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TheRumpledOne
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Postby TheRumpledOne » Sat Apr 11, 2009 11:52 pm

The Simple Ten
Stockscores.com Perspectives for the week ending April 11, 2009


Experience has taught that the simple approach is usually the best, it seems to capture the essence of what is important. So, with that in mind, here is a list of the 10 simple things everyone should know about the stock market:

1. Price Trends Are Made of Moves and Counter Moves
A move occurs when the stock moves either up or down for a sustained period of time without a move in the opposite direction. A counter move is a price move in the opposite direction but with less intensity than the original move. Up trends join the bottoms of counter moves and downtrends form the tops of counter moves. Therefore, a trend is a series of upward moves, each followed by a short term downward counter move. The trend line is drawn across the lows of the counter moves, creating an upward sloping line.

2. Irrational Valuations Can Not Last Forever
Stock price is based on the present value of future earnings expectations. That means the company is worth what it can make in the future. The market's job is to figure out what a company can make in the future and discount that value back in to today's dollars and adjust for risk. When stock's price in earnings expectations that are far beyond the company's ability, the market is being irrational. Eventually, irrational behavior is corrected.

3. Irrational Behavior Can Last Longer Than Your Bank Account Can Afford
The market is efficient at pricing stocks but that does not mean it can not make mistakes in the short term. Investor emotion can cause the market to pay too high a price or accept too low a price for a stock and may inspire some investors to trade against this emotion, citing irrational behavior. However, the market has been known to stay irrational for a very long time and in doing so, take the hard earned investment capital of those betting against it. The lesson: don't fight against the market, it is always right.

4. Rising Bottoms Mean the Buyers Are In Control
If you look at a stock chart and see that the lows of the counter moves over time are rising from left to right then the buyers are in control of the market. Your success in buying stocks will be higher when you wait for the buyers to take control.

5. Falling Tops Mean the Sellers Are In Control
If you look at a stock chart and see that the highs of the counter moves over time are falling from left to right then the sellers are in control of the market. Your success in shorting stocks will be higher when you wait for the sellers to take control.

6. Uptrends Start Slowly and End Quickly
Bull markets are founded in skepticism and take time to develop. The upward trend will steepen as more and more investors take a buying interest in a stock. Eventually, too many investors will buy the stock and send it to irrational price levels which may then sharply correct downward.

7. Downtrends Start Quickly and End Slowly
Downtrends tend to start when irrational buying pressure gives way to a correction and the stock falls sharply, very quickly. The intensity of the downward move tends to dissipate over time until the downward trend becomes flat.

8. Trend Reversals Take Time, Exiting a Stock Takes Seconds
Investors are often unwilling to own markets that are acting irrationally, citing the likelihood of a correction is near. While this is true it should always be remembered that exiting a trade takes mere seconds and can be automatically executed with a stop loss order. Trend reversals usually take a few days to begin.

9. Public Information is Useless
There is no free money in the stock market. Companies that announce significant changes in the fundamentals of their business will see their stock price move almost immediately to reflect that new information. Using information that is already well disseminated will only produce random results.

10. Abnormal Activity Indicates Something Out of the Ordinary is Happening
To beat the market requires you trade on information that is not already well disseminated. This can be achieved with in depth research or inside knowledge. Within every company there are some people with this kind of information and they act in the market, leaving a trail to follow. New information is often highlighted by abnormal trading activity
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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TheRumpledOne
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Postby TheRumpledOne » Sat Apr 11, 2009 11:59 pm

A few quick questions (I often trade similar to this anyways) but just putting some thoughts out there.

1. assuming you are using 5 pips or grab what you can as a take profit - how does this work for you using say a 10 or 20 pip sl (I typically use the S/R line as my stop loss and then adjust my position size based on the distance to the S/R line). I guess what I am trying to ask is are you using static S/L's and position sizes or are you risk adjusting them based on the potential S/R level - larger SL - smaller position


I DON'T USE A SL OF 10 OR 20.

2 - Based on the trail indicator, which I am just starting to play with, I see you have a H1 bias indicator - essentially so you don't get caught on the wrong side of momentum - and that you are generating most entry signals on a retrace of the prior move and not entering on breakouts

I'LL TRADE THE BREAKOUT AND THE REVERSAL.

