Trading Philosophy - Penny Stocks

mightybridge · Sun, 05-28-2006, 08:16 AM

I'm sure that all seasoned market traders have read the various books out there on trading philosophy. There is a vast amount of intriguing information for our enjoyment and education, from the Elder-esque psycologically founded views to the application of Tsu's Art of War to the markets. I'd just like to take a moment to share my trading philosophy and to hear what yours is all about, if you will be so kind as to indulge me.

I think of my trading style as patiently predatory. Let me explain. If you watch the Discovery Channel or National Geographic type shows a pattern quickly emerges whenever large predators are featured. It does't matter whether it's a show about lions, crocodiles, or killer whales. The most impressive predators hunt only when they have great odds of making a kill. The killerwhale goes for the baby seal in the surf. The lion attacks the young gizzelle. The crocodile eats the unsuspecting and virtually immobile, swimming baby water buffalo.

I think of myself as a bullish trader. I do not short stocks. I make my money by going long on a trade. I'm not talking about going long in the traditional sense. What I mean is going long in the sense that you buy at one price and sell later (10 minutes, 1 day, 1 week, 2 weeks max) at a higher price.

Since the market is about bulls and bears, locked in a constant struggle for victory, I see myself as a strong and patient predatory bull. I must do battle with the bears but rather than take on an angry, fresh and energized grizzly for a long duel, I prefer to attack a bear that has been fighting for a long time and has grown extremely tired. Like Sun Tsu reccomends to his generals, once the opportune moment presents itself (i.e. once the bear is bleeding and exhausted from his bout with other bulls and is about to collapse) I explode toward him from the brush with great power like a violent bolt of lightning! He has almost no chance of defeating me. Were the playing field even, he could destroy me but because I have waited patiently in my search for a weak and tired bear on whom I can feed (profit from), I will be the victor.

This very simple philosophy took me 4 years to discover, develop, and confidently execute. This is why I am the proponent of the bounce play. The strength of the bears can be gauged by taking into consideration factors like, support, resistance, volume, the rsi, the stochastic, the cci, bollinger bands, fib retracements/elliot waves, and moving averages. Whatever tools you use, learn how to put your finger on the pulse of the enemy to assess its status and then have the discipline and confidence to attack with full commitment. As Henry David Thoreau states, if we are to be successful, we must "advance confidently." I have garnered confidence through seeing my philosophy work for me time and time again.

After you do that, you will then need to master the incredibly difficult task of seizing the spoils of the battle of which you are the victor (you must learn to take your profits) before the hyenas (other traders) take them from you. But that is a discussion for another day.

eSology · Sun, 05-28-2006, 08:29 AM

Very nice...the obvious key to your success has been discipline. Keep up the good work.

mightybridge · Sun, 05-28-2006, 08:35 AM

You are a military man. I'm sure you can appreciate the fact that it is ideal to attack your enemy when he is most vulnerable. All traders are doing battle with other traders all the time because it really is true that in order to make money in the market, someone else must lose it. The fellow who sold me his IVHG at .021 on Friday did so because he thought it was going lower. No doubt when he saw it closed at .024 he was perplexed. I bought at 021 because I thought it was going up soon. This is THE GAME. With the bounce technique I see the pullback of the stock's value, on lower and lower volume, as a weakening bear. I attack when the other traders (the bear, if you will) are exhausted from the pullback, and then ride the rebound. If you can imagine thirty arch enemy armies (other traders playing a stock) converging onto the plains of a battle field right now in a quest for domination, and you had your troops (trading dollars) hidden and undetectable behind a hill, would you send them into the bloody massacre today or would you wait for your enemies to kill each other off for five days until only one tired, beaten down, wounded army remained? Of course you would wait and then destroy it 5 days from the day the first fighting began with your fresh and confident troops.

That is the essence of the bounce play. Using basic mathematics (odds) to your advantage and attacking/buying when a stock is ready to rebound, thereby surprising the exhausted bears who had prematurely claimed victory, is all I do. It's that simple.

Sun, 05-28-2006, 10:46 AM

I have to say that is a very interesting theory on trading and if I were to explain mine it would be somewhat similar. For the most part I like to bottom feed or find stocks that are just coming off support and have no resistance for a little ways up the road. CBAY was a example and MBAY imo is another great example coming up. It has just started its push after being hit pretty hard on the way down. There is good head room imo now on the upside and all indicators were put down pretty hard. Just like you the bulls battled and the bears pushed harder, the attack seems to be over and the dust is starting to settle so this is when I like to take my position.

