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RE: Beginners Questions - Tom - 2014-02-11
(2014-02-11, 04:48 PM)theblackmamba Wrote: not forgetting they could pull out and it falls....gotto consider the bad scenario as well as good..
Thank you all for the advices, esp the sell stop.
The news said that the two companies have entered a definitive agreement so I guess it is not a hostile takeover right now.
Regarding the sell-stop, since the deal price is $14 and today trading range is $13.96 - $13.99, what's the rule of setting sell-stop in this case?
I have two choices: setting sell-stop for all positions Or selling half of my positions now..
RE: Beginners Questions - MalcolmSm1th - 2014-02-17
I am going through the Weinstein book very carefully this time and making notes. What I am aiming to do is to make a complete and consise set of rules and guidances because there's a lot in here and as we know, in a wall of examples may be a key rule to observe.
Anyway, I am looking at Chapter 3 "An Ideal Time To Buy" and this is where he differentiates between his INVESTOR method and his TRADING method.
With the INVESTOR method he has two entry points to a trade. The first is on an early stage 2 breakout for half the stake and the other is the possible pullback to to the old resistance/breakout point (page 59)
With the TRADER method he has two possible entry points. The first is at the start of the stage 2 at the breakout which is the same as the Investor's initial entry point. The second entry point is at the Continuation breakpoint which happens higher up the price chart when the price takes a breather and then takes off again (assuming that the MA is still progressing) (pages 61 & 62)
That's both clear and understandable. The problem I have is on page 63 when he says that the Investors should do "75 to 80% early stage two buying with the remainder coming from continuation moves".
Now, since that continuation moves have been clearly marked as the sole domain of the trader can someone explain what he means here. Surely he doesn't mean 'pullbacks' or does he?
- Malc
RE: Beginners Questions - isatrader - 2014-02-17
(2014-02-17, 07:12 PM)MalcolmSm1th Wrote: ...The problem I have is on page 63 when he says that the Investors should do "75 to 80% early stage two buying with the remainder coming from continuation moves".
Now, since that continuation moves have been clearly marked as the sole domain of the trader can someone explain what he means here. Surely he doesn't mean 'pullbacks' or does he?
No, as I understand it he's talking about the trader continuation moves, as as you said, he recommends investors should do 75 to 80% of early Stage 2 buying, the remaining 20 to 25% should be good quality Stage 2 continuation moves. i.e ideally breakouts from big Stage 3 consolidations like multi year cup and handle patterns that breakout to new highs with the usual volume requirements. He's not talking about minor Stage 2 continuations imo, but the first significant Stage 2 continuation would be a good spot also, and even better if that continuation move coincides with a monthly Stage 2A breakout imo.
QPP.L is a good recent example of a strong continuation pattern to new highs with multi year pattern imo. It recovered from a brief but sharp Stage 4 breakdown and then consolidated for many months before making the Stage 2 continuation to new all time highs with increasing volume.
RE: Beginners Questions - malaguti - 2014-02-17
(2014-02-17, 07:12 PM)MalcolmSm1th Wrote: I am going through the Weinstein book very carefully this time and making notes. What I am aiming to do is to make a complete and consise set of rules and guidances because there's a lot in here and as we know, in a wall of examples may be a key rule to observe.
Anyway, I am looking at Chapter 3 "An Ideal Time To Buy" and this is where he differentiates between his INVESTOR method and his TRADING method.
With the INVESTOR method he has two entry points to a trade. The first is on an early stage 2 breakout for half the stake and the other is the possible pullback to to the old resistance/breakout point (page 59)
With the TRADER method he has two possible entry points. The first is at the start of the stage 2 at the breakout which is the same as the Investor's initial entry point. The second entry point is at the Continuation breakpoint which happens higher up the price chart when the price takes a breather and then takes off again (assuming that the MA is still progressing) (pages 61 & 62)
That's both clear and understandable. The problem I have is on page 63 when he says that the Investors should do "75 to 80% early stage two buying with the remainder coming from continuation moves".
Now, since that continuation moves have been clearly marked as the sole domain of the trader can someone explain what he means here. Surely he doesn't mean 'pullbacks' or does he?
- Malc
Funnily enough I'm doing exactly the same thing, in fact what I'm putting together is a rating score, given that not all trades are equal. bonus points for the higher time frame for example, and a rating depending on which stage the sector may be in..
anyway, to your question (and my interpretation could be wrong) but he does state that although the pullback to the breakout point is the least riskiest entry and where you would add to your second half, its not always the case that it will indeed pullback. so in those circumstances, rather than chasing the trade (another of his don'ts) you would use the continuation setup
That's what I took out of that anyway
Good luck Malcolm
RE: Beginners Questions - isatrader - 2014-02-17
(2014-02-17, 07:29 PM)malaguti Wrote: Funnily enough I'm doing exactly the same thing, in fact what I'm putting together is a rating score, given that not all trades are equal. bonus points for the higher time frame for example, and a rating depending on which stage the sector may be in..
anyway, to your question (and my interpretation could be wrong) but he does state that although the pullback to the breakout point is the least riskiest entry and where you would add to your second half, its not always the case that it will indeed pullback. so in those circumstances, rather than chasing the trade (another of his don'ts) you would use the continuation setup
That's what I took out of that anyway
Good luck Malcolm
A scoring system that I came up with that might help you. I call it SATA (Stage Analysis Technical Attributes):
StageAnalysis Technical Attributes - SATA
- 10 Week Simple MA Rising
- 30 Week Weighted MA Rising
- 30 Week Simple MA Rising
- 52 Week Mansfield Relative Performance above Zero Line
- Relative Performance 30 Week Weighted Moving Average Rising
- Force Index Cumulative Volume above 9 Week MA (on a buy signal)
- Force Index Cumulative Volume 9 Week MA Rising
- Weekly MACD above Zero
- Price Greater than the weekly Kijun Line (part of the "Ichimoku Kinko Hyo" method, which focuses on dynamic support and resistance zones.)
