• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Could someone help me interpret this please?

Discussion in 'Beginner's Lounge' started by Frankieplus, May 1, 2019.

  1. Frankieplus

    Frankieplus

    Posts:
    28
    Likes Received:
    9
    Joined:
    Apr 4, 2014
    Hi everyone,

    I'm very much new so I'm sorry for this seemingly dumb post. But I'm trying to make sure I understand this recommendation.

    I have attached a screenshot. I am assuming that the given scenario here is to buy at $13.06 and sell at $13.45 or $13.90 ? And put a stop loss at $11.54 (See the bottom off the screenshot)

    Am I interpreting this correctly??

    Screen Shot 2019-05-01 at 1.46.30 pm.png
     
    Garpal Gumnut likes this.
  2. Garpal Gumnut

    Garpal Gumnut

    Posts:
    9,085
    Likes Received:
    326
    Joined:
    Jan 2, 2006
    I'd personally like more information.

    Particularly volume.

    Seeking information is not dumb. It's smart.

    gg
     
  3. Frankieplus

    Frankieplus

    Posts:
    28
    Likes Received:
    9
    Joined:
    Apr 4, 2014

    Its more the buy / sell signals that I am referring to. Sorry if I wasn't specific.. :)

    -Frank
     
  4. peter2

    peter2

    Posts:
    3,004
    Likes Received:
    3,227
    Joined:
    Jan 12, 2008
    Yes you've got it right. On those numbers, you're targeting a profit of 0.39 or 0.84 while risking 1.52.

    This is a terrible risk:reward ratio. Of course from the providers point of view their win rate will be quite high and they'll market this rather than the end results.

    I would suggest a better initial stop loss is 12.45 which is the level that would invalidate their long scenario.
     
    aus_trader and Frankieplus like this.
  5. Frankieplus

    Frankieplus

    Posts:
    28
    Likes Received:
    9
    Joined:
    Apr 4, 2014
    Great thanks..

    I will give trading this a miss, I just wanted to make sure I understood the signals correctly.


    -Frank
     
  6. peter2

    peter2

    Posts:
    3,004
    Likes Received:
    3,227
    Joined:
    Jan 12, 2008
    There's nothing wrong with the "rec". QBE could go up or down from here.
    I hope you consider giving their complicated OTC derivatives a miss. I have no idea what you're buying.
     
    StockyGuy likes this.
  7. aus_trader

    aus_trader

    Posts:
    728
    Likes Received:
    434
    Joined:
    May 30, 2017
    Hi Frankie, The recommendations you are getting looks like those from "Trading Central", which I also received a while back. The way to interpret them as I was informed are to buy the current market and you have two Profit Targets at the green lines and two stop loss levels at the red lines. Way too much choice of combinations to choose from in terms of setting up the trade. I like simple systems with a single stop loss combined with a profit target or trailing stop.

    I don't have a problem with Trading Central. They just give out trade alerts based on some technical analysis they do like shown in the image you provided. Not sure what the track record is like with past recommendations. What I did find concerning was that I got these as trade recommendations to act on as part of an online platform that had Fx, Indices and CFD's. So the broker didn't care whether there was an edge in the "Trading Central" recommendations, they just wanted their clients (like me at the time) to continuously put on trades that in turn put money in their pockets via brokerage fees. Thankfully I am not with these 'Churn and Burn' companies who pressure you to trade. You may be new to this business so I just like to say that you should trade to fill your own pockets and not the brokers. If you are really keen, paper trade and see if there is a profitable system within all those lines of choices before putting your own money at risk.
     
    Garpal Gumnut and cynic like this.
  8. Frankieplus

    Frankieplus

    Posts:
    28
    Likes Received:
    9
    Joined:
    Apr 4, 2014
    Hi, thank you for the advice.

    Yes the recommendation was from trading central and I am being cautious, I like to receive these recommendations so that I can have stocks to further analyse myself.

    Would you be able to tell me what is the normal way people who trade short term, get recommendations such as the ones from trading central? I like chart based recommendations mostly.

    As I said, I like to receive recommendations that show me signals to buy and stop, based on charts so that i can then further analyse and make my own choice on wether I should trade or not.

    Currently I get daily email recommendations from

    Trading Central
    Bell Direct (Who I think use Trading Central service anyway)
    The Chartist
    Motley Fool

    As well as the above I read a lot. Financial Review, Morningstar etc.

    But in general, how do people who want to trade short term get their stock choices to consider? They can't possible go through every stock and check the charts to see what the momentum is like and what possible triggers there could be.

    I know that people who like to trade based on financials and PE ratio etc can easily search the ASX using filters to find suitable stocks to trade, but what about people who want to trade based on charts as well? How would you search for charts?

    I'm keen to get strong sources of 'tips' for a better choice of words. I am using the services above but what's the norm and what other services are available?


    -Frank
     
  9. aus_trader

    aus_trader

    Posts:
    728
    Likes Received:
    434
    Joined:
    May 30, 2017
    I don't have any negativity towards trade recommendations from various sources such as what you have mentioned. It's good that you are being cautious because it's unlikely to give you an edge in the long term hence make you money. The reason is these are very short term, technical indicator based signals with fairly tight Stop Loss (SL) and Profit Targets (PT). So let's have a think about it for a moment... Share prices move up or down reasonable amount on average on a daily basis (an amount called ATR if you like to research further), so with SL/TP placed quite close to this daily price action you are either going to be stopped out or exited on a small profit. Maybe the probability is around 50% of either happening. If the analysis is really good you may hit the PT slightly above 50% which might give you a small edge. But by the time you pay for brokerage on both ends (for Buy and then for Sell), the profit may be negligible or -ve for such systems. These are the exact type of systems that brokers like to promote by the way. Why? Because of the frequency of trading, just constantly putting on trades making the brokers very rich with brokerage collections during both in and out of the stock !

    I think from what I have seen in some of the portfolios run by ASF members including myself (Medium/Longer Term Stock Portfolio and Speculative Stock Portfolio)or systems designed by others tend to be slightly tilted towards medium to longer term systems. That way you allow the stock to run in your intended direction to capture a larger profit while keeping the losses small by exiting at a fixed SL. So basically you are looking to get larger winners compared to the losers or risk to reward above 1. This is why peter2 mentioned about this earlier, quote:
     
    sasch likes this.
Loading...

Share This Page