The one thing I would add to really force on people is that you need to learn to #1 take profits BEFORE anyone else does, if you wait for the rally to slow then you will be fighting to sell on the way down just like everyone else does. #2 learn to sell if your stock is not going the way you expect it to. So many people hope and pray that it will bounce back up without reading the chart knowing it will go down much further until it hits the next level of support. You must protect your principle or sooner or later the game will beat you down to nothing.

Study a stock, stocks have patterns just like people. Some indicators on a specific stock will 90% go from point A to point B then back to point A and back up to B. Learn THAT particular stocks moves, play the moves and dont force the hand to something that its not ready for.

Trade well and trade smart.

Crazed98 · Sun, 05-28-2006, 02:11 PM

Very good posts. Going with your philosophy what a lot of people "bulls" do is once the bear is under attack all run over to try and get a piece. But most get left with the scraps if anything at all. Then they are the ones being attacked by the bears, being that bulls are left hungry and tired.

mightybridge · Sun, 05-28-2006, 08:58 PM

That is a most astute observation, crazed. That is why I often state that I buy boredom and sell excitement. Most of the time when other traders are finally beginning to get excited about a stock I have bought I'm taking profits, or just about to do so. The key is to buy em when noone wants em and sell em when everybody simply must have em. You must be cautiously contrarian as a predatory trader. By recognizing value before others do, you will be able to take profits at a given ROI (return) long before that same ROI can be realized by other traders who come late to the party and who are ultimately your competitors.

mightybridge · Sat, 06-03-2006, 01:41 PM

It's the hardest thing in the world to do but if you want to protect your capital and make it grow, you MUST take profits -- consistently. Don't ever believe the hype that the longs in the stock will spew. Assume that there is no news and that there is nothing but the chart. Obey it all times, without exception. If you ever have any doubt about whether the strength of a move up is fading, immediately lock in profits and ask questions later. There is no worse feeling in trading than watching a tidy profit slide into a loss, and morph into a large loss. I did that far too often as a novice newbie. Don't do that! EVER!

Hit and move. Sting like a bee. Take small profits and watch your account grow exponentially. Remember that if you do not take your profits, some other trader, one like me, will take them from you. If you find yourself in a stock with me you can always be sure that I will be taking profits without hesitation.

eSology · Sat, 06-03-2006, 01:57 PM

Quote:

Originally Posted by mightybridge

There is no worse feeling in trading than watching a tidy profit slide into a loss, and morph into a large loss. I did that far too often as a novice newbie. Don't do that! EVER!

Very wise advice. Wish this would have been my motto last year. Still holding one now that has far exceeded the duration I wanted to hold.

mp6140 · Sat, 06-03-2006, 02:16 PM

just sent off to a relative newb, and wordy as is my want, but seems to fit the subject, and i didnt feel like writing a new one --- so wade thru what you dont like and see if theres anything you do !

[quote=away]Hey MP

In chat I hear people saying they saw a buy or a sell go thru, I even here that a trade has been registered by the MM's as a buy or sell.. and I'm always hearing XX complaining about bid whacking..

how do they know this, is there some type of indicator that actually tells You what a trade is..

I've got microcap for L2's and I Assume that a trade at the ask is a buy, and a sale if at the bid, and if in between then someone got a slightly better deal.

but other than that I see no definite signal that they are either..

just wondering if I'm missing something..

In the "words" of the street, those signals are simply some form of visual indication that buying pressure has increased. Depending on what software trading platform, they can be as simple as the pps passing over an "alert" point, although one of the best is the pps crossing to the upside over its intraday 20 day moving average on a 10 minute chart.

more advanced software, such as quotetracker, can use alerts that are set at resistance points on the intraday charts or a slew of other "signals" that happen to work for you, including advanced "paintbar indicators" that show when a particular action has occurred or one can use the pressure bars, which show you buying or selling pressure (which you correctly (for the most part) identified as buying at the bid or ask ! (buying between the bid and ask "usually" indicates indecision at that moment as to which way the stock will go, and can be set in quotetracker as a yellow bar, as opposed to a green or red one.