RE: Beginners Questions - MalcolmSm1th - 2014-02-17
Thanks for these two answers.
It would be good to compare notes, Malaguti, when we're done. For example I remember reading at which percentage a stop level should be placed but can I find it now? Never mind, on this trawl through I will come across it again.
I get the impression that initially Weinstein wrote his book about trading only and did all the charts with his 30 MA. Then somewhere along the line he decided that he had Investors as well. So the initial Traders became Investors and then the Investors were the new class with the new 10 MA.
The charts weren't re-drawn so we have the wrong moving average on them and whilst he shoehorned the new class in the book with new subtitles the proof-reading and editing wasn't up to much and I think that this is why we have the problems with understanding what's going on.
Anyway, that's my personal belief as to the cause of the confusion which we have in the book. Anyway, that's my belief and I could be the only one confused here.
I will push on with the book and highlighter from where I am and see what sort of document I can build. If I ever finish may I be permitted to share it on here?
- Malc
RE: Beginners Questions - isatrader - 2014-02-17
(2014-02-17, 08:40 PM)MalcolmSm1th Wrote: Thanks for these two answers.
It would be good to compare notes, Malaguti, when we're done. For example I remember reading at which percentage a stop level should be placed but can I find it now? Never mind, on this trawl through I will come across it again.
I get the impression that initially Weinstein wrote his book about trading only and did all the charts with his 30 MA. Then somewhere along the line he decided that he had Investors as well. So the initial Traders became Investors and then the Investors were the new class with the new 10 MA.
The charts weren't re-drawn so we have the wrong moving average on them and whilst he shoehorned the new class in the book with new subtitles the proof-reading and editing wasn't up to much and I think that this is why we have the problems with understanding what's going on.
Anyway, that's my personal belief as to the cause of the confusion which we have in the book. Anyway, that's my belief and I could be the only one confused here.
I will push on with the book and highlighter from where I am and see what sort of document I can build. If I ever finish may I be permitted to share it on here?
- Malc
Of course you can post your notes on here. Also, if you want, you can start a thread in the journals section, as you are permitted to have your own thread in there, and so you can post your notes and charts etc and create a note book to refer to if that would help. It would be your own thread, so you could create a good resource for yourself and others.
I would disagree about what you said above in that he favours trading over investing as in multiple interviews he's stressed that the long term is a 10 on the Richter Scale and the short term is only a 2 out of 10, and always seems annoyed by the short term questions. The book is also largely focused on the investor method, with only a small parts on the trader method, which is why we've had to discover more about it over time from the Global Trend Alert newsletters and other resources and interviews, which is why the books by Mark Minervini and William O'Neil have been so useful imo, for the shorter term traders as both focus much more on the trader method style of stock picking and timeframe and Minervini's book specifically expands on Weinstein's work for short term traders.
RE: Beginners Questions - acito616 - 2014-02-17
(2014-02-17, 07:37 PM)isatrader Wrote:(2014-02-17, 07:29 PM)malaguti Wrote: Funnily enough I'm doing exactly the same thing, in fact what I'm putting together is a rating score, given that not all trades are equal. bonus points for the higher time frame for example, and a rating depending on which stage the sector may be in..
anyway, to your question (and my interpretation could be wrong) but he does state that although the pullback to the breakout point is the least riskiest entry and where you would add to your second half, its not always the case that it will indeed pullback. so in those circumstances, rather than chasing the trade (another of his don'ts) you would use the continuation setup
That's what I took out of that anyway
Good luck Malcolm
A scoring system that I came up with that might help you. I call it SATA (Stage Analysis Technical Attributes):
StageAnalysis Technical Attributes - SATA
Basically, you give a score for each point and it's very useful to determine the stage a stock is in. I've included it with all the examples from Weinstein's global trend alert in the elite section, but a rough guide is that Stage 2A is generally in the 7 to 9 score range with a weighting towards 9. Stage 1B had scores in the 5 to 8 range, with a weighting towards the 8 side of that range, and Stage 1 had scores in the 5 to 8 range with a weighting towards 7. Whereas Stage 1A had scores in the 4 to 7 range with a weighting towards a score of 5. So that should give you the gist as obviously Stage 1 and 3 will be in the middle of the range with slight bias to either side, and Stage 2 will be at the upper end, and Stage 4 at the bottom end of the scale.
- 10 Week Simple MA Rising
- 30 Week Weighted MA Rising
- 30 Week Simple MA Rising
- 52 Week Mansfield Relative Performance above Zero Line
- Relative Performance 30 Week Weighted Moving Average Rising
- Force Index Cumulative Volume above 9 Week MA (on a buy signal)
- Force Index Cumulative Volume 9 Week MA Rising
- Weekly MACD above Zero
- Price Greater than the Kijun Line (part of the "Ichimoku Kinko Hyo" method, which focuses on dynamic support and resistance zones.)
I'm intrigued by rule 9 of your SATA scoring, "Price Greater than the Kijun Line (part of the "Ichimoku Kinko Hyo" method, which focuses on dynamic support and resistance zones.)". Don't remember seeing it in Weinstein's book, guess I'll have to do some google searching.