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+--- Thread: Stage Analysis Beginners Questions (/Thread-Stage-Analysis-Beginners-Questions)
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RE: Beginners Questions - kero - 2016-05-14
SebForLiberty Wrote:" The rising price, on volume, signifies more buying than selling pressure and the volume that there is an increase in interest. If little volume accompanied a rise then it would show that there was a lack of buying interest. "
Rising volume also means more people are willing to sell the stock as its price is going highter. If little volume accompanied a rise then it could also show that owners don't want to sell despite of the rising price, which is obviously a good signal.
Imagine yourself: an army penetrates a territory, without encountering the opposite army. Would you say the arriving army is stronger just because there wasn't a battle (yet) ?
Maybee it is. Maybee not. You can't say until both army actually fight.
When you have a volume on a breakout, you know that there is buyers' strongness. If there is not, you don't know. It is not that a breakout/breakdown without significant volume can not succeed. It is that such a breakout/breakdown has less chances to succeed.
All the Weinstein method is about observing a very few indications, which can maximise your chances of success. Volume, sector, and a few other things. You can choose not to consider them, but that will result in more unsuccessful trades.
It's just a matter of probability.
RE: Beginners Questions - SebForLiberty - 2016-05-14
About the question i asked the other day on the proof that his strategy works (since he didn't make a large fortune), i found the answer, it is no.
http://www.amazon.com/gp/customer-reviews/R38587K019AKIN/ref=cm_cr_arp_d_viewpnt?ie=UTF8&ASIN=1556236832#R38587K019AKIN
" The book is a fun read. It describes Mr. Weinstein's chart breakout method. The problem is that Mr. Weinstein does not provide a track record of his method in the book. I was able to find a 1998 reference from the Business Week website citing a ten-year return of his now-defunct Professional Tape Reader service of 7.13% per year. The S&P returned approximately 15% per year over the same period.
Interestingly, the New USA Fund, established by David Ryan, and using another breakout strategy, that of Investors Business Daily's CANSLIM method, posted only a 3.14% return per year from April 1992 to May 1995. This was after he had won some U.S. Investing Championships with over 100% gains. This fund is now defunct.
When you look at charts of stocks that have had big runups, you will often find a breakout from an area of consolidation. The problem is that careful examination of charts of stocks in general will reveal these same patterns, often not followed by a big price move. Any decent method will show periods of spectacular return, but the vast majority won't beat the indices long-term. "
(2016-05-14, 08:30 PM)kero Wrote:SebForLiberty Wrote:" The rising price, on volume, signifies more buying than selling pressure and the volume that there is an increase in interest. If little volume accompanied a rise then it would show that there was a lack of buying interest. "
Rising volume also means more people are willing to sell the stock as its price is going highter. If little volume accompanied a rise then it could also show that owners don't want to sell despite of the rising price, which is obviously a good signal.
Imagine yourself: an army penetrates a territory, without encountering the opposite army. Would you say the arriving army is stronger just because there wasn't a battle (yet) ?
Maybee it is. Maybee not. You can't say until both army actually fight.
When you have a volume on a breakout, you know that there is buyers' strongness. If there is not, you don't know. It is not that a breakout/breakdown without significant volume can not succeed. It is that such a breakout/breakdown has less chances to succeed.
All the Weinstein method is about observing a very few indications, which can maximise your chances of success. Volume, sector, and a few other things. You can choose not to consider them, but that will result in more unsuccessful trades.
It's just a matter of probability.
Ok now i understand, thank you.
Yes but the Weinstien method doesn't work as shown by the previous post and the fact there is no proof he made a fortune.
RE: Beginners Questions - isatrader - 2016-05-14
(2016-05-14, 08:49 PM)SebForLiberty Wrote: Yes but the Weinstien method doesn't work as shown by the previous post and the fact there is no proof he made a fortune.
Seb you can't say that the method does work based on a random amazon review from 2005 and no experience trading it yourself. And plus his newsletter service doesn't work like that as for example in the March 2012 Global Trend Alert Newsletter he highlighted over 37 stocks as potential buys (but to buy only at certain levels or on pullbacks etc) and 24 stocks as potential shorts (again - only at certain levels or on pullbacks, continuations etc). So even people using the newsletter service would only trade one or two of those stocks or maybe none. So there's no way to calculate performance as it's discretionary and not an automated system that tells you what to buy or sell.
