year and last year. (Yes lost money during a Bull market). I also have a friend who writes lecture materials for some of these Finance Courses and as far as they are concerned private technical traders who outperform the market consistently just don't exist. For the official "academic" stance on the market read "a random walk down wall street" and spot the errors.

If you are doing Finance to make money in shares forget it. If you are doing Finance to get into the industry well then fine as it is a very well paying industry.

It's a good thing too. If the big funds started doing technical analysis and proper money management then we would all be in trouble.

MIT

Unfortunately, in Uni you will only learn from People who only know theory

Yup, there are people that can do, and do!

And there are people that can't do, and teach!

I have a friend just completing his Master of Finance and he lost money this year and last year. (Yes lost money during a Bull market).

Surprise, surprise. :rolleyes:


Out of interest, what did you friend invest on to lose so much money?

Also please ask your friends when he thinks I should buy and house and when not to?

(I wanna do the complete opposite of what he says of course :D )

It's a good thing too. If the big funds started doing technical analysis and proper money management then we would all be in trouble.

Funds dont have the flexability of retail traders.

They are simply managing masive amounts that can move stocks on entry and exit.
There reaction time is like a boxer on drugs.

Regardless of analysis unless they can find longterm trends to hop into across the board--then performance will be ordinary.
Of late most have been spectacular---compared to other years---but thats due more to market conditions than skill.


Finance industry re advisors------theorists pure and simple--90% of them who exist on trailing commisions regardless of performance.

And there are people that can't do, and teach!

An often toted adage.
How then or who then teaches?
Ist it then that there are NO can do teachers?

When to buy a house

The best time was 6 yrs ago and in 6 yrs time the best time will have been 6 yrs ago.
Ever heard anyone say "Im glad I waited 5 yrs to buy my home/IP?"
Always---wish Id have bought back then!!--when ever then was.

90% of them who exist on trailing commisions regardless of performance.

Exactly!!

They spend time signing up more customers than they do trying to manage their funds!!

Out of interest, what did you friend invest on to lose so much money?


A couple of the Macquarie funds that he thought were underpriced. The major factor was IINet, he bought in at around $3 and has been averaging down ever since.

MIT

I've just realised tha EVE is &*(&#. Neway :), BMN is still good though, the uranium tenements in Namibia will pay off and it'll become a copy of PDN. EVE has got too much money, and the other two projects it's funding really are very spec. GO BMN!

A couple of the Macquarie funds that he thought were underpriced.

Hmm, far too many people use the term"underpriced" or "undervalued" without understanding what they mean, or how exactly to value a company.

Matt, himself mentioned some mining stock was very undervalued. Yet it had a market cap of $20M, had never made a profit and has about $3M in NTA.

It is arguably valued at about 7 times more than it is truly worth at first glance.


The major factor was IINet, he bought in at around $3 and has been averaging down ever since.

Bugger!!

Still, not a wise buy, even now at 85 cents it looks overpriced. :eek:

I've just realised tha EVE is &*(&#. Neway

;)

EVE has got too much money

I wish I could buy a company that had too much money!! :cool:

BMN is still good though, the uranium tenements in Namibia will pay off and it'll become a copy of PDN.

down 8% since yesterday Matt... :eek:

If you had bought it yesterday, would your stop loss have meant you already sold it at a loss?

Where's the faith?

Matt

Faith, Hope, Charity..............all commendable attributes in life, unfortunately, in the market a short-cut to the paupers grave.

Knowledge (theory) is very important, vital in fact, but knowledge must be tempered with experience, and this takes time, and finally courage of character, without which the previous two cannot be fully realized.

jog on
d998

On June 1st :

BMN was 1.05
EVE was 0.14

Today 6/6/6 :

BMN is now 0.91
EVE is now 0.135


I hope you did not buy them Matt!! :sly:

Just you watch BMN :D

I have been.... :bad:


What is so good about BMN Matt?

What do you know that I don't? Or what can you see that I can't?

Just you watch BMN :D

Matt,
Whatever happens I hope you will stick around to analyse your trades/investments, you're bound to learn a lot.

BMN is up 1 to 0.92
EVE down 1 to 0.125

Give BMN 5 weeks.

Give BMN 5 weeks.

Before it goes into voluntary receivership?

:D

I get it: it`s all inside info.

lol No, just a careful look at the companies schedule and what information is due to come out and when. Then a careful look at the probabilities of what that information will be and how good or not the news will be. Financials don't matter in spec uranium explorers.

BMN is now 0.75 :eek:



Did you buy any Matt? :confused:

What works?
A system with a positive expectancy and correct money and risk management, most appropriately but unpalatably called bet sizing.

