Title: Gatlins Stock tips and money advice Source:
[None] URL Source:[None] Published:Feb 5, 2018 Author:Hopefully Gatlin Post Date:2018-02-05 18:32:47 by A K A Stone Keywords:None Views:26074 Comments:167
You wanna get rich? You just might if you follow this advice.
If I had a thousand bucks and I wanted to invest it for a month, what would you buy?
This is going to be difficult to answer. It will take time and some detailed explanation, but I will do this for you. First of all, I cannot answer the question as you posed it because I have never approached trading in that manner. Meaning, As a Swing Trader, I always place a Stop Loss order on each equity I purchase. So, the sell order occurs automatically and I therefore place no time restrictions on any stock buy. I am sometimes in and out of a stock within few minutes and often times I am in and out of a stock the same day, At other times, I am in for as long as a month or two before being being automatically sold out.
I will do this exercise for you in steps but it is important that I begin by presenting the definition of Swing Trading:
DEFINITION of 'Swing Trading'
Swing trading attempts to capture gains in a stock (or any financial instrument) within an overnight hold to several weeks. Swing traders use technical analysis to look for stocks with short-term price momentum. These traders may utilize fundamental or intrinsic value of stocks in addition to analyzing the price trends and patterns.
BREAKING DOWN 'Swing Trading'
The trader must act quickly to find situations in which a stock has the extraordinary potential to move in such a short time frame. Therefore, swing trading is mainly used by at-home and day traders. Large institutions trade in sizes too big to move in and out of stocks quickly. The individual trader is able to exploit such short-term stock movements without having to compete with the major traders.
Swing trading involves holding a position either long or short at least overnight and or up to several weeks. The goal is to capture a larger price move than is possible on an intra-day basis. Swing trading assumes a larger price range and price move and therefore requires careful position sizing to minimize downside risk. Swing trading can involve a mix of fundamental and technical analysis. Swing trades usually rely on larger time frame charts including the 15-minute, 60-minute, daily and weekly charts. Swing trades tend to require more holding time to generate the anticipated price move.
Day Trading Versus Swing Trading
The distinction between swing trading and day trading is the holding position time. Swing trading involves at least an overnight hold, whereas day trading closes out positions before the market close. Day trading positions are segmented to a single day only. Swing trading involves holding for several days to weeks. By holding overnight, the swing trader incurs the unpredictability of overnight risk resulting in gaps up or down against the position. By undertaking the overnight risk, swing trades are usually done with a smaller position size compared to day trading, which utilizes larger position sizes usually involving leverage through day trading margin. Swing trading can utilize the overnight margin of 50% if the account meets the pattern day trading (PDT) rule of maintaining at least $25,000 in account equity. Swing trading on margin can be extra risky in the event a margin call triggers.
A swing trader tends to look for multi-day chart patterns. Some of the more common patterns involve moving average crossovers, cup-and-handle patterns, head and shoulders patterns, flags, and triangles. Key reversal candlesticks, such as hammers for reversal bottoms and shooting stars for reversal price tops, are commonly used in addition to other indicators to devise a solid trading game plan. Stop-losses tend to also be wider when swing trading to match the proportionate profit target.
I will offer no advice....none whatsoever. But since you asked and definitely seem interested, I will do a ONE time walk-though exercise with you. I will tell you what I am now planning. I may modify my plan tomorrow morning depending on the opening price of the stock I choose.
I am out of the market right now. Fortunately for me, all of my stocks sold off automatically on Friday with a stop loss order at one percent. I started to buy back in today but decided not to because the market was so jittery.
BTW, no plan will get you rich in the stock market. But doing the right things consistently over the years can be comforting and enjoyable. There is an old addage many of you may have heard. It goes something like this: The way to make get one million dollars out of the stock market is to start with two million dollars.”
I will begin the first step walking you through it in my next post. This will be fun ...
Again, I understand what you are asking, Stone....but I have no answer for you. You definitely need to check with Pinguinite who declared in a post to me:
I don't think you know as much about trading as I do, Gatlin.
That being the case, I will at anytime graciously yield to his deep breadth of knowledge, his profound wisdom and great expertise as a stock trader.
Since I know of no quick-pick stock to buy when looking for a profit in 30 days. I will therefore explain my Swing Trading procedures for you....for what it’s worth.
When I am starting a new purchase, as I am now, I go to barchart.com and click on ”Stocks” and then on the next page I click on “New Recommendations” to wind up here. I then click on “16 stocks” [or whatever number is currently there] in the “100% Buy Signal” block and arrive here. I work my way down the page to find stocks with %chg” of at least a plus 1 percent. The first stock I find with that is an “old friend” I have lost money on twice before: DECK. But I could care less about before because today is a new ball game going forward.
