If I buy a stock I want it to go NOW and KEEP GOING.
I can trade short term INITIALLY and convert to longer term if price action warrants.
If you take a look at the OST thread you'll see a trade I have posted there.
My stop is now close enough to Break even.
Its around 30% up since I purchased so at B/E I'm happy to keep longer term
as I'm not trading for income. Why would I let it fall past B/E ???
If you want to survive in this industry then zero risk takes you a long way.
Why would you buy back into a company at a lower price if its dropping.
Wouldn't it make sense to see it reversing before committing.
Yes there is - please tell me when these dips are starting and I will get out of my sound business and buy them cheaper later.surely there is merit in the idea of not staying invested in a share when sp dips significantly
following momentum the good guys are right around 40% of the time - they make their money by cutting loses.Assuming you're good enough of course, couldn't you sell out and then buy back in lower
FA makes its money from the return from the underlying asset. implementing a MOS on the buy price means there is a possability of some price/value arbitrage. but overtime that is overwhelmed by the retun from a good asset. I would rather be exposed to the best assets that can produce my minimum CAGR over time with one buy decision, then putting that at risk by second guessing market moves.
I do not feel the need to have the market verify my opinion of a businesses value. Acceptable buy prices generally only come around when we are in disagreement.
But I personally wouldn't be looking at buying at a "cheaper" price.
Id be looking for a clear return to an upward trend.
You can of course sell out at a point and if it goes say 5% higher buy back in ---if price continues and proves your decision to protect profit to be wrong.
Depends of Time frame can be much higher for shorter term.following momentum the good guys are right around 40% of the time - they make their money by cutting loses.
They actually make money from constantly working on their reward to risk.
Over their whole portfolio NOT a single stock.
All good if in profit or at no risk.FA makes its money from the return from the underlying asset. implementing a MOS on the buy price means there is a possibility of some price/value arbitrage. but overtime that is overwhelmed by the return from a good asset. I would rather be exposed to the best assets that can produce my minimum CAGR over time with one buy decision, then putting that at risk by second guessing market moves.
Not so good if you trading below your buy point.
Generally?? 40%??I do not feel the need to have the market verify my opinion of a businesses value. Acceptable buy prices generally only come around when we are in disagreement.
Hell I sure as hell do.
So will you.
Id like to know how you profit if both dont align?
for a technical trader your argument is fine. FA works on different rules. Why didnít you sell your business before this last down turn?As a technical trader this is my argument.
I've had a go at explaining this here.Why would you buy back into a company at a lower price if its dropping.
Wouldn't it make sense to see it reversing before committing
I have done my best to explain my FA approach over many posts over the past few months. However people like you who have a mind set that only their way is the right way - never get it and to be blunt you annoy me and I give up.
I'll leave you to show everybody the light.
I'm going back under my rock to save myself the agitation.
My own business I own.
F/A doesnt actually work on different rules.
Although you seem to think it does.
Ill have a read and report back when better educated.
More less risky.
I could say exactly the same about your approach to your trading.
My posts in answer to your posts arent necessarily directed at you---but more comments from my side (Just as you comment from your side) for others to weight up in their consideration.
Whether you or anyone else finds my posts helpful is entirely the readers.
Im not here to convince anyone.
Just present---as you have---what works with least stress and maximum profit for me.
I'll let you in on a little secret, most of what passes on ASF as FA is not really FA. It's just speculation. I'm sure the same is true of TA.
Apologies to Vader for ranting in his thread. I try and steer clear of this sort of TA v FA rubbish, and this will be my only comment on it.
I have always emphasised the risk in FA.
I have always acknowledged the risk control potentially available in TA and prompted people to consider it.
Whether you realise it or not Ė your posts are so combative and un-acknowledging of other approaches that they really put me off.
Undoubtedly there is a fine line between confidence and arrogance. You have taught me one thing. Itís time to stop posting before I step across it, if I havenít already.
Hopefully what I leave behind will be of some use to somebody.
I dont wish to trade that way and there may be a few who read this who would prefer not to---right from the beginning---if its not presented then it cant be considered.
I absolutely and whole heartedly agree on BOTH.I'll let you in on a little secret, most of what passes on ASF as FA is not really FA. It's just speculation. I'm sure the same is true of TA.
