Stage Analysis Beginners Questions

#33

RE: Beginners Questions

Quote:It's a good question, but unfortunately there is no definite answer. In my Q&A with Weinstein recently he said: "I suggest doing secondary buying when a stock pulls back close to the breakout point, and you then see it stabilize near that level."

So it's a judgement call on whether you think the stock has stabilized and something for my list for us to explore on here. Personally, I tend to identify the area of support and then watch for a stock to make a new potential swing low in that area. I determine this by the stock making higher close and then closing the following day above the previous days high. i.e. it's stopped making lower highs and has made a higher high, as well as a higher close, and so has in the very short term at least stabilized a little. There are many other ways, but that's what I look for, as well as obviously watching what the broad market is doing, as it has very big effect on most stocks intra-day movements.

Since the question just came up, I thought I would post this here- What do you guys think about a pullback entry. I'm not sure as it has already breached support..but, I like what you said ISA about waiting for a higher close tomorrow than today's high. I usually just play it by ear as watching the broad market as you said isa but generally pull the trigger without waiting for a definitive close above previous high. I haven't been around very long so it is nice to read that tip-
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#34

RE: Beginners Questions

(05-22-2013, 11:03 PM)Locked in Wrote: Since the question just came up, I thought I would post this here- What do you guys think about a pullback entry. I'm not sure as it has already breached support..but, I like what you said ISA about waiting for a higher close tomorrow than today's high. I usually just play it by ear as watching the broad market as you said isa but generally pull the trigger without waiting for a definitive close above previous high. I haven't been around very long so it is nice to read that tip-

Hi Locked in, attached is an example of what I was talking about, using the weekly and daily chart of HAL. I can see two potential pullback entries using the method I suggested in the previous post, where it pulled back to the Stage 2A breakout level at 38 and made a swing low. There where other times earlier in the pullback when it also made minor swing lows, so as I said before it's going to be a judgement call, and will need to take the broad market into consideration as well.

As this is an investor method pullback to the Stage 2A breakout point, the stop loss would have been way down below the prior major swing low, as it's not moved up until price moves up to the swing high following the breakout, which was at 43.96, and so would have only been raised in the last week below the final April swing low.

So using this example, I'd say your GREK etf hasn't given a buy-if candle yet, as it's still making lower closes, and first needs to make at least a higher close than the previous day.

I hope that makes sense, and is one fairly simple method. But I think it might be worth doing some swing trading entry research, as this is one of those grey areas that the book doesn't give any guidance on.



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isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#35

RE: Beginners Questions

I have had this thought bothering me and so I am going to ask it. I understand we have Stage 1, 2, 3, 4 but does EVERY stock go through an A & B eg. 2A then 2 then 2B. Does a stock ever skip a phase? Like going from 1B to 2, skipping 2A.

RUTrading

"The more mechanical I've made my system and the less subject to judgments and emotions, the more profitable it has become." Stan Weinstein
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#36

RE: Beginners Questions

(05-25-2013, 05:21 AM)RUTrading Wrote: I have had this thought bothering me and so I am going to ask it. I understand we have Stage 1, 2, 3, 4 but does EVERY stock go through an A & B eg. 2A then 2 then 2B. Does a stock ever skip a phase? Like going from 1B to 2, skipping 2A.

It's an important question and something I was confused about at first when I was introduced to the sub-stages. The answer is no, every stock does not go through an A and B stage. In fact, some stocks skip the major stages as well, as for example you don't always get a Stage 1 base, as a sharp short covering rally can sometimes get momentum and just make a V shape bottom and move straight from Stage 4 into a Stage 2 advancing phase. This would play out with the stock looking as if it's moving into Stage 1A, but then just continuing higher on buying momentum, and so no Stage 1 base would be present on the chart.

This is why I continue to emphasize that the most important thing to learn first is to be able to visually identify the Stages, as then if a sub-stage is very short or skipped altogether, you can quickly identify it and take action. As if it's at the other end of the scale and the stock you own is in Stage 2B (late in Stage 2) and then drops sharply into Stage 4A (early in Stage 4), without forming a Stage 3 top, then you need to make decisions more quickly about taking profits and whether to wait until your trailing stop loss is hit or not etc.

Apple (AAPL) is a really good example of this occurring, as it moved from being in Stage 2B at it's peak near 700 down for eight straight weeks into Stage 4A without forming a Stage 3 top.

So think about the A and B stages in a different way. "A" is early in the Stage, and "B" is late in the Stage - so use your judgement and remember that Stage 3 tops and Stage 1 bases especially, aren't always going to go through the full range.