a "buy" signal can be a reversal point where the mms change from a "sell" attitude (they are either shorting, shaking for more shares or selling off for profit) to where they are suddenly buying again (suddenly a lot of bids, buying at the ask !)

a SIGNAL is anything that shows you the mood has changed, be it to the upside or downside !

there are trading platforms that actually flash red and green lights to signify buy or sell situations, but just remember that a "signal" is ANYTHING that tells you a new trend has been created --- the intraday RSIWLR and "mikeys method" are both set up to do this for you, although you still have to be looking for it. Im presently working with the medveds (quotetracker) to set up an external alert signal based on the pps crossing a line, which for me is a moving average, as that would take the program more into the realm of programmed trading, which is with us and will be the future of most trading soon.

presently choice trade and interactive brokers are playing with "programmed trading" methods, and while both are expensive (relatively) are showing some promise ---- in addition to using the 20 ma, i use a "trigger" on quotetracker that most programmed trading systems depend on --- sort of an electronic pivot point ! (oh yeah, dont forget the pivot point --- a very well established positive or negative alert point depending on whether the stock is moving up or down through it )
======================================

I also hear You talking about different indicators that I haven't even heard of, is there software or feeds that enable these observations, I gonna try to make this my major source of income, so if I have to invest some money for the best information to me this would be a business expense..

although one certainly doesnt have to go to the "techie geek" extremes i sometimes approach, it fits me well --- I use "mikeys method" of course (now highly modified essentially for flipping---who do you think brought flipping and scalping to the room -- LOL ?) and i use real-time prophet.net 3 month (or longer) and intraday charts. Presently im looking for ways to combine the two, and have done so for the "historical" charts on quotetracker, running a slightly modified version of the RSIWLR that does not require a realtime charge from prophet. This weekend, if all goes well, i am trying to set up intraday charts as a modified RSIWRL also.

the beauty of the prophet charts lay in the fact that you could superimpose a number of indicators over each other, creating a highly visual signal --- if everything was at the top of the indicator panel, it was overbought, and vice-versa for the bottom ! At this time, quotetracker can do the same, but Prophet realtime has access to more, and in my estimation, often better indicators (BUT, that’s me !!!!!)

the winner in the RSIWRL was the RSI (2) which shows tops and bottoms of moves and when combined with the LRC (Linear regression channel which shows support and resistance) is a pretty danged sure fire method of seeing where a stock has been and where its heading and where it will top or bottom at , once you have experience with it !
===============================

and while XX may dislike what he refers to as "bid whacking". when a stock is approaching its top line resistance (usually shown by a bunch of mms on the ask) YOU WILL NOT GET OUT OF YOUR POSITION IF YOU TRY TO SELL AT THE ASK, as you will simply be last in line but must sell BELOW the ask, forcing the mms to go THROUGH YOU and take your stock to reach the next higher level they want to get to.

always remember that its the mms game, and we traders HAVE to take the leavings (unless a stock is running VERY strongly, then you can sell at the ask, but once again, not at the top) so we get the worst, not the best. If you want to buy, you buy at the ask, and if you want to sell, you sell at the bid (“normally”, but with experience, that doesn’t always hold true) --- its the way the game works and xx simply wants the ask to stay strong, so mistakenly thinks that selling at the bid will weaken the stocks move. It wont, because the mms ALREADY KNOW resistance, and where they are going to stop moving the stock and your buying or selling will not affect what is about to happen one bit !!!!
=====================================

and Yes, thanks to You, I am running Qoutetracker with IQ feeds ..

a good combination, what else can i say ! I hope youre using the registered version !!! You might try comparing IQ with your own brokers feeds --- may do the same and be cheaper.

Long overdue, but the new version of mikeys should be out soon !

One last thing --- the fast paced momentum penny plays we do, while probably on the top of the list for excitement, are not the only ways of trading for profit there is, especially if one really wants to do this professionally, and since i do it professionally i probably have some experience in the matter ! If you find its not working for you, there are MANY other methods of working, and where YOU fit will come with experience !

