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RE: Beginners Questions - Tryst - 2014-08-19
Thanks, Jim.
I think you have come across the same online snippet that I found...which prompted me to get the book
RE: Beginners Questions - malaguti - 2014-09-01
I'd really appreciate people's views with regard to targets and potential profit taking..
For a target, the book suggests a 1:1 approach depending on the size of the pivot, adjust the target in line with the same initial risk.
Ideally, I'd want to be exiting a portion at this target, and leave the rest to run until a natural exit from the stop loss or entry into stage 3 where I would then wanting to be exiting another portion keeping some just in case of a stage 2 continuation.
I'd be interested to know other's methods. We all want to be in the trade the whole time, but there's the opportunity cost of having capital tied up for so long.
I'm leaning towards 50% at 1:1 and then leave the rest to run. All of it if the stop is hit, or another 25% if in stage 3. Of course the more method I put into the approach the higher the charges so I don't want to overcomplicate things
What's other peoples experiences with this?
thanks
RE: Beginners Questions - MalcolmSm1th - 2014-09-01
This is my personal view on the matter and it may differ to other peoples' views but since I believe that this is all subjective I don't think that there is a right or wrong answer.
I don't have a target. I get out for one of a number of reasons:
1. My stop loss is hit. In that case it's a complete sale of that stock.
2. If I have hit my personal limit of number of stocks held (which is ten, by the way) and then something good comes along then I sell one to make room.
3. If I get nervous about the market then it's a sale of everything.
Note that in the above situation I don't selll half, my initial stake or whatever. I am in until I am out. The reason that I don't have a sale of a part of a stock is that then if I am at my limit of stocks then I can't do anything with the loot.
Yes, I will go into stocks for a second tranche when it's called for. And a third or even a fourth lot but if I have to sell the whole lot goes.
I don't believe in targets where one sells a portion. If the stock demands selling at a certain point then it deserves to be gone totally. If you think that the stock will continue to rise then what's the point in getting out?
I go for the Simple Life Philosophy; get in and stay in until it's time to get out and then get right out.
That's my method and it works for me. It will be interesting to hear of the view of the others on this panel.
Malc
RE: Beginners Questions - theory6453 - 2014-09-01
(2014-09-01, 08:02 PM)MalcolmSm1th Wrote: I don't believe in targets where one sells a portion. If the stock demands selling at a certain point then it deserves to be gone totally. If you think that the stock will continue to rise then what's the point in getting out?
I go for the Simple Life Philosophy; get in and stay in until it's time to get out and then get right out.
Great question, Malaguti. I am of the same thinking as Malcolm on this. Why sell if you think it might still go up? I used to sell portions of my positions to take profits, thinking I would buy them back after they went lower, but it never worked exactly right and I missed a lot of good upwards moves.
I understand the thinking though... A 30% profit target is great... except when the stock moves 100% or 200% and then your 30% doesn't seem so hot. Sure, I didn't lose $$, but I definitely cut the legs out of good position and minimized my earnings potential.
Currently, I use Stan's method of placing my stop under the 30 wma of the most recent pullback and then moving the stop up until the whole position stops out. The one exception I do take into account is that if the stock is moving up very rapidly and there is an exceedingly large gap between the stock's price and the 30 wma, I will sometimes place my stop under the 10 wma of the last pullback instead and apply the same method of moving the stop up until it stops itself out. If there are no warning signs or no red flags though and everything looks to be behaving as expected, I follow the method and don't get out prematurely.
Just my $0.02. Hope that helps...
RE: Beginners Questions - Tryst - 2014-09-02
Agreed, great question, Malaguti...and great answers, MalcomSmith and theory6453.
This very same question runs through my head every day when I look at my trades, and tbh, it is going to be experience that is going to shape my ultimate 'getting out process'.
What Theory6453 touches on, with the stocks that rise sharply, the 10 week MA is what acts as the path of support. From what I am seeing, the first touch of the 30 week MA is potentially the start of a stage 3 forming, which could then be a continuation of stage 2.
