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Handlowiec
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Posts posted by Handlowiec
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Go through the options and look at Technical then you can filter volume.
Personally I only trade stocks that have at least 500,000 shares a day. I have been burned too many times trading low volume stocks at break out to reverse and then take a loss. The higher the volume the better (30 day average) and the higher the price the better (IMO).
If you get a list of 100 stocks that is wonderful, then flip through them looking for setups. I know what a trade setup looks like for me. I can flip through 100 stocks in about 10 minutes. Years ago I would not think that was possible, but now I know what I want to look for so it is really quick.
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I use an option scanner in mtrig.com for weekly options. There is a free trail if you want to give it a shot.
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Consumer Confidence numbers are in the group of "coincidence indicators" which mean they have very little value for traders and investors.
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Go to the "Stock Screener" page on Barchart (Click Here)
Then click on Filters->Opinion->Then select Trend Spotter...
When I use this tool I then open the "Flip Charts" looking for patterns and trade setups. Just because Trend Spotter says GO LONG is not enough to GO LONG.
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Hey Guys,I was wondering if anyone knows this site: Options Digger
They claim to have some method to screen for insider option trading. Anyone knows it? Or heard about? Maybe a member somebody here?
Thanks in advanced!
hmm...interesting first post, do you own the site? :doh:
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I have a general distaste for most trading books. I only like books that are basically memoirs. I have read and reread Reminisces of a Stock Operator, How I made 2,000,000 in the stock market, the market wizards series, Mark Douglas' two books, and Martin Schwartz's pit bull book.The problem is that it appears I have exhausted the source of quality trading books. I would greatly appreciated any and all suggestions. Please give suggestions even if the books are not directly related to trading. For example I have found some biographies on generals such as Gen. Patton and Field Marshal Rommel to be appropriate to trading in some aspects. Thanks for the help and good trading to all you great people on this forum.
The books you mentioned are the top books I have read many times.
You will no doubt really like "Technical Analysis and Stock Market Profits" by Richard Schabacker. He is the real originator or Technical Analysis and coined all the patterns (head and shoulders, triangles, flags, and more).
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I have ready many TA book over the years. I recently read the classic "Technical Analysis and Stock Market Profits" written in 1932.
That book by Richard Schabacker was one of the most complete book on TA and psychology I have ever read. I soon found out where many folks such as John Murphy pulled their ideas. It cam from Schabacker. Murphy does cover indicators but chart patterns the originator of it all was Schabacker.
Schabacker's book Technical Analysis and Stock Market Profits was first written as a course and sold to traders. The book is a complete course. It does not focus on any technical indicators since there were none.
I would recommend his book to get started looking at chart patterns, then you can start looking at indicators. I did the reverse. Over many years of trading I would rank Schabacker's book as #1.
To get a traders overall mindset my favs are.
1. Technical Analysis and Stock Market Profits (Schabacker)
2. Trading in the Zone
3. Jesse Livermore, Reminiscences of a Stock Operator
4. Trader Vic: Methods of a Wall Street Master
5. Technical Analysis of the Financial Markets
6. Technical Analysis of Stock Trends by Robert D. Edwards and John Magee (they give credit to Schabacker) This book is required reading for CTAs and was written in the 30-40's.
#2 and #3 are books to read again and again when you find that you are fighting more emotional battles than trading battles in the market.
I used to think Elder's "Trading for a living" was really good until I spent many more years trading, now it seems gimmicky to me.
I will finish with a wonderful quote from Schabacker.
"But it is this very faith in the efficiency of stock charts that leads to an introductory warning against over confidence and mistrust. There is nothing like the thrill that
comes to the beginner when he once commences to master the rudimentary principles of chart reading and sees his first few forecast analyses turn out correctly.
The greatest danger for the beginner lies in just this primary awakening to the value of his study.
With his first few successes he is likely to mistake a probable forecast for a certain one, to become overconfident, to overtrade, and suddenly find himself involved in a disastrous quagmire of heavy losses and, what is perhaps more important, in a hopeless state of indecision, mistrust, skepticism, and bitter disappointment." -Schabacker
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Instead of looking at the chart for every single stock and trying to identity the chart patterns, I am looking for programmatic library that can automatically do this for me. Does anyone know of any such library?I use StockFetcher.com to scan for patterns. It is cheap, only $9 a month. You can try it for free. Here is the link for the Flash Version. It has a pattern seach for common patterns such as triangles and channels.
Someone mentioned PatternSite. There is a free windows app on the site you can download to do the search for patterns is free, but it is a pain to use since you have to download data, import it, and run a scan. It can take a long time.
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I have written code and back-tested RSI, MACD for all kinds of cross overs, RSI crossing 50, MACD crossing zero, and more. (Using AMIBroker) Then back-test this on thousands of stocks. If someone can really make money using these indicators alone I would sure like to see it.
If you have a strategy I would be willing to back-test it and post the results from AMIBroker.