(and the psychological make-up to cope with the answer)

That's all I do. I cut my losses at 0.5-1% of my capital and let my profits run.

When my stops are hit, most of the time I don't even look at the chart. I have an SMS sent to me and I simply close the trade. Using discretion has rarely worked in my favour.

As some trader said, I think I saw it quoted around here... "Every big loss was once a small loss".

Unfortunately, in Uni you will only learn from People who only know theory or if you get somebody from the industry they will be people who earn their money from fees not from buying and investing in shares. I have a friend just completing his Master of Finance and he lost money this year and last year. (Yes lost money during a Bull market). I also have a friend who writes lecture materials for some of these Finance Courses and as far as they are concerned private technical traders who outperform the market consistently just don't exist. For the official "academic" stance on the market read "a random walk down wall street" and spot the errors.

If you are doing Finance to make money in shares forget it. If you are doing Finance to get into the industry well then fine as it is a very well paying industry.

It's a good thing too. If the big funds started doing technical analysis and proper money management then we would all be in trouble.

MIT

I've been studying comp sci which no doubt was a ****ing waste of time. I've been thinking of changing to finance, but not after that synopsis.

Maybe economics? At least it's broader. If I wasn't so far out of school I would maybe try maths.

I've been studying comp sci which no doubt was a ****ing waste of time. I've been thinking of changing to finance, but not after that synopsis.

Maybe economics? At least it's broader. If I wasn't so far out of school I would maybe try maths.


Swingstar,

Choose something of value when the financial system collapses. Become a doctor or a dentist maybe. Real Estate is not worth it. I@ve been there and it is just nasty people thinking they are important because they borrow what they don`t have and then think they can command what they want to, devoid of any investing strategy or education. I am bitter about that industry. I have a lot to reveal.

Snake

Thanks Snake. If I do anymore study, it'll only be so I can apply it to my trading. Economics and maths are areas that don't rely on a capitalist society, whereas finance does. I'd only be continuing study for personal interest, not for a career/job.

Because there are a number of different ways to *value* a stock.
Second, it depends *who* is providing the valuation, and their motive.

jog on
d998

Value is opinion then.

Value is opinion then.

Of course value is an opinion!

Look at what some people pay for additions to outlandish and "valueless" collectables.

EVE is now 0.225, not bad if you had picked it up at around 0.10. BMN however has done very well and is now at 2.10 up from 0.35. And yes, I bought and hold BMN but did not get any EVE. My first experience with shares has been very nice indeed lol.

EVE is now 0.225, not bad if you had picked it up at around 0.10. BMN however has done very well and is now at 2.10 up from 0.35. And yes, I bought and hold BMN but did not get any EVE. My first experience with shares has been very nice indeed lol.
No offence Matt but on May 31st 2006 you stated;
I believe in a couple of weeks it will double in price, and has the potential to go further.
The 64% drop that BMN went through on week ending 25/08/2006 must have been interesting if you only have one trade on. The stock didn't double as predicted. I don't suppose that you are going to ramp this one again? :rolleyes:

If so maybe back the claims up with some fundamental analysis. Mind you both stocks have quite nice looking charts with some good uptrends well underway :)

I suppose you also realise that setting the FA's against the TA's is a great way to get some very heated discussions going on this thread, usually with very little gained.

Few handy Trend Following tools:

ADX, Trend Line , and GMMAs


Note the long term GMMA has not yet compressed and turned down and the short term GMMA has not penertrated the L/T GMMA -- trend still in tact .

ADX gave ample warning

Bollinger Band upper penertration was a very early warning


Trend Line in tact


Simple Trend Trading Tools :

Few handy Trend Following tools:

ADX, Trend Line , and GMMAs


Note the long term GMMA has not yet compressed and turned down and the short term GMMA has not penertrated the L/T GMMA -- trend still in tact .

ADX gave ample warning

Bollinger Band upper penertration was a very early warning


Trend Line in tact


Simple Trend Trading Tools :

Hi Coyotte,

Do you treat any penetration of a bollinger band as a sign of change be it upper or lower?

Hi Snake

In Trend Trading I treat Bollinger Bands as a early warning when a stock appears to be starting to top -- tighten STOPS -- watch for a diverging ADX plus line .

I treat a diverging ADX combined with long upper Candle tails in a Trend Trade as a EXIT SIGNAL for the time being with a possible entry latter .



In Break Out Trading I watch for a breach of the lower band - - followed by a move back within the band --- any CLOSE now above the Count Back line is a Entry Signal .


BBs set at 20 x .2 simple


Cheers

Coyotte,

I understand your rationale thanks.
Snake