Hi all,
just touching a bit on what was last discussed here, knowing when to get out of a trade either in full or lightly, and how to use the MAs as a determinant.
Looks at the chart below of L.GLEN. Lets say that an initial trade was placed (a toe in the water so to speak) on the breakout of resistance at around 348 early July, now what would peoples next trade location be based on this chart? Would it be:
a) the next touch of the 10 week MA?
b) the retreat on low volume back to support (prior resistance)?
c) or something else?
RE: Beginners Questions - MalcolmSm1th - 2014-09-03
Tryst, it looks like that you have got in at a good time. And if I am not mistaken that's a Pocket Pivot Point at your entry.
If this were my position I would be looking to get back in at 380 when the current recent high is breached.
Mind you, I am only saying this because I am still struggling with Weinstein's methods of entry and my better performing stocks at the moment are based on ideas in the books which you recommended me (Morales & Kacher), which run along the same theme.
But in this instance I see a recent high that the price has dropped behind and I would wait until it was breached. I have never personally had any success with buying on pullback and in most of my cases they end up as Buying On Forthcoming Meltdown.
Good question and one that I like as it has my brain juices flowing.
- Malc
RE: Beginners Questions - isatrader - 2014-09-03
(2014-09-02, 10:42 PM)Tryst Wrote: Hi all,
just touching a bit on what was last discussed here, knowing when to get out of a trade either in full or lightly, and how to use the MAs as a determinant.
Looks at the chart below of L.GLEN. Lets say that an initial trade was placed (a toe in the water so to speak) on the breakout of resistance at around 348 early July, now what would peoples next trade location be based on this chart? Would it be:
a) the next touch of the 10 week MA?
b) the retreat on low volume back to support (prior resistance)?
c) or something else?
Personally, I'd say c) in this case as although GLEN.L broke out into Stage 2A; it did so on only just slightly better than average volume, and then there wasn't any improvement in the week following, and then it pulled back on similar volume on the third week after only making a tiny bit of headway. So that's not the kind of price action I'm looking for, as I want to see a stock explode out of the gates at the Stage 2A breakout point on heavy relative volume - 2x the weekly average is a minimum requirement. Ideally you want to see 3x average weekly volume or much more even as you've got to always be considering the opportunity costs of each trade. You then want to see the stock trade higher for multiple weeks. There's no guidelines for this in the book, but from my experience of the A+ charts, it will be a minimum of four weeks before it starts to turn around for a pullback or retest of the breakout level, and it would have made a strong initial run (30%+), and all of the up weeks should have had heavy volume, and then the volume should contract significantly on the pullback to below average levels.
So I wouldn't be adding to it, as the initial position hasn't proved itself to have the A+ characteristics that we look for in the method. As they are the only positions I'd be looking to add to, and so I'd be watching for the next continuation attempt and whether things improve at that point instead.
RE: Beginners Questions - malaguti - 2014-09-03
(2014-09-02, 10:42 PM)Tryst Wrote: Agreed, great question, Malaguti...and great answers, MalcomSmith and theory6453.
This very same question runs through my head every day when I look at my trades, and tbh, it is going to be experience that is going to shape my ultimate 'getting out process'.
What Theory6453 touches on, with the stocks that rise sharply, the 10 week MA is what acts as the path of support. From what I am seeing, the first touch of the 30 week MA is potentially the start of a stage 3 forming, which could then be a continuation of stage 2.
thanks everyone, really appreciate the answers.
I've been going through bar by bar in replay mode for almost all of the FTSE350 to test identification of phases. The main one was stage 3, which has often coincided with a stage 2 continuation, so Theory's answer sits well in that situation.
This is where I may only lighten up on a position (rather than a target), and then add again after continuation, but I'd like to just do some more testing. Often stage 3 can occur higher than your stop loss, as no higher high means the stop is left lower.
I'll start a thread on this topic as well as another which I'm working on within the premium section to take the subject from here.
But this really helps, thanks guys