Here is RSI(14) Crossing 50 and the results for all stocks under NYSE for the past 10 years. 15% Avg a year, 400% Return. Sounds good, well then look at the other stats 39% Winners, MAX Draw Down $94,000. See the attached report image.
xBuy = Cross(RSI(14),50);
xSell = Cross(50,RSI(14));
PlotBuy = ExRem(xBuy ,xSell);
PlotSell = ExRem(xSell ,xBuy );
Buy =PlotBuy ;
Sell = PlotSell ;
Short = PlotSell ;
Cover = PlotBuy ;
PlotShapes(shapeUpArrow * Buy, colorGreen, 0, Low );
PlotShapes(shapeDownArrow * Sell, colorRed, 0, High );
Test Results
Signals DIA
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Put some real money on the line. Get your emotions going and you will gain more insight.
You can do this by buying just 1 share of the Apple. This way you are more tied to it, get a real fill, and you will stay on top of the trade. If you trade at IB you are taking $1 buck for the trade.
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I have been trading weekly's on a trial bases using an option search engine at MTR Investors Group.
What I have been doing is selling naked puts on weeklys where the strike price is below a support level. I have been doing this on a Monday to give myself 5 days until expiration for the put to expire worthless.
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Curtis, TheDude makes some great points.
It sounds like you have a solid background to get back into your career if you decided to do so in the future. it is not many times opportunity comes along where you can give it your all to trade full time.
Just keep the confidence in check and apply your risk management as you stated.
I wish you the best success in this endeavor!
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Something by Peter Brandt that is must read regarding the realities of trading.
"Successful trading is an upstream swim or uphill run against human nature. It is fair to say that consistently profitable market operations require that a trader learn to overcome strong emotional pulls." - Peter Brandt
Six major points from the book Diary of a Professional Commodity Trader
1. Consistently profitable commodity trading is not about discovering some magic way to find profitable trades.
2. Consistently successful trading is founded on solid risk management.
3. Successful trading is a process of doing certain things over and over again with discipline and patience.
4. The human element of trading is enormously important and has been ignored by other authors for years. Recognizing and managing the emotions of fear and greed are central to consistently successful speculation. I make no pretense that I have this aspect of trading mastered.
5. It is possible to be profitable over time even though the majority of trading events will be losers. “Process” will trump the results of any given trade or series of trades.
6. Charting principles are not magic, but simply provide a structure for a trading process. - Peter Brandt
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No offense to the OP. But are you serious? Is this whole thread a big joke?You plan on trading for a living with only 75k and you are using brokers like Scottrade?
Some of you say 75k is more than enough to trade with or even 45k. Honestly, how many professional traders do you know that trade that small of an account and make 6 figures? I know ZERO. Yes, maybe a retail guy got lucky 1 year with 45k, but consistent for 3+ years is a rarity. Next comes Scottrade, please do some research on finding a better broker. You must not care about execution speed or commissions. Do you know how much you would save in commissions if you made 100k and you were trading with a real discount broker vs Scottrade.I am actually shocked to read people like this believe they can trade for a living, (ie- the guy just shorted a stock for the first time ever and his wife is getting excited about the business).
There are so many red flags, I just keep shaking my head.
My suggestion- Go to IB, Keep your day job or part time job. Never use borrowed money like an insurance or home LOAN to trade, and be prepared to lose all of your money you have in the market for when your support and resistance strategy stops working.
Great point on Scottrade. I have IB as well. One of the first rules in trading is keeping the costs lost. When someone attempts to trade because "they need the money" will bring up an entire world of issues the new trader would never have expect. Yes, KEEP YOUR JOB. Start out position trading. Don't take a lucky streak as the way it will be long term.
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Hi Folks,Are there really any price patterns in the forex market that have an edge and can be verified? I am not sure about stock, futures but I have not been able to find any price pattern that has a testable edge in the forex market.
Most patterns have a 50-50 WL ratio and when spread is factored in, it is a losing proposition.
Take a look at Bulkowski's Pattern Site. He ranks the patterns and back-tested many.
Read Schabacker's book on Patterns he states the most reliable are
1. Head and Shoulders
2. Ascending and Descending Triangles
3. Break outs in rectangles
4. Break outs in symmetrical triangles
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Price, Patterns, and Support and Resistance.
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Quick update:Today I was getting maybe a little too confident. Thought I was maybe over trading today and "trading just to trade" but the trades made sense to me and they all worked out. Maybe I was just confident with what I was doing and listened to my brain/gut.
Anyways, so far so good. The losses will come obviously, hopefully later than sooner. Best of luck this year!
Thinking about your comment on Over Confidence. Mark Douglas has some great insight...
"When you’re winning, you are least likely to concern yourself with anything that might be a potential problem, especially something that feels as good as euphoria. One of the primary characteristics of euphoria is that it creates a sense of supreme confidence where the possibility of anything going wrong is virtually inconceivable.
Conversely, errors that result from self-sabotage have their root in any number of conflicts that traders have about deserving the money or deserving to win. It’s when you’re winning that you are most susceptible to making a mistake, overtrading, putting on too large a position, violating your rules, or generally operating as if no prudent boundaries on your behavior are necessary.
You may even go to the extreme of thinking you are the market. However, the market rarely agrees, and when it disagrees, you’ll get hurt. The loss and the emotional pain are usually significant. You will experience a boom, followed by the inevitable bust."