Basically, it's just a common sense investing technique, that most people like yourself would find very boring. As to trade the investor method properly, it requires a lot of patience and very few trades a year.
Like I've said to you before. If you are interested in the method, then you need to put the work in and really learn it, instead of spending all your time trying to discredit it, without ever actually learning the method and using it yourself. As this is my personal website, and is for people that want to learn the method and trade in a similar way, so that I can have interesting discussions with them about the method and help each other get better at trading. If that's not what you are here for, then don't post anymore please.
RE: Beginners Questions - kero - 2016-05-15
I'd add to that, that it looks as the reviewer has a bad understanding of the method. It's not just about working on breakouts/breakdowns, it's about working on breakouts/breakdowns under some very specific conditions. Without considering those conditions, it's obvious that lot of trades are aborted. Which is actually what Weinstein explains perfectly in his book.
RE: Beginners Questions - malaguti - 2016-05-15
(2016-05-14, 08:10 PM)SebForLiberty Wrote: Yes that's my issue, which one Stan uses ? and what kind of weighted MA is it on the Mansfield charts ?
he makes it pretty clear in his book
on page 25 he says that he was using the mansfield charts, which didn't have what we know as the simple moving average. he didn't have it, he had to use what the mansfield chart had which was weighted. so he's explaining to us why his charts are using a 30week weighted because on page 13 he has very clearly stated that he has found over the years that a 30week average is best for long term investors and 10 for traders using the simple moving average
so just to be as clear as I can he is recommending the use of a simple moving average, but goes on to explain why his charts don't show this, because his charts can't and also explains the downside to the weighted method due its whipsaws, again its stated in the book hence why he has recommended the simple moving average. we should npt be using the weighted moving average if had a choice he wouldn't have done so
this is why we all use the simple moving average
at least it was pretty clear to me. by all means re-read the book
RE: Beginners Questions - SebForLiberty - 2016-05-15
(2016-05-15, 12:20 PM)malaguti Wrote:(2016-05-14, 08:10 PM)SebForLiberty Wrote: Yes that's my issue, which one Stan uses ? and what kind of weighted MA is it on the Mansfield charts ?
he makes it pretty clear in his book
on page 25 he says that he was using the mansfield charts, which didn't have what we know as the simple moving average. he didn't have it, he had to use what the mansfield chart had which was weighted. so he's explaining to us why his charts are using a 30week weighted because on page 13 he has very clearly stated that he has found over the years that a 30week average is best for long term investors and 10 for traders using the simple moving average
so just to be as clear as I can he is recommending the use of a simple moving average, but goes on to explain why his charts don't show this, because his charts can't and also explains the downside to the weighted method due its whipsaws, again its stated in the book hence why he has recommended the simple moving average. we should npt be using the weighted moving average if had a choice he wouldn't have done so
this is why we all use the simple moving average
at least it was pretty clear to me. by all means re-read the book
thank you for your answer, i'm french so it's not that easy for me.
(2016-05-15, 09:28 AM)kero Wrote: I'd add to that, that it looks as the reviewer has a bad understanding of the method. It's not just about working on breakouts/breakdowns, it's about working on breakouts/breakdowns under some very specific conditions. Without considering those conditions, it's obvious that lot of trades are aborted. Which is actually what Weinstein explains perfectly in his book.
It looks like you didn't really read the review, he doesn't say it's only a breakout method.
(2016-05-14, 11:31 PM)isatrader Wrote:(2016-05-14, 08:49 PM)SebForLiberty Wrote: Yes but the Weinstien method doesn't work as shown by the previous post and the fact there is no proof he made a fortune.
Seb you can't say that the method does work based on a random amazon review from 2005 and no experience trading it yourself. And plus his newsletter service doesn't work like that as for example in the March 2012 Global Trend Alert Newsletter he highlighted over 37 stocks as potential buys (but to buy only at certain levels or on pullbacks etc) and 24 stocks as potential shorts (again - only at certain levels or on pullbacks, continuations etc). So even people using the newsletter service would only trade one or two of those stocks or maybe none. So there's no way to calculate performance as it's discretionary and not an automated system that tells you what to buy or sell.
Basically, it's just a common sense investing technique, that most people like yourself would find very boring. As to trade the investor method properly, it requires a lot of patience and very few trades a year.