I hope that make sense.

isatrader

Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill – Reminiscences of a Stock Operator.
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#37

RE: Beginners Questions

(05-25-2013, 09:47 AM)isatrader Wrote: In fact, some stocks skip the major stages as well, as for example you don't always get a Stage 1 base, as a sharp short covering rally can sometimes get momentum and just make a V shape bottom and move straight from Stage 4 into a Stage 2 advancing phase.

Thanks isatrader, does make sense but I have mistakenly been looking for the Stage 1 base on all the stocks but now that you have correctly explain, some stocks will form a V shape bottom and not necessary form that base.

(05-25-2013, 09:47 AM)isatrader Wrote: So think about the A and B stages in a different way. "A" is early in the Stage, and "B" is late in the Stage -

One thing I battle with is telling whether it is a Stage 2 or Stage 2B, when we say late in the stage, is there a certain upward trend period you use to define late?

RUTrading

"The more mechanical I've made my system and the less subject to judgments and emotions, the more profitable it has become." Stan Weinstein
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#38
(This post was last modified: 05-25-2013, 04:17 PM by Locked in.)

RE: Beginners Questions

Hey RU, I think the interview where ISA asked Stan some questions will really help with that question. You can find the whole thing @ http://stageanalysis.net/forum/showthrea...d=1&page=9 on post number 67.

I took his answer as a strong need to familiarize yourself with the charts as much as possible and you will see when a run up is getting late in a stage by seeing the patterns of other stocks. However, you will see stocks break the trend and stick with a stage for a lot longer than average on occasion (like no pullback on the SP500 since Nov?!)..which is why he says it is a "gut feel" i guess. Anyway, check out his answer-



Quote:Q. In the GTA reports you have short descriptions of all the sub-stages, which weren't in the book. Is there anywhere we can get detailed information on the sub-stages from?

Also, the Stage 1 - Basing Phase. May begin accumulation has raised a few questions also. Like do you recommend someone using the investor method do any buying in Stage 1, and if so how to go about it? And the same question for people using the trader method, as I noticed in one of the interviews you mentioned that you recommended some trader buying even as early as Stage 4B- in some instances?

A. I really don’t have “detailed information” on the “sub stages” that you ask about. It’s somewhat of a “gut feel” (obviously when a stock is first breaking out of a base and moving into Stage 2, I label it “Stage 2A” (early in the advancing phase). And after it’s been in that stage and becomes extended, I label it “Stage 2B” (late in the advancing phase). And if I just put a “Stage 2” rating on the stock, theoretically, I feel that it’s not yet ridiculously extended and is in the middle of its move (but again there are no “hard and fast” rules).

Quote:So using this example, I'd say your GREK etf hasn't given a buy-if candle yet, as it's still making lower closes, and first needs to make at least a higher close than the previous day.

I hope that makes sense, and is one fairly simple method. But I think it might be worth doing some swing trading entry research, as this is one of those grey areas that the book doesn't give any guidance on.

As for the pullback entry points, Stan only said
Quote:A. I suggest doing secondary buying when a stock pulls back close to the breakout point, and you then see it stabilize near that level.

which I took it as trading sideways. The GREK is probably a bad example. But when I see a stock stop right on that breakout point (mid-day) and the next few days stop there as well (even if they might be closing lower), I see it as a pretty strong signal that the stock has hit its swing low. But in general I think you are completely right when saying as a general rule it is good to see a higher close than the previous day. Thanks for the answer.

I notice on Stan's pullback entry suggestions that he just says "on a pullback to around blah blah" which is a little vague because he can't be watching every stock for everyone..but, I'm honestly not so sure he would even think about it very much for his own trading. I have the impression he just wants to see it stop around there (the breakout) for a day or two and then get in with a tight stop. If he's right he's right..if he's wrong, he's wrong. Seems like he doesn't really care too much about the outcome of one single entry point because he knows on a better-than-average basis it will bounce there whether he watches it or not. That is the perception I have of him after seeing his answers to you and listening to him on financial sense.

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#39

RE: Beginners Questions

Problem a silly question but how you get a list of FTSE350 shares using the free daily ProRealtime package?
I can see FTSE200 and 300 but not the 350..

thanks!

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#40

RE: Beginners Questions

(05-25-2013, 03:48 PM)Locked in Wrote: A. I really don’t have “detailed information” on the “sub stages” that you ask about. It’s somewhat of a “gut feel” . but again there are no “hard and fast” rules).

Thanks Locked In, I guess I am just so focused on finding a "hard and fast" rules and going to need to start just learning the chart stages visually more.

RUTrading

"The more mechanical I've made my system and the less subject to judgments and emotions, the more profitable it has become." Stan Weinstein
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