My preferred trading method is to find stocks over the weekend that i believe should be moving or reversing or going down. I put them into a QT watchlist and wait for them to do something, at which time i (having already looked them over with tech analysis) will buy a core position to hold for a 3 day swing, AND trade the stock intraday between its lows and highs (or short it if that is the case). On ocassion, i will grab a stock mentioned inthe chat room if nothing i have is moving at the moment and play that, but for the most part i have preset my whole week with "picked" stocks from the weekend scans, simply because I cannot keep up with 50 or so stocks on a watchlist, so cut that down to 10 or so, that i watch throughout the week !

for professionals, although slower, there is nothing like sector rotation, which is simply finding the "moving" sectors at that moment, choosing stocks in your price range and letting them ride till they reverse (stop losses will automatically take care of you) and then shorting them back down to support. When the sector youre in gets tired, find the next sector thats moving and do the same thing. Using just that method and sticking to the gold and petro sectors for the past two years, my childrens trust fund increased 74X over two years without a flip, scalp or intraday trade in the bunch !

Stockfetcher will show you stocks moving in channels, be they up or down (the channel is our old friend the LRC) and i simply flip thru them every weekend, identifying those at the top (for shorting) or those at the bottom (for reversals to the upside). entering those in my price range and that look ready, i wait while mikeys method identifies when they start to move, and the rest is history !

The "Market" is a big old place, and there is a place for everyone and i firmly believe, with experience and practice, ANYONE can make a very nice living. Some traders go on to greatness, but so do baseball players and horse shoe throwers --- the rest just enjoy their positions !

But, as in most other things, EXPERIENCE is the key to success and experience takes time and there are no real shortcuts –– simply hang in, pick your trades carefully and exit with profit and before the downturn (stocks tend to run 3 days, period ! DO NOT buy on the third day (if a stock is to continue up, you will only have missed some profit, but you will have also missed the probability of a downslide, and mostly they go down on day 3) Once you can confirm a continuation, THEN you can re-enter the stock !

For me, the whole secret behind good trading is not great strategies or tremendous insights –– its simply having the money to take advantage of situations that appear in front of you. The worst problem for most new traders is insufficient trading capital, which causes thm to hold too long, praying for more profit –– those with capital simply enter and exit carefully, leaving a bit on the table, but always increasing their trading capital constantly and consistently ! Note that on a particularly good day for a stock there is a LOT of volume and always remember that this volume consisted of buyers and SELLERS –– selling before the top and not holding for the next day. They got their profit and they left, knowing at the end of the day how much they had made and not trusting to another day ! Holding for the very top, and trying to enter at the very bottom is simply a form of greed to my way of thinking, as I believe slow and steady always wins the race and will enable one to be around for a long time to come !

Anxiety and the “need to trade” are what separates the men from the boys –– 16000 stocks, give or take, out there –– whatever you miss today will be coming down the track tomorrow, so PICK your trades to put the odds on your side, and away from the “house” –– go with stocks in an uptrend (if you screw up on an exit, the stock continues to move up)

Good traders do not just make profit, they limit their losses immediately and at all costs, since your money is all you have in this game and is not to be wasted ! If you were selling widgets, you would be out of business if you had no more widgets to sell and could not find a new source for widgets –– ALWAYS REMEMBER THIS !!!!!
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mightybridge · Sat, 06-10-2006, 04:11 PM

I just wanted to share a few thoughts on another demon you must slay if you wish to be a profitable trader. His name is Hesitation. By all means, you must do your homework and conduct your analysis before executing a trade. I like to conduct my TA and assemble my watchlist in the evenings when all is calm and peaceful. During the trading day though, once the opportunities you have been waiting for present themselves, you must never give in to hesitation. Hesitation is a symptom of fear and should have no place in your trading repetoir. Once you have identified an opportunity you must have the emotional discipline to act upon it. Until you eliminate hesitation, your trading will suffer.

Having said that though, you must have the discipline it takes to be flexible. Your initial TA might indicate a price target on your trade of 5 cents, but after you are in the stock other factors must be analyzed. You must constantly re-evaluate your positions and effectively manage your trade throughout. If you are unable to do so, do not trade. Close out the position. You might have expected a stock to reach .05 but something happens with the bid and ask when the stock rises to .03, or level 2 starts to act weird, or the overall market goes flat, etc and you then have to close the position. I have found it best when doubt arises after opening a position that it is better to lock in profits now and ask questions later.