Like I've said to you before. If you are interested in the method, then you need to put the work in and really learn it, instead of spending all your time trying to discredit it, without ever actually learning the method and using it yourself. As this is my personal website, and is for people that want to learn the method and trade in a similar way, so that I can have interesting discussions with them about the method and help each other get better at trading. If that's not what you are here for, then don't post anymore please.
Ok thank you, i understand, but i don't understand why his newsletter doesn't provide the exact trading plan and positions to take, just like he does for himself, if his performance is really good. I work for a compagny in that field, it is exactly what we do.
I don't find it boring at all, i find it extremely interesting, i'm not kiding, i would love to have the time doing it everyday, actually i hope one day with my associate we can start a blog about investing, we have a plan to do it, that's why we are looking for proof that a method really work, we don't want to give to people bad advices.
I have studied this methode and i'm not a newby without pacience shooting trades randomly, i have myself a very low trading frequency, i'm more a long term investor actually, and i only look at weekly sharts, the daily shart is used only for confirmation signal.
There is a differance between "spending my time trying to discredit it" and simply asking proofs that it works (or not). It's just a fact most trading systems that can be readed in a book don't work, while the very successfull traders and investors don't waste time writing a book, since they don't need to. For now, based on my researches, Peter Lynch is the only one who wrote a book to explain his method and has a proven track record of very hight returns.
Don't worry i will no longer be critical since i would like to say on this forum.
have a nice day
RE: Beginners Questions - kero - 2016-05-15
(2016-05-15, 02:08 PM)SebForLiberty Wrote:(2016-05-15, 09:28 AM)kero Wrote: I'd add to that, that it looks as the reviewer has a bad understanding of the method. It's not just about working on breakouts/breakdowns, it's about working on breakouts/breakdowns under some very specific conditions. Without considering those conditions, it's obvious that lot of trades are aborted. Which is actually what Weinstein explains perfectly in his book.
It looks like you didn't really read the review, he doesn't say it's only a breakout method.
Thank you, I know read. He says : "When you look at charts of stocks that have had big runups, you will often find a breakout from an area of consolidation. The problem is that careful examination of charts of stocks in general will reveal these same patterns, often not followed by a big price move."
Thus, he considers that looking to charts and see how often the breakout failes, is a proof showing that the method doesn't work. Which is not, because he never considers the context. Which also implies that he didn't understand Stan's point. But it looks like you didn't either.
RE: Beginners Questions - isatrader - 2016-05-15
(2016-05-15, 02:08 PM)SebForLiberty Wrote: Ok thank you, i understand, but i don't understand why his newsletter doesn't provide the exact trading plan and positions to take, just like he does for himself, if his performance is really good. I work for a compagny in that field, it is exactly what we do.
I don't find it boring at all, i find it extremely interesting, i'm not kiding, i would love to have the time doing it everyday, actually i hope one day with my associate we can start a blog about investing, we have a plan to do it, that's why we are looking for proof that a method really work, we don't want to give to people bad advices.
I have studied this methode and i'm not a newby without pacience shooting trades randomly, i have myself a very low trading frequency, i'm more a long term investor actually, and i only look at weekly sharts, the daily shart is used only for confirmation signal.
There is a differance between "spending my time trying to discredit it" and simply asking proofs that it works (or not). It's just a fact most trading systems that can be readed in a book don't work, while the very successfull traders and investors don't waste time writing a book, since they don't need to. For now, based on my researches, Peter Lynch is the only one who wrote a book to explain his method and has a proven track record of very hight returns.
If think when it comes to any trading method, including methods like lynch's that have reported great returns, that 99.9999% of people couldn't replicate it even if they were trading the same method, as any discretionary method involves humans, and we are are emotional, impulsive, greedy, fearful etc. And so only a few elite people will ever return truly great returns, as the majority of people sit within the middle of bell curve, and only the truly gifted will have dramatic success over the long term. So take the example of the Olympics which is coming up in the summer. Those athletes have trained most of their lives, and most importantly have natural talent, as well as being at the peak of their abilities, and will do things that few others ever will except in their dreams.
So my point is, that there are elite athletes in the trading world like Lynch, but there's little chance that the rest of us will ever reach those heights. And so we try to our best to outperform the market, and with Weinstein's method I've managed to do that for the last few years. There are others that haven't, but all I can say is that it's helped me become a more disciplined investor, and is working for me to increase my pension.
Any method you choose to use can only take you so far. But natural talent can't be learned, you either have it or you don't, but if you have it, it can be improved...