. I check that DECK is listed on either the NYSE or the AMEX because only those exchanges permit Stop Loss Orders. So, I find DECK is listed on the NYSE. And I see that DECK has a “5-Day Change of +7.38% which fits my minimum of 5% for 5-days. I next check for “Avg Vol” of at least 100,000 shares. I want a large volume trade because with a low volume of say a couple thousand, I could be stuck there for days waiting for a buyer before my automatic Stop Loss Order kicked in. I see the DECK has an “Avg Vol” of 789,310....so I am still a “go” to move on to the next step.
At the drop-down “GO TO” block near the top, I select “Performance Report” and arrive here. It is not unusual to see a “+” for the “Past 5 Days %Chg.” Which when fitted in with all the previous perimeters would give the utmost perfect buy signal. However, here I see a three consecutive day climbs of “+” which is usually my minimum. BUT, when the graph below those numbers has a good steady climb, with no erratic up and down movements, I can go with as few as 2 positive upward movements.
DECK is definitely first on my consider list for tomorrow morning. A cursory glance shows there a a few more stocks I may add, but I will stop here for this exercise. I stay away form the high percentage jumps, like the 12 and 13 percent that caught my eye. With that kind of jump, I am pretty sure to see a drop the next day.
So there you have the first step of what I will be doing throughout the rest of this evening and at different times when I wake up during the night.
See you tomorrow morning when I will make a $10,000 purchase of DECK and be off and running to keep you posted on the progress over the next few minutes or I hope, the next few days. I mostly buy in with $20,000. But I am somewhat cautious considering the jittery movement of the market.
I mentioned that I have purchased DECK before with two losses. I bought back in each time my buy perimeters were met. Here are the results of one of those transactions. You will see the buy date, the number of shares I purchased, the Stop Loss Order price, the actual buy amount price and the actual sell amount price when the Stop Loss Order kicked in. Lastly, the plus and minus readings from right to left show that I bought the stock when it went up two days. Then it dropped down one day but not below 1%....then it went up two days only to drop the next to below my 1% Stop Loss and it automatically sold.
DECK - 01/26 Buy Date - 226 Shares – $88.02 Stop Loss – Buy Amount $19,995.33 – Sell Amount $19,791.34 – Daily Movement [read from right to left] -++-++.
I have been in and out of DECK at least once before this but I usually only keep the last five action days on record. I just happen to have 01/26 because I hadn’t gotten around to deleting it.
Don’t let this all sound too rosy to you. I have had some big gains as well as some huge losses since 1965. I had losses for one period over three straight years. But I had enough reserve capital to continue and enough guts to be persistent. But I do realize that as a trader, but for the grace of God, I could have wound up as big a loser today as I am a winner.
This is probably not what you are looking for Stone. In any case, it is all I have to offer. This is what I do throughout the trading day and for periods at night. You have to have a passion and a love for doing it hours at a time. It is not something to undertake part time. In between trades and while waiting for actions....I enjoy posting on LF.
Remember that this plan is not engraved in granite. Should I find it not working or needing a change....I will do that on a moment’s notice.
I don’t think this is really what you are looking for, Stone. But let me know if you are interested and I will continue with this exercise tomorrow morning. If you are not interested, I will not be offended should you want to save us both time by stopping here.
That being the case, I will at anytime graciously yield to his deep breadth of knowledge, his profound wisdom and great expertise as a stock trader.
I don't do stocks. I do forex. I work with the MT4 platform.
But reading your post it's obvious you do know about stocks, and in fact more about stocks than me. To go 3 straight years with losses and continue through to success is, while obviously not a streak to strive for, does require a professional mindset to survive. If you've done that, my hat's off to you for persevering.
But my comment about knowing more about trading than you do was based on your comparison (if it *was* yours) of bitcoin to the Hunt brother's attempt to corner the market, especially when the mechanism that killed them was a change in the trading rules substantially reducing their leverage which forced them to liquidate their silver positions, when you know, or should have known, that bitcoin obtained it's highs without any leverage being utilized at all, which while not proof bitcoin is quality asset, should nonetheless be respected as a remarkable achievement in the market. That is a very significant difference and seemingly one you missed. And after I point that out you claim the similarity is that both situations ended the party due to interference by authorities. Well, in the case of bitcoin/cryptos, no one government is big enough to do what an exchange did to the Hunt brothers because crytpo trading is decentralized, and that is it's trump card.
In my view, your comparison is a poor one and is why it was apparent to me that I knew more about trading than you.