In sum, do not hesitate to enter a trade once you have done your research and identified that trade as a wise and prudent one but maintain the flexibility needed to effectively manage it from open to close. My experience is unique and you should not treat this as advice. I am merely sharing what my many mistakes have taught me. For advice on trading, pick up a book by a licensed broker.

Sun, 05-28-2006, 08:16 AM	#1 (permalink)
mightybridge Super Member Join Date: Apr 2006 Location: Canada Posts: 514	Trading Philosophy I'm sure that all seasoned market traders have read the various books out there on trading philosophy. There is a vast amount of intriguing information for our enjoyment and education, from the Elder-esque psycologically founded views to the application of Tsu's Art of War to the markets. I'd just like to take a moment to share my trading philosophy and to hear what yours is all about, if you will be so kind as to indulge me. I think of my trading style as patiently predatory. Let me explain. If you watch the Discovery Channel or National Geographic type shows a pattern quickly emerges whenever large predators are featured. It does't matter whether it's a show about lions, crocodiles, or killer whales. The most impressive predators hunt only when they have great odds of making a kill. The killerwhale goes for the baby seal in the surf. The lion attacks the young gizzelle. The crocodile eats the unsuspecting and virtually immobile, swimming baby water buffalo. I think of myself as a bullish trader. I do not short stocks. I make my money by going long on a trade. I'm not talking about going long in the traditional sense. What I mean is going long in the sense that you buy at one price and sell later (10 minutes, 1 day, 1 week, 2 weeks max) at a higher price. Since the market is about bulls and bears, locked in a constant struggle for victory, I see myself as a strong and patient predatory bull. I must do battle with the bears but rather than take on an angry, fresh and energized grizzly for a long duel, I prefer to attack a bear that has been fighting for a long time and has grown extremely tired. Like Sun Tsu reccomends to his generals, once the opportune moment presents itself (i.e. once the bear is bleeding and exhausted from his bout with other bulls and is about to collapse) I explode toward him from the brush with great power like a violent bolt of lightning! He has almost no chance of defeating me. Were the playing field even, he could destroy me but because I have waited patiently in my search for a weak and tired bear on whom I can feed (profit from), I will be the victor. This very simple philosophy took me 4 years to discover, develop, and confidently execute. This is why I am the proponent of the bounce play. The strength of the bears can be gauged by taking into consideration factors like, support, resistance, volume, the rsi, the stochastic, the cci, bollinger bands, fib retracements/elliot waves, and moving averages. Whatever tools you use, learn how to put your finger on the pulse of the enemy to assess its status and then have the discipline and confidence to attack with full commitment. As Henry David Thoreau states, if we are to be successful, we must "advance confidently." I have garnered confidence through seeing my philosophy work for me time and time again. After you do that, you will then need to master the incredibly difficult task of seizing the spoils of the battle of which you are the victor (you must learn to take your profits) before the hyenas (other traders) take them from you. But that is a discussion for another day. __________________ I am not qualified to give advice. NEVER make ANY decision because of my posts. If you trade based on my excited ramblings you are a complete moron!

Sun, 05-28-2006, 08:35 AM	#3 (permalink)
mightybridge Super Member Join Date: Apr 2006 Location: Canada Posts: 514	esology You are a military man. I'm sure you can appreciate the fact that it is ideal to attack your enemy when he is most vulnerable. All traders are doing battle with other traders all the time because it really is true that in order to make money in the market, someone else must lose it. The fellow who sold me his IVHG at .021 on Friday did so because he thought it was going lower. No doubt when he saw it closed at .024 he was perplexed. I bought at 021 because I thought it was going up soon. This is THE GAME. With the bounce technique I see the pullback of the stock's value, on lower and lower volume, as a weakening bear. I attack when the other traders (the bear, if you will) are exhausted from the pullback, and then ride the rebound. If you can imagine thirty arch enemy armies (other traders playing a stock) converging onto the plains of a battle field right now in a quest for domination, and you had your troops (trading dollars) hidden and undetectable behind a hill, would you send them into the bloody massacre today or would you wait for your enemies to kill each other off for five days until only one tired, beaten down, wounded army remained? Of course you would wait and then destroy it 5 days from the day the first fighting began with your fresh and confident troops. That is the essence of the bounce play. Using basic mathematics (odds) to your advantage and attacking/buying when a stock is ready to rebound, thereby surprising the exhausted bears who had prematurely claimed victory, is all I do. It's that simple. __________________ I am not qualified to give advice. NEVER make ANY decision because of my posts. If you trade based on my excited ramblings you are a complete moron! Last edited by mightybridge : Sun, 05-28-2006 at 08:51 AM.