3. For the trail indicator, from your experience, is 5 the best setting for the i periods - or have you played around with that

YES, 5 IS THE BEST

4 - when you say that you have entered 3 times, how do you mean? [s]3 times on the same 15 minute candle? [/s] ( my bad, reading error) 3 successive 15 minute candles? Were all 3 profitable?

ONE ENTRY PER M15 CANDLE.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby MightyOne » Sun Apr 12, 2009 3:12 am

I have been trying out the 100 Bar ATR of the 2m chart + Spread = SL and it seems to be more than enough for scalping a quick gain.

10 pips = 1% always.


I purchased Nitro PDF Professional today & hopefully it is really easy to use so that I can get that e-book started.

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TheRumpledOne
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Postby TheRumpledOne » Sun Apr 12, 2009 3:37 am

MO:

I wish you would have asked me... there are FREE PDF makers.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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Postby es/pip » Sun Apr 12, 2009 3:59 am

MightyOne wrote:I have been trying out the 100 Bar ATR of the 2m chart + Spread = SL and it seems to be more than enough for scalping a quick gain.

10 pips = 1% always.


I purchased Nitro PDF Professional today & hopefully it is really easy to use so that I can get that e-book started.



are u talking about putting the dynamic trend lines on 2 min charts and scalping? intersesting----i like scalping----or did i misunderstand your statement-------------------------whiskey


did someone say ebook--------------------count me in :D

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Postby aVi » Sun Apr 12, 2009 5:22 am

I'm always game for a nice ebook.

A little late, but maybe that program isn't easy to use... if not, you can download Open Office for free and save things in PDF format. It's kind of like Microsoft Word - but open source, some actually like it better.
Wake up Mr. Green...

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Postby MightyOne » Sun Apr 12, 2009 4:01 pm

es/pip wrote:
MightyOne wrote:I have been trying out the 100 Bar ATR of the 2m chart + Spread = SL and it seems to be more than enough for scalping a quick gain.

10 pips = 1% always.


I purchased Nitro PDF Professional today & hopefully it is really easy to use so that I can get that e-book started.



are u talking about putting the dynamic trend lines on 2 min charts and scalping? intersesting----i like scalping----or did i misunderstand your statement-------------------------whiskey


did someone say ebook--------------------count me in :D


Whoh there :shock:

When you are trading a small TF like a 2m chart you are simply firing away in the direction of the trend when you feel that it is least
likely for price to immediately move to your SL.

The more profit you acquire the more powerful (staying power) you
become.

Its like HighLander in that you chop off the heads of the weak to gain enough power to go after the heads of the strong...there can
be only one 8)


My Trend:

1. I am long/short from the engulfing line.

2. Engulf from the low after a new high & engulf from the high after a new low.

3. A breakout cautions a reversal of trend

(intuition plays a large part in how you assemble 1, 2, 3, & the fractions of the whole to achieve your goal)

REMEMBER:

Your trend is placed on a fraction of the whole time frame (goal TF).

While the goal TF can be divided into up to 6 parts it becomes more difficult to assemble your goal when there are more pieces.

The goals are: DAY, WEEK, MONTH, & YEAR.

From those larger goals your automatically get:

HOURS, DAYS, WEEKS, & MONTHS w/ your entry charts being minute charts.

The smallest trend chart is 1440 / 6 or 240 minutes (which is shorter a time period than it looks).
Last edited by MightyOne on Sun Apr 12, 2009 5:02 pm, edited 1 time in total.

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MightyOne
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Postby MightyOne » Sun Apr 12, 2009 4:13 pm

TheRumpledOne wrote:MO:

I wish you would have asked me... there are FREE PDF makers.


The box was too shiny for me to resist :lol:

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TheRumpledOne
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Postby TheRumpledOne » Sun Apr 12, 2009 4:39 pm

Image

Image

Which pair would you trade?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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TheRumpledOne
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Postby TheRumpledOne » Sun Apr 12, 2009 4:41 pm

Image

Image


Which pair would you trade?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



Please do NOT PM me with trading or coding questions, post them in a thread.

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