Forum Archive Index - June 2001

["Grant Keymer" <grant@jenlogix.co.nz>]

An EXCELLENT post, thanks Phaedrus.

 

And thanks also for (much of the time) single-handedly promoting the virtues of TA to the uninitiated (such as myself).  I must admit that at first I thought it WAS snake oil, having been swayed by statements from others on this forum that charts could not predict the future.

 

However, after watching my TLS shares go up and down like a roller-coaster, I realised I had missed several profitable trading opportunities in the 18 months I have held them.  But being new to the game, I didn't have the confidence to know when to make the trades.

 

Don't get me wrong, I have no ambition to be a day-trader.  Some of my shares e.g. CEN and FFS are relatively stable, with a fairly certain long-term growth path.  Buy-and-hold seems to be the most sensible strategy there, although if someone offers a silly price...

 

However, there are others such as TEL/TELCA/TELA which I have successfully traded a few times now, and come away with 50% profits each time.  All has gone well on shares which have RISEN in value...

 

But this aspect of setting a Stop-Loss had me stumped:

 

By means of occasionally selling good stocks at a good profit, and holding on to my mistakes, I gradually
selected a portfolio of underperforming stocks. My overall performance was, as you may guess, mediocre - consistently underperforming the Index. I was making good gains, but my cumulative losses were negating them to a significant extent.

 

This is where I'm at right about now.  I have some stars e.g. SOE and AIA, but I also have some dogs like ADV and THL.  A disciplined stop-loss strategy would have saved me a lot of angst in the case of ADV  :(

 

But lessons don't come cheaply in this game, and I can see where a good charting program and Stop-Loss strategy would have saved me from several costly mistakes.  Not to mention confirming the right times to trade cyclical stocks such as TLS or TEL.  With TEL, I've mostly got it right more through good luck than good management.  But TLS is another story...

 

So, having been enlightened over the past couple of months by your excellent posts on TA, I searched through the archives for mention of a good charting program.  I'm happy to say I decided to try Fund Manager Professional Version which is shareware, so you can try before you buy.  I believe it has a 2-month trial period, which should be plenty.

 

From what I've seen so far, I'm blown away!

Fund Manager can do nearly all the clever stuff you've introduced me to, Phaedrus, but it only costs US$100 when you register it.  >From the look of your graphs, you're using Metastock -- is that right?

 

Anyway, I've downloaded about 60 pages of stuff from the "Day Trader" series at:  http://daytrading.about.com/money/daytrading/library/weekly/topicsub_ta.htm

(just in case anyone's interested).

 

It explains all the stuff like MACD, EMAs, Bollinger Bands, Oscillators, etc, etc...

 

After having looked at the indicators you've used Phaedrus in your excellent charts, I set up something similar for TLS.  The MACD Histograms are a very powerful tool for indicating good buying and selling opportunities, and when MAs or EMAs cross, it can be a sign that something is about to happen.

 

Anyway, enough rambling from me.

I just wanted to say thanks for opening my eyes, and while I've yet to make a trade on the basis of my new-found knowledge, it's great to have such a powerful analytical tool at my fingertips.

 

Cheers

 
Grant Keymer
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