But okay, since you are a professional trader, you already have a grasp on the importance of setting aside emotion when making trading decisions. So why is it you can accept 3 years of losses and remain optimistic about stocks, but when cryptos have 6 weeks of losses, you say the party is over for them? I would expect any pro trader to admit he cannot predict the market with more than a modest degree of certainty, but you clearly did. I've offered arguments in favor of cryptos based on the changing and growing technology the world is undergoing on ALL fronts and you ignore those arguments completely, simply quoting lots of old school types who don't see it. Apparently you are like them, old school, so what they say is easy for you to accept as authoritative and knowledgeable on the subject, but you, like them, are not even open to the possibility that maybe cryptos do possess some advantages in the market that conventional systems don't have. It's not unlike how pre-WWII, the navy brass refused to believe the battleship could be surpassed in naval supremecy on the high seas, ignoring General Billy Mitchell's warnings about how the airplane was now the superior weapon. He was courtmartialed and forced out of the military but after Pearl Harbor, ended up having an WWII aircraft named after him (and his rank restored).
So I say you cannot be locked into old tech, refusing to acknowledge the new, which is what you are doing. If you have an actual argument against cryptos, then by all means make it. But it seems you've hardly even tried to even field one. It seems instead your opposition to cryptos is emotionally based and you simply get on the same anti-crypto emotion train as all other naysayers, even though you already know emotions are the bane of any trader. So yes, I proceeded to make my observation about how I thought I knew more about trading than you.
So I say you cannot be locked into old tech, refusing to acknowledge the new, which is what you are doing. If you have an actual argument against cryptos, then by all means make it. But it seems you've hardly even tried to even field one. It seems instead your opposition to cryptos is emotionally based and you simply get on the same anti-crypto emotion train as all other naysayers, even though you already know emotions are the bane of any trader. So yes, I proceeded to make my observation about how I thought I knew more about trading than you.
Wow. You and I do have a failure to communicate. I will accept the fault blame for that and try harder to be more detailed in my statements.
I have nothing against new tech (bitcoin) and I am for anything (well, with certain exceptions....of course) I can make money from. And I can see the day that if bitcoin survives (as I hope that it does) there will be ways to do 2x and 3x buys and the same with short sells. The market always eventually provides those mechanisms.
It's not unlike how pre-WWII, the navy brass refused to believe the battleship could be surpassed in naval supremecy on the high seas, ignoring General Billy Mitchell's warnings about how the airplane was now the superior weapon. He was courtmartialed and forced out of the military but after Pearl Harbor, ended up having an WWII aircraft named after him (and his rank restored).
I find this to be cute, and I am not being sarcastic....you using Billy Mitchell as an analogy to me, a retired U.S. Air Force officer.
If you have never seen this, here it is ...
Hey, these last couple of exchanges have been good ones....thanks for that.
Personal note: This is the second day I am not working 20 to 30 trades. The Friday and Monday dips, which I was prepared for with Stop Losses but did not know when to expect, set me at ease for a couple more days now until trends are again established so I can determine which equities are moving up with a three-day upward progression.
Another good bit of advice: BUY LOW, SELL HIGH LOL !
Absolutely NOT.
I could write a multipage essay on the reason why not to....but in the interest of saving time, I will let Stephan Abraham explain here why it is a much better strategy to: “Buy High, Sell Much Higher.”
I am a firm believer in this and have successfully been for many years ...
I could write a multipage essay on the reason why not to....but in the interest of saving time, I will let Stephan Abraham explain here why it is a much better strategy to: “Buy High, Sell Much Higher.”
Interestingly, I came to the exact same conclusion myself.
But there are exceptions, as markets can become overbought or oversold. The difficulty in trading trends is by the time a trend is identified, momentum is exhausted.
I could write a multipage essay on the reason why not to....but in the interest of saving time, I will let Stephan Abraham explain here why it is a much better strategy to: “Buy High, Sell Much Higher.”
Interestingly, I came to the exact same conclusion myself.
But there are exceptions, as markets can become overbought or oversold. The difficulty in trading trends is by the time a trend is identified, momentum is exhausted.
I literally did cringe when I read that statement to: ”buy low....sell high.”
What was said in your post is all true.
There is an easy way to discover trends for someone who has an interest or need. It can be done even before the financial guru commentators make one a point of interest. I oft times use a newly established downward trend to preempt my 1% stop loss and to get out of some equities early. I generally only use trends for downside movement.
I will explain the way it is easy for me to almost immediately spot a trend.
I recently noticed the start of the run up in bank stocks before the alerts were issued. If you followed my system in a previous post, you can see how I work my way down a list of stock with a 100% buy signal recommendation while I am looking for those with over 1% increases to trigger the start of my selective process.
