Stage Analysis Beginners Questions

RE: Beginners Questions

(02-26-2019, 03:19 PM)StageAnalysis Wrote:
(02-26-2019, 02:07 AM)James Wrote: Hello, I recently read Stan Weinstein’s Secrets For Profiting in Bull and Bear Markets a few months ago and have been hooked to the stock market since. I was wondering if there’s any other books or videos that would be helpful to read that use the same/similar method? I’m new to the stock market and would like as much advice as possible, thanks!

Hi James, if you visit the main Stan Weinstein thread, there's a bunch of links in the first post that will help you. With regards to books that compliment the method. Mark Minervini's two books are really good if you are interested in the trader method, as they go into great detail and introduce some new concepts, like the Volatility Contraction Pattern, which is really good for minimising risk on entries. Another book that is good and compliments the trader method is How to Make Money in Stocks by William O'Neil. To learn more about relative strength, which is a key component of the method, then Point and Figure Charting by Thomas J. Dorsey is really helpful. For learning about money mananagement, I'd recommend Come into my Trading Room by Alexander Elder and other books he's written, as they also cover some of the key market breadth indicators that we use in the method.

Thank you! Could you possibly link me to the thread or post, just so I know I’m reading the right one please?

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RE: Beginners Questions

(02-26-2019, 06:29 PM)James Wrote: Thank you! Could you possibly link me to the thread or post, just so I know I’m reading the right one please?

https://stageanalysis.net/forum/showthread.php?tid=1

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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(This post was last modified: 02-27-2019, 06:49 AM by James.)

RE: Beginners Questions

Hello, I have a few questions on the method, hopefully you can help me out.

I’ve read the thread you linked me and I see in the Q&A he mentions since the increasing amount of false breakouts, investors should only buy when the price closes above the given level, where as traders should partially buy as the price breaks the given level and then increase their position size if it closes above the level later on. With that said, what type do I use, for example, candlesticks, OHLC bars or just a solid line etc? Do I need to see the whole price action or just the closing price, and which one do you recommended to use as an investor?

My second question is, as he states you should only do your buying when the price closes above the given level, does this work the same way with short selling, that you should only short if the price closes below the given level as an investor? And if so, does it work the same with a trader, where they would only partially short as the price breaks the given level and then increases their position size once it closes below the level later on?

My final question is, when continuation buying/selling as an investor, do I still place my sell stops below/above the 30 week MA like an investor, or do I place them like a trader?

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RE: Beginners Questions

1. The full price action is always helpful, as it lets you see any potential resistance. But it is useful to look at the closing price only chart also, as you can then see when the stock is making new closing highs.

2. Stan didn’t give any additional guidance on whether it applied to short selling also, but the method is very similar both ways, so it’s fairly safe to assume that it would be the same imo. Although, shorting is considerably more difficult, as breakdowns tend to short and sharp with a lot of volatility. So I’d recommend focusing on learning to trade Stage 2 well first. As once you’ve mastered that, you can then try to learn to short.

3. I’d recommend entering continuation breakouts like a trader to minimise risk. As minimising your risk is one of the most important things you can do when trading.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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(This post was last modified: 03-02-2019, 02:33 AM by James.)

RE: Beginners Questions

(02-27-2019, 11:25 AM)isatrader Wrote: 1. The full price action is always helpful, as it lets you see any potential resistance. But it is useful to look at the closing price only chart also, as you can then see when the stock is making new closing highs.

2. Stan didn’t give any additional guidance on whether it applied to short selling also, but the method is very similar both ways, so it’s fairly safe to assume that it would be the same imo. Although, shorting is considerably more difficult, as breakdowns tend to short and sharp with a lot of volatility. So I’d recommend focusing on learning to trade Stage 2 well first. As once you’ve mastered that, you can then try to learn to short.

3. I’d recommend entering continuation breakouts like a trader to minimise risk. As minimising your risk is one of the most important things you can do when trading.

Thanks, all this is as an investor by the way. When placing the initial sell stop under the prior low of the breakout, do I place it at the closing price or the wick? Also what about placing the sell stop if the price breaks the 30 week MA on the correction low after the breakout, do I place it at the close price or wick? And the last thing is, if the price broke the MA but closed inside it, what do I do then on both the correction low and later on in the chart when placing the sell stops? Hopefully you can understand this.

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RE: Beginners Questions

Great Watch-lists so thank you Isa, learning lots and studying Stan's book. making great progress but good lord, very very few stocks on the watch list are on my trading platform, Trading212. May have to make a change. I am a very small time newbie trader at this time and trade using online platforms. But as i said. 9/10 stocks on the main stocks watch-list posts are not listed on my platform. Do some trading platforms have larger market listings than others?. Is anyone able to shed a little light or suggestions for alternative trading options keeping in mind i trade below $1000 so no exclusive or high buy in services.

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RE: Beginners Questions

(03-03-2019, 03:36 AM)sbradwell Wrote: Great Watch-lists so thank you Isa, learning lots and studying Stan's book. making great progress but good lord, very very few stocks on the watch list are on my trading platform, Trading212. May have to make a change. I am a very small time newbie trader at this time and trade using online platforms. But as i said. 9/10 stocks on the main stocks watch-list posts are not listed on my platform. Do some trading platforms have larger market listings than others?. Is anyone able to shed a little light or suggestions for alternative trading options keeping in mind i trade below $1000 so no exclusive or high buy in services.

Thanks sbradwell, I'm glad it's helping. As to your trading platform. I've had a look at Trading212, and it seems to be what was called freetrade originally - which is a new entrant to the UK broker market that's trying to disrupt the pricing structure, by offering trading for free in the same way that Robinhood does in the US. However, it is very limited to mostly UK stocks and European stocks, and only the large cap US stocks, of which not many will appear on the daily watchlists, as they don't tend to have the volume characteristics that the method requires.

I'm assuming that you are in the UK from your broker choice, and with only a limited account size your best option might be to use a spreadbetting company instead, as they have low barriers to entry on trades and have more access to US stocks, as they basically lend you money each day and charge you daily rolling interest, which if managed carefully can let you trade with low costs.

However, if you are just starting out, then it may be more worthwhile demo trading with a live account, as it can take a long while to become consistent. So I'd recommend getting one with IG Index, as they have good access to the US markets.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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RE: Beginners Questions

(03-01-2019, 03:53 AM)James Wrote: Thanks, all this is as an investor by the way. When placing the initial sell stop under the prior low of the breakout, do I place it at the closing price or the wick? Also what about placing the sell stop if the price breaks the 30 week MA on the correction low after the breakout, do I place it at the close price or wick? And the last thing is, if the price broke the MA but closed inside it, what do I do then on both the correction low and later on in the chart when placing the sell stops? Hopefully you can understand this.

As an investor your stop losses will be much looser to allow the trade room for it's normal movements. So below the weekly swing low and the 30 week MA.

Keep the stop loss below the following wicks and 30 week MA as you progress in the trade initially, as you don't want to get more aggressive with raising it until the Stage 2 has run it's course and it's starting to show signs of early Stage 3.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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