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RE: Stage Analysis Beginners Questions - ikhlef1995 - 2020-08-10
Also, what about this stock. Same thing:
1- Price just went above SMA
2- Impressive volume
3- RS just went above 0
On a scale of 1 to 10?
Thanks
RE: Stage Analysis Beginners Questions - isatrader - 2020-08-10
(2020-08-10, 04:00 PM)ikhlef1995 Wrote: I just came across this stock and I think it's potential winner:
1- Price just went above SMA
2- Impressive volume
3- RS just moved into positive territory
I know there's a lot of overhead resistance but the Stage 1 is extended over 8-9 months which leads me to believe that the resistance is not as significant. I'm wondering what other more experienced people think about it on a scale of 1 to 10.
Thanks
Although it's made a big move of the low. It would be considered too early in the method, as the Stage 4 decline was extreme and over a long period. So the resistance will be very heavy for a long time. Also the heaviest volume spikes were actually selling volume by the looks of the weekly candles. As they gave up over 90% of the candles and closed near the lows.
See the Chapter in the book about the Less the Resistance the better.
(2020-08-10, 04:07 PM)ikhlef1995 Wrote: Also, what about this stock. Same thing:
1- Price just went above SMA
2- Impressive volume
3- RS just went above 0
On a scale of 1 to 10?
Thanks
This suffers from a similar problem. As it has a big area of resistance above the current level. So would be considered too early in the method.
Try to focus on stocks that are making at least 6 months highs on their breakouts, ideally 52 week highs or more, with little visible resistance on the chart and a decent base pattern, instead of bottom fishing. As Weinstein's method is about buying high and selling higher.
I hope that helps.
RE: Stage Analysis Beginners Questions - ikhlef1995 - 2020-08-10
Yep, it does help. I've made that mistake before (of buying a similar looking stock but with much overhead resistance). Not gonna make that mistake again.
Thanks isa.
RE: Stage Analysis Beginners Questions - daddybyday - 2020-08-13
Hello, All!
I was wondering if you could address the topic of portfolio management a bit? How many trades do you have active at a time? Do you set your trade size by the risk percentage in your portfolio, allocating a set percentage to each trade, or some other method? I'm wrapping my brain around this type of trading, doing the course on Udemy (have only the trader entry and the 3 minute conclusion video to go), and am considering how I'm going to transition to this type of investing. I'd love to hear your thoughts!
Thanks!
Tom
RE: Stage Analysis Beginners Questions - isatrader - 2020-08-13
(2020-08-13, 06:15 AM)daddybyday Wrote: I was wondering if you could address the topic of portfolio management a bit? How many trades do you have active at a time? Do you set your trade size by the risk percentage in your portfolio, allocating a set percentage to each trade, or some other method? I'm wrapping my brain around this type of trading, doing the course on Udemy (have only the trader entry and the 3 minute conclusion video to go), and am considering how I'm going to transition to this type of investing. I'd love to hear your thoughts!
For me personally it varies between my investor portfolio and my trader portfolio's. I like to be fairly focused, much more along the lines that they talk about in the CAN SLIM method of around 4 to 10 stocks at a time. But, I have been up to around 15 stocks in my short term trader portfolio recently, as I don't like to get more focused into less stocks until they start moving through additional Stage 2 continuation buy points and the market conditions are favourable.
I use my own method for risk management based on the individual stocks volatility, by using the 52 week Average True Range to adjust my position size, so that all my stocks risk the same amount (roughly 2% of the account) to their stop loss position. This means that more volatile stocks have much smaller position sizes than larger less volatile stocks.
Thanks for taking the course on Udemy. I hope you've enjoyed it. It's only a short primer on the methods stages and entry points, but I try to stress the importance of focusing on the method requirements for getting into the best stocks. As a lot of beginners to the method try to do the opposite, and pick stocks that have had massive Stage 4 declines, and virtually no Stage 1 base and loads of resistance, instead of the stocks with the strongest relative strength, volume and very little or no near term resistance.
RE: Stage Analysis Beginners Questions - daddybyday - 2020-08-13
(2020-08-13, 10:32 AM)isatrader Wrote:(2020-08-13, 06:15 AM)daddybyday Wrote: I was wondering if you could address the topic of portfolio management a bit? How many trades do you have active at a time? Do you set your trade size by the risk percentage in your portfolio, allocating a set percentage to each trade, or some other method? I'm wrapping my brain around this type of trading, doing the course on Udemy (have only the trader entry and the 3 minute conclusion video to go), and am considering how I'm going to transition to this type of investing. I'd love to hear your thoughts!
For me personally it varies between my investor portfolio and my trader portfolio's. I like to be fairly focused, much more along the lines that they talk about in the CAN SLIM method of around 4 to 10 stocks at a time. But, I have been up to around 15 stocks in my short term trader portfolio recently, as I don't like to get more focused into less stocks until they start moving through additional Stage 2 continuation buy points and the market conditions are favourable.
I use my own method for risk management based on the individual stocks volatility, by using the 52 week Average True Range to adjust my position size, so that all my stocks risk the same amount (roughly 2% of the account) to their stop loss position. This means that more volatile stocks have much smaller position sizes than larger less volatile stocks.
Thanks for taking the course on Udemy. I hope you've enjoyed it. It's only a short primer on the methods stages and entry points, but I try to stress the importance of focusing on the method requirements for getting into the best stocks. As a lot of beginners to the method try to do the opposite, and pick stocks that have had massive Stage 4 declines, and virtually no Stage 1 base and loads of resistance, instead of the stocks with the strongest relative strength, volume and very little or no near term resistance.
Thank you for your feedback. That is a nut that I still have to crack, but as I'm currently almost fully invested, and most of those stocks seem to be in or near stage 2, I have time to work that one out.
Thanks!
Tom
RE: Stage Analysis Beginners Questions - daddybyday - 2020-08-14
Hello, All,
One final NOOBISH question for the night. How are you all tracking your trades? I was looking at some Google Sheets templates, and am just curious as to what you are using? Or do you recommend using that type of resource?
Thansk!
Tom (I'm really logging off, and won't post any more annoying questions tonight) ;-)
RE: Stage Analysis Beginners Questions - ianbate222 - 2020-08-14
Hi Isa,
I am looking at Weinstein's book where he discusses signs of market tops. I am now following your market health indicators and wonder if they flashed a warning sign before the market top in February. So far based on your market health indicators that you post weekly the market looks healthy.
Good job with the Udemy stage analysis course. Lots to learn there from you.
Ian