Sun, 05-28-2006, 08:58 PM	#6 (permalink)
mightybridge Super Member Join Date: Apr 2006 Location: Canada Posts: 514	Astute That is a most astute observation, crazed. That is why I often state that I buy boredom and sell excitement. Most of the time when other traders are finally beginning to get excited about a stock I have bought I'm taking profits, or just about to do so. The key is to buy em when noone wants em and sell em when everybody simply must have em. You must be cautiously contrarian as a predatory trader. By recognizing value before others do, you will be able to take profits at a given ROI (return) long before that same ROI can be realized by other traders who come late to the party and who are ultimately your competitors. __________________ I am not qualified to give advice. NEVER make ANY decision because of my posts. If you trade based on my excited ramblings you are a complete moron!

Sat, 06-03-2006, 01:41 PM	#7 (permalink)
mightybridge Super Member Join Date: Apr 2006 Location: Canada Posts: 514	Random thoughts on profit taking It's the hardest thing in the world to do but if you want to protect your capital and make it grow, you MUST take profits -- consistently. Don't ever believe the hype that the longs in the stock will spew. Assume that there is no news and that there is nothing but the chart. Obey it all times, without exception. If you ever have any doubt about whether the strength of a move up is fading, immediately lock in profits and ask questions later. There is no worse feeling in trading than watching a tidy profit slide into a loss, and morph into a large loss. I did that far too often as a novice newbie. Don't do that! EVER! Hit and move. Sting like a bee. Take small profits and watch your account grow exponentially. Remember that if you do not take your profits, some other trader, one like me, will take them from you. If you find yourself in a stock with me you can always be sure that I will be taking profits without hesitation. __________________ I am not qualified to give advice. NEVER make ANY decision because of my posts. If you trade based on my excited ramblings you are a complete moron!

Sat, 06-03-2006, 02:16 PM	#9 (permalink)
mp6140 CRUSTY ON THE OUTSIDE ! Join Date: Mar 2005 Posts: 839	MP -- TRADING PSYCHOLOGY and a couple other things also ! just sent off to a relative newb, and wordy as is my want, but seems to fit the subject, and i didnt feel like writing a new one --- so wade thru what you dont like and see if theres anything you do ! [quote=away]Hey MP In chat I hear people saying they saw a buy or a sell go thru, I even here that a trade has been registered by the MM's as a buy or sell.. and I'm always hearing XX complaining about bid whacking.. how do they know this, is there some type of indicator that actually tells You what a trade is.. I've got microcap for L2's and I Assume that a trade at the ask is a buy, and a sale if at the bid, and if in between then someone got a slightly better deal. but other than that I see no definite signal that they are either.. just wondering if I'm missing something.. In the "words" of the street, those signals are simply some form of visual indication that buying pressure has increased. Depending on what software trading platform, they can be as simple as the pps passing over an "alert" point, although one of the best is the pps crossing to the upside over its intraday 20 day moving average on a 10 minute chart. more advanced software, such as quotetracker, can use alerts that are set at resistance points on the intraday charts or a slew of other "signals" that happen to work for you, including advanced "paintbar indicators" that show when a particular action has occurred or one can use the pressure bars, which show you buying or selling pressure (which you correctly (for the most part) identified as buying at the bid or ask ! (buying between the bid and ask "usually" indicates indecision at that moment as to which way the stock will go, and can be set in quotetracker as a yellow bar, as opposed to a green or red one. a "buy" signal can be a reversal point where the mms change from a "sell" attitude (they are either shorting, shaking for more shares or selling off for profit) to where they are suddenly buying again (suddenly a lot of bids, buying at the ask !) a SIGNAL is anything that shows you the mood has changed, be it to the upside or downside ! there are trading platforms that actually flash red and green lights to signify buy or sell situations, but just remember that a "signal" is ANYTHING that tells you a new trend has been created --- the intraday RSIWLR and "mikeys method" are both set up to do this for you, although you still have to be looking for it. Im presently working with the medveds (quotetracker) to set up an external alert signal based on the pps crossing a line, which for