Douglas, Mark (2001-01-01). Trading in the Zone:
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Hi everybody,first of all, I am fascinated by the world of trading. I see a lot of potential there. I've never been the kind of person who would think that a 9-5 job is the way to live well.
I would like to ask for advice on how to become successful.
Thanks for the help.
Starting in day trading is more difficult then swing trading where you want to hold a position for a day or longer.
Personally I will say this. I started with futures back in the late 90’s thinking if I only focused on corn, wheat, pork bellies, crude that I would be an expert. I thought Yea! I can trade from home and get out of the rat race. How wrong I was that I thought trading could be easy. Man it is a tough game because it is a battle with yourself.
I used MACD, RSI, Stochastics, Moving Average crossovers…all the same traps beginners fall into. After making money, losing money I stopped trading futures. Then thanks to the internet boom I made money just moving money from one new mutual fund to another.
After that internet boom-bust was done I was back to trying to figure out how to trade.
I purchased AMIBroker software. Being a software developer I thought I would code and back-test a trading system. I spent hundreds of hours over many years writing trading systems. I also back-tested many indicators...
1. MACD crossovers
2. MACD crossing Zero
3. RSI crossing 50
4. RSI oversold/overbought
5. Stochastic
6. EMA/MA crossovers
7. VMA… and more
I even wrote a system that would combine many indicators and I created a “Consensus Indicator” thinking the More the Better. That failed too.
Out of all the back-tests the best was MACD crossing zero which what 33% win rate.
I let the market for years out of frustration and disgust leaving money in CDs, and some mutual funds when the market looked like it was going up.
Still, I really want to be in “the game” I enjoy it. It is a personal learning experience and a chance for personal growth. Now the only things I have on my charts is the price in black and white, with HLC bars, volume and a couple of MAs. NO INDICATORS! For me they just cause me to second guess myself and lead to confusion. Maybe some folks can use them but they are not for me. I needed to find a method that worked for me and went back to chart pattern analysis only.
In short this is what I am saying.
1. To learn how to trade you will need to put some money on the line and suffer the pain of losing
2. When you have enough pain you will see you need to find a system that works for you, and try to understand why you keep losing.
3. When you trade and you start searching all over the internet to see what people think, what the experts are doing, or other traders are thinking…STOP you need to build trust in yourself.
The best thing (in my view) is read many, many books on trading until something really speaks to you. Put some small bets on stocks, etfs, or commodity ETFs. Make small bets. 100 shares, 2 calls or puts. This way you can still suffer the pain of losing but you will not go broke.
The best books, in my experience are
1. Technical Analysis and Stock Market Profits (1930s’). This is where it all started. It reads like it was written today.
2. Technical Analysis of Stock Trends (1940) They got their ideas from Schabacker’s book above
3. Jesse Livermore: World's Greatest Stock Trader
4. Trader Vic
5. Trading in the Zone
6. Ahead of the Curve
Books such as #3 Livermore or #5 Trading in the Zone may not really ring true for you until you hit a brick wall and cannot figure out why you cannot make money in the market. Still they are good reads but should be read again when the pain of losing seems too much to handle.
Also, be ready to commit to many many years of trying to get it right. If you like challenges trading are the ultimate challenge. I am still working on it and working on the Trading Plan outlined in Trading in the Zone.
To speak about how long it takes to find a setup. Trading in the Zone recommends 20 trades to apply your trading plan. I am on trade #18 and have been at it for almost two months.
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Douglas also had a great approach to work on building trading skills.
He outlined a 20 trade excercise using your trading plan.
1. Trade 20 trades
2. Follow your plan to a tee
3. Document the results (journal)
4. Do not set a specific amount of time to finish the exercise. It may take a couple of months.
5. Start another block of 20 trades when you are done.
6. When you can get through 20 trades and sticking to your plan you will have made some progress.
I am personally on trade #18 and I have learned a good deal about myself. I have traded on and off for many years but sticking to a plan and this exercise gave me many insights into myself.
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This is not a prediction, but a wonderful insight from Schabacker on false breakouts.
He discussed trading (for example) breakouts in a triangle and then a false breakout (he calls "out of line movement) will give the trader insight into the direction of the true breakout.
The key is this, if you got whipped on the out of line movement, then you got an idea that the stock will break out in the direction ouf the out of line, and then the next entry may be the correct one.
"To the trader who did not act prematurely, however, the one-day out-of-line gave valuable information. It suggested, first, that the pattern of price trend would be up, in the direction of the out-of-line movement." - Richard Schabacker
Free Commodity Tips and Commodity Trading Levels.
in Stocks
Posted
This thread made me think of a quote by Jesse Livermore...
"A man must believe in himself and his judgment if he will make a living at this game. That is why I don't believe in tips. If I buy stocks on Smith’s tip I must sell those same stocks on Smith's tip. I am depending on him. Suppose Smith is away on a holiday when the selling time comes around? No, sir, nobody can make big money on what someone else tells him to do.
I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment. It took me five years to learn to play the game intelligently enough to make big money when I was right. " - Jesse Livermore