[noego]

yes....what they said on the last two posts expounding on my comments. Excellent advice folks....10000 hours is absolutely correct. Learning to trade is a full time job.

[otjm]

Bobcollett talked about a 20 day average true range. Check out the work that Charles LeBeau has done on chandelier exits using an exponential ATR. That sets your stop loss based on the volatility of the stock you are purchasing.

In addition, you might want to watch different time frames to see what the overall movement is, and be watching some market averages to see when we are getting either a reversal, or into a trade range.

[JLJ]

Thanks everyone for the thoughtful replies. I do know about how institutional investors drive prices, the importance of expected earnings, etc. However I don't know what 'reversal bar' and 'price action' are. I need to find some really basic info on technical analysis - the info I've read assumes you're familiar with a lot of terms I don't understand, so it's above my head.
What I did was to buy based on fundamentals - using my primitive knowledge of stocastics to avoid buying when the price is peaking - then I'd ride it up for a while, then sell. It was working great until a few weeks ago when the market started going down.
I lost about two-thirds of my gains in the past few weeks. No, I didn't lose all my gains. I think I had good 'beginner's luck" - I benefited from a good market in September and October.
Interesting that I don't hear a lot of people here saying "you can't make money the way it's been the past 2 weeks" - does that mean you can, if know what you're doing? I'll admit that I don't
I don't have a problem with admitting I made a bad buy and should sell before the price drops further. In the beginning, if the price dropped much after I bought, I'd sell - and it cost me. I keep detailed records of all my trades and I spend a lot of time looking at what I did, when, and why, then I look at the charts and see what the price did _after_ I sold. What I saw was that almost every time I sold, the price would come up, often substantially, anywhere from minutes, to a day or two, after I'd sold. Once I realized I was selling too soon, I began to hang on and the price would go back up and I started to have good gains. ...Unfortunately, that also meant when the market started to fizzle a couple weeks ago, my stocks would go down - down - down then my stops were hit.
However, even then, most of the time when my stops were hit, the price only dipped a few cents, maybe 20 cents max, below my stop - then it came back up, often quite dramatically. (There was only one stock that continued to go down and stay down.) So if my stop had been 8.25% below what I'd paid (as opposed to 8% below) I would not have been stopped out and would have still been there when the price came back up. I think a closer stop would backfire. Obviously my position sizes should be smaller so I don't lose as much if the stop is hit. Or I could buy stocks that are less volatile, as one of you guys here suggested.
The thing is, I've often done well with volatile stocks because it would go up a couple bucks a share in one day, I'd sell, then when it would drop I'd buy it again. I've made great gains from buying and selling a small number of stocks, repeatedly. If they don't have pronounced price swings this isn't possible (in the short term, at least).
I'm willing to spend the time to learn. I appreciate folks here reminding me that it takes a long time to get good at this.

[JLJ]

Oh,one more thing... I don't short, don't even know how. But if I can't tell if the price is going up or down, I think I'd lose money shorting.

[ra189663]

Originally Posted by JLJ »

I need to find some really basic info on technical analysis - the info I've read assumes you're familiar with a lot of terms I don't understand, so it's above my head.
What I did was to buy based on fundamentals - using my primitive knowledge of stocastics to avoid buying when the price is peaking - then I'd ride it up for a while, then sell. It was working great until a few weeks ago when the market started going down.
I lost about two-thirds of my gains in the past few weeks. No, I didn't lose all my gains. I think I had good 'beginner's luck" - I benefited from a good market in September and October.
.

As a suggestion: read Trading for a Living, and Come Into My Trading Room, both by Dr. Alexander Elder. I don't believe he focuses on stochastics, but he does focus on swing trading and I think both may be helpful.

Having a tighter stop will cause more losses, but smaller ones. Everything is a trade-off, but with good trades chosen, good position sizing, good stops, and knowing when to exit will hopefully prevent such a large loss of gains.

there is a lot to learn. Some of the best learning comes from making mistakes; but it also helps to know why the mistake was a mistake - or there is no learning at all. On the other hand, there is value in learning what has been a mistake for others; at least in can help prevent making unnecessary mistakes.

The market has had a number of hiccups since March, 2009, and doesn't seem to want to make a steady bull market out of the chaos. And scan of any number of stocks will show gains since then, but not without some dips here and there, for who knows what reason. Don't give up; I think if you read those two books (and you may want to read them numerous times, as they are loaded with information) and learn from this go-around, you will do well. Rome wasn't built & etc.

[Kiwi]

Elder's multitimeframe approach is valuable. High for trend; Mid for setup; and trigger on some price action (you only need two timeframes here not 3).

(Moderator: Removed 3rd part URL)

Focus mainly on pins, buobs, ibs etc. But remember that price action without context (the higher trends say and the pullback point) is just another way of losing money. You need both.