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RE: Beginners Questions - kero - 2016-06-24
Well, I have my answer for the next time. Cash is king.
RE: Beginners Questions - MImoney - 2016-06-30
Hello. I am new to this method and I was wondering if there is a way to use a charting program to chart the industry sectors so that I can add the indicators for the stage analysis like the RS and 30 week MA.
Thank you!
RE: Beginners Questions - isatrader - 2016-06-30
(2016-06-30, 05:41 PM)MImoney Wrote: Hello. I am new to this method and I was wondering if there is a way to use a charting program to chart the industry sectors so that I can add the indicators for the stage analysis like the RS and 30 week MA.
Thank you!
You can subscribe to stockcharts.com to be able to save your own chartstyles for industry sectors. Here's the link to the US sectors they have: http://stockcharts.com/freecharts/industrysummary.html#&S=PD&O=2
RE: Beginners Questions - MImoney - 2016-06-30
(2016-06-30, 06:01 PM)isatrader Wrote:(2016-06-30, 05:41 PM)MImoney Wrote: Hello. I am new to this method and I was wondering if there is a way to use a charting program to chart the industry sectors so that I can add the indicators for the stage analysis like the RS and 30 week MA.
Thank you!
You can subscribe to stockcharts.com to be able to save your own chartstyles for industry sectors. Here's the link to the US sectors they have: http://stockcharts.com/freecharts/industrysummary.html#&S=PD&O=2
Thank you
RE: Beginners Questions - kero - 2016-07-02
I have a question about the management of existent positions.
1) When market situation is changing - but only progressively - let's say we have a bull market, and some signs of weakness appear (bad A/D line, eventually breaking the MM30h, even for a moment, and so on). Let's say that the bull ratio is no more 10/10, but only 8/10. Do you prefer cut your positions, or let them being cut by the existent stoplosses ?
2) Same question for sectors. Let's say I buy a Auto&Parts stock, the sector being strong. After that, the sector indice weakens, but my stock is still going further. What would be the best solution ? Close the position ? Getting out ?
RE: Beginners Questions - isatrader - 2016-07-02
(2016-07-02, 08:28 PM)kero Wrote: I have a question about the management of existent positions.
1) When market situation is changing - but only progressively - let's say we have a bull market, and some signs of weakness appear (bad A/D line, eventually breaking the MM30h, even for a moment, and so on). Let's say that the bull ratio is no more 10/10, but only 8/10. Do you prefer cut your positions, or let them being cut by the existent stoplosses ?
2) Same question for sectors. Let's say I buy a Auto&Parts stock, the sector being strong. After that, the sector indice weakens, but my stock is still going further. What would be the best solution ? Close the position ? Getting out ?
I tend to rely on the weight of evidence from the multiple breadth charts that I look at, and especially my portfolio equity curve for signs. Personally I'm not a fan of waiting for stop losses to be hit. I prefer to use the "if in doubt, get out" tactic. So for example, if I see enough bearish signs in the market breadth charts appearing and none of my positions are working anymore, and multiple breakouts attempts are failing in the market. Then I'll get out and reassess from the sidelines from an unbiased perspective. The down side is that it can cause you to get whipsawed and miss some good gains. But I'm a very cautious investor these days, as I'm trading my own pension money, so it might be a more conservative approach than most would take.
RE: Beginners Questions - kero - 2016-07-03
Ok. So its all about calibrating the approach basing on own perception of risk. Considering that I'm working about risk reduction, I'll go in the same direction.
As a note. Recently, considering that it is sometime hard to decide wether the market is perfectly bull, perfectly bear, perfectly flat, or in stage 1/2/3/4, I started to develop a method in which I prefer to define a sort of notation to evaluate the trend. This notation is intended to integrate indices' observations but also indicators (AD line, momentum...). At the moment, watching at the world/European indices, my ratio is 2/10 bull (and hence 8/10 bear).
The idea is to start open positions in a direction (long/short) when the notation in this direction is over 5. Also, to calibrate the exposition of the portfolio depending on this notation. This should reduce risk when trend perspective isn't perfectly clear. If, for example, the bull trend is at 6/10, I can invest 20% of the PF in long positions. If it is at 7/10, I can invest until 40%, and so on.
Basing on this I think that - when the bull trend weakens, I will force the closing of positions, at least when there is a big divergence between my portfolio exposition and the market state.
By the way, what do you think about that way of calibrating the exposition of the portfolio ?
RE: Beginners Questions - isatrader - 2016-07-03
(2016-07-03, 10:25 AM)kero Wrote: By the way, what do you think about that way of calibrating the exposition of the portfolio ?
It's hard to judge without any data. I would try to backtest it in some way, even if it's just manually based on previous positions you've owned, as it sounds good in theory, but I know from my own tests over the years with ideas I've had that the majority of these tests underperform the market.