Forum Archive Index - June 2001
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[sharechat] LEARNING TO INVEST >>>>> SETTING STOP-LOSSES
Jesse, Thanks for the positive feedback. So, even Nasdaq daytraders find charts
helpful!
Grant, Glad you found it enlightening. I feel honour bound, though, to try and
dampen some of your initial enthusiasm. Right now you don't want a US$100
charting package and 60 pages from a day-trading website. You want a 542 page
$140 book (you know the one.) Invest in your education rather than software at
this point. The software you are looking at was written primarily for portfolio
management. The TA bit is just a small later addition. Far from doing "nearly
all the clever stuff" it has less than a tenth of the functionality of
MetaStock (which I use), or any other good program. It can not test systems,
perform explorations, optimise indicator parameters, you can not create your
own indicators or systems, etc etc. Don't be blown away. I can show you free
systems with more functionality! I don't want to sound like a software
salesman, so I will email this info to you directly. I was relieved to see that
you have no ambition to be a day-trader. Don't be misled by Jesse's success.
Day-trading is by far the toughest arena of them all - most people fail at it.
My fear is that you may rush in to using TA before you understand it fully
enough. This would inevitably lead to losses, and the statement "I have tried
TA - it simply doesn't work". Suddenly Snakeoil has a supporter! Grant, forgive
me if I have seemed a bit hard on you, but it is for your own good, believe me!
Snoopy, I suspect that philosophically you and I are poles apart. Which is why
I find it intriguing that I often agree with you. Good points.
Mike G, Don't confuse a stop-loss with a trailing stop. A stop-loss is just
that - a device to limit your losses if a stock moves below the price you paid
for it. A trailing stop is to protect profits, trailing the price action such
that it is triggered by a fall in price, thus locking in profits. There is no
such thing as a trailing stop-loss.
Athol, ditto as per my reply to Grant.
One way or another we all have to pay our dues. The expensive way to learn is
from your mistakes. The cheapest is by study and reading books. Whatever your
approach (fundamental, technical or both) a substantial investment of your time
and effort is required. Skimp on these, and you will pay with very real money.
Technical Analysis is not a shortcut. There are no short cuts.
Phaedrus.
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