As I have done before, on one particular morning a couple weeks or more ago....I deviated from my buying strategy when I immediately noticed the high number of bank stocks that had their first daily increase of over 1% and 1% is the trigger I always look for. So, BAM....I was buying bank stocks within minutes after the market opened although they did not have the 2 or 3 day up momentum I normally require. There is much more to my buying strategy deviation on this particular point, but of no interest since I only wanted to show the way I can quickly spot a trend.
I say all this is passing just to agree with your point that trends are important.
While I am thinking about it, I will cover another point on trends relative for me. I don’t do much “short selling” and I only did it extensively when the silver stocks started to decline twice in the past. During down trends, I just relax and stay out of the market as I am presently doing on my third day now and I stay out until I see particular stocks have a 2 or 3 day up movement. I am not a greedy person and I don’t try to have it both ways. If I had a goal to make lots of money and be rich, which I will never have, then I would be “AC/DC” as far as market trend action was concerned and “work both ends.” [Pun Intended].
Oh, BTW [and I do need to stop sometime, maybe this is it]....I mostly always let the Stop Loss orders do my selling. However, you many have noticed how I keep sequential track of the up and down days with the plus and minus signs. Well, when I do have a large profit in a particular stock and I see two (-) days, then I usually dump it although ir has not reached my triggered sell point. Not that this is something you need to know....I just felt like spilling m guts out on this point at this moment and you had the misfortune to be here ... :)
In forex, the difference between going long and short is purely semantics, as it's always pitting one currency vs another. In fact, when you do a trade in forex, you actually commit to a long and short simultaneously, longing one currency while shorting another.
With stocks, the assumption is the US dollar value is fixed while the stock value fluctuates. In forex, both the dollar and a competing currency are understood to fluctuate in value relative to one another, and it doesn't really matter if the true absolute value changes. In fact if you long the EURO/USD pair and the EURO loses value, as long as the USD loses value faster than the EURO, you still make money as the chart registers an increase in price.
I suppose technically, when you buy a stock you are implicitly shorting the US dollar at the same time, as you are in fact trading dollars away to gain something you expect will perform better than those dollars will for the duration of the trade.
You don't travel beyond Scottsdale Arizona, do ya?
Oh, yea....I do get to Phoenix every week or so.
But beyond that, I don’t get out of Scottsdale anyone.
I used to though, when each year from 1965 through 1985, my wife and I spent a month each summer traveling throughout Europe while we based out of Austria.
After we gave that up, we bought a series of motor homes and traveled extensively throughout the U.S. until we got tired of doing that.
All I do now is just sit here all day and make money.
Ok, so this time I'll quote Buffett WITH ATTRIBUTION.
I don't find everything that Warren Buffett says to be particularly profound, but each of these particular nuggets of his wisdom I agree with completely. It isn't that he taught me, or you, these things. A lot of us learned these lessons from life. It's that he has a particularly pithy way of putting them such that they are memorable. We all had to reinvent the wheel getting the wisdom to recognize that he's right, but we don't have to all make our own maxims. Buffett's already given us some goodies.
Here are the ones that reflect my own view of the economic world:
(1) Don't invest in what you don't understand.
(2) Risk comes from not knowing what you are doing.
(3) It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.
(4) Our favorite holding period is forever.
(5) Only buy something you'd be perfectly happy to hold if the market shut down for 10 years.
(6) If you aren't thinking about owning a stock for 10 years, don't even think about owning it for 10 minutes.
(7) Diversification is protection against ignorance. It makes little sense if you know what you're doing.
(8) What we learn from history is that people don't learn from history.
(9) Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant.
And now one more quote, from Benjamin Franklin: "Put thy purse into thy head."
That's what I have learned about life from living it, and living life means dealing with money, since it's the medium of exchange. Buffett puts those ideas so nicely.
So, while others here have expertise in stock trading and currency markets, I think the real place to start is with life itself, because that's what we're investing FOR, and that's also what we each KNOW.
"Buy what you know" is a maxim similar to the first Buffett quote. Maybe, with sufficient resources, a man does get around to buying stocks or bonds. But before that, he grows up, gets educated, and has to figure out how to house, feed and clothe himself and, if he marries, to take care of his wife, and then a family.
And it may well be that the cost of doing those things devours his capital such that he can't seriously dabble in the stock or bond market. The first economic lessons are down there in housing and medicine, food and drink, and clothing, and education.
So that's where I'm going to spend the second portion of my own thoughts on this. (Way, way up thread I listed all of the innate advantage of being what I presume we all are: White, North American men of at least middle-of- the- middle class status.)
