Forum Archive Index - February 2002

[redredwine <redredwine@paradise.net.nz>]

Thank you Nick McGraw for your time and tolerance last Saturday.

Personally, I learned a few things I didn't know before and had a few other 
things that I did know reinforced.  As my quest since commencement a year 
ago has been for teachers and tools, the workshop went a fair way in adding 
to that base.  A dozen or so traders got together from various backgrounds 
all to learn something to improve our results in this industry and I'm sure 
we all took something away of benefit. I know I did.

Workshop Overview:

Fundamentally:
We must act on what the market is doing, not what we want it to be doing
Earnings and growth come from young companies whose profits are reinvested. 
Value companies pay dividends.
Undervalued companies are often older
No company grows forever
Coy must have a yield to pay dividends, if it doesn't then exit the coy.
Technically:
A trader needs discipline, he should 'plan the trade and trade the 
plan'...and not change half way through!
In combining TA and FA, we should search for undervalued coy's using 
fundamentals, have watchlists, use charts, and enter on a trend based 
strategy
Strategy:
One should have a plan for entry, monitoring and exiting, set it in action 
in order that it can execute without being present
and definitely use stop loss orders for that purpose. Take the 2 to 5 % hit 
if that is necessary in order to stay in the game, not more!
I should (and actually do) grade my entry and exit performance (ABC) and I 
need to develop good habits.
The Buy and Sell research and activity comprise only 10% of the nature of 
the industry,  the rest is Discipline and Strategy.
Risk = no Knowledge
Desire = Motivation
Calculate my intended %age profit on a trade before I enter it and have an 
exit strategy in case of error.
Charts:
Trending stocks are often fundamentally sound, steady, and needs less 
aggressive monitoring or trading, these trends can last months or years. 
Monitor with macd and channels and the like
Volatile stocks are irrational and need aggressive trading, they may not be 
fundamentally sound nor undervalued.  Monitor with oscillators and 
Resistance and Support.
It is definitely more advantageous to understand and use Candlesticks. They 
are more 'expressive' (somehow) and each shape can tell more than simply 
the OHLCV.  We covered them briefly.
We traced recent activity of a handful of stocks to review some of the 
information presented and to check how we would decide with that 
information.
For the second time this weekend I heard that the Australian market was 
infinitely better than the New Zealand for opportunities and growth.

The workshop took 4 hours and was designed for the beginner trader.  It was 
an overview and could not possibly instruct us in the details of great 
trading, that would come with experience I suppose.  I've heard that a 
Master is the one who does the basics exceptionally well all the time.

If anyone would prefer to enhance or clarify my notes above, please feel  
 free to do so, and I am looking forward to staying in contact with Nick 
for further knowledge as he seems very willing to share it.

Thanks again,

Ross

It is my hope and intention that I have re-presented the workshop in a true 
and fair light.


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