Why is it T/A V F/A.Apologies to Vader for ranting in his thread. I try and steer clear of this sort of TA v FA rubbish, and this will be my only comment on it.
If the case for each is being presented from exponents from either side---why cant we present our views.
If your happy as can be doing it with F/A fine.
I only post in answer to others posts.
There are a couple of key investment points to be noted from how your thread has started the path of another ASF FA vs TA debate.
1. Predictable. Do not underestimate how much this helps an investor make money.
2. Humans. They make the market and they tend to disagree with each other!
Enjoy the game and keep reading.
I say we leave Vader to his thread....while remembering that FA and TA can both be applied successfully by many traders/investors the world over....
Even more so, perhaps commonly, they both can be applied unsuccessfully with disastrous consequences.
Lets hope that we see something here that represents the former rather than the latter.
"Dump everything aggressively. Take the price to a place where it trades" - Michael Platt - Hedge Fund Market Wizards
The funny thing is you read the posts of a lot of FA guys around here that are trying to help, and they never once attack the TA style and readily admit that it works, but that it just isn't for them. Yet you have the TA guys attacking (whether they realise it or not) the FA way of doing things and will not even admit it has the potential to work.
Best of luck Vader, as CanOz has said i think its time we left Vader's (And Robusta's) threads to discussing their actual approach, portfolio and strategies. Vader is here seeking some assistance on his 'journey' not to start a 5 page debate in a matter of days on the merits of TA v FA - there are plenty of threads on here and on the internet in generaly that explain these to the full.
Who is the happier man, he who has braved the storm of life and lived or he who has stayed securely on shore and merely existed? -Hunter S. Thompson
Sorry to to Vader, I'm afraid my (on-topic) question may have been a catalyst for yet another TA / FA debate. Hopefully the answers (especially one above from Craft) were useful to beginners such as me and Vader in answering the question of whether to apply a tech-style stop loss to a value-based trade.
As someone who prefers TA over FA especially in the current environment what I find hard to watch are statements such as this one of yours on the TGA thread which really is just a hopeful stab in the dark based on what management told you six months ago, it just doesn't have any qualifying substance and the stock going nowhere...
Being asked to justify why a stock is referred to as "underpriced" is not an attack, don't take it personally. Look at all the attacks on TA comments on the RED thread, some FA's eventually conceded that they were wrong by just giving up rather than discussing some obvious reality.
Have a look at this part of the TGA thread and the response I got when I stated the obvious and you will see what I mean (its even more "underpriced" today ).
To lighten this up a bit here is a humurous example of the difference between FA (potential) and TA (reality).
A kid asks his father for help on a writing assignment. "Dad, can you tell me the difference between potential and reality?"
His father looks up thoughtfully and says, "I'll demonstrate. Go ask your mother if she would sleep with Robert Redford for a million dollars. Then go ask your sister if she would sleep with Brad Pitt for a million dollars. Come back and tell me what you've learned."
The kid is puzzled, but asks his mother. "Mom, if someone gave you a million dollars, would you sleep with Robert Redford?"
"Don't tell your father, but, yes, I would."
He then goes to his sister's room. "Sis, if someone gave you a million dollars, would you sleep with Brad Pitt?"
She replies, "Omigod! Definitely!"
The kid goes back to his father. "Dad, I think I've figured it out. Potentially, we are sitting on $2 million bucks, but in reality, we're living with two sluts."
Si Hoc Legere Scis Nimium Eruditionis Habes
If I did just use that 30k and didn't setup the line of credit - what happens if I were to both lose that 30k and also lose my job? If that were to happen then my house would most certainly be at risk. That 30k liquidity is the essential part of this strategy, it's the safety net, it allows for a good six months breathing space if the absolute worst was to happen... I would be completely insane to put that at risk.
In a lot of other cases, the market is short-sighted. Big instos sell out (in periods of stagnation, dividend cuts, changing circumstances, "better" opportunities, window dressing... the list goes on). Most F/A investors seem to be earnings orientated (but only for the next year or two into the future) so quite often you will get announcements that provoke a massive gap down. See Cochlear, which bottomed at $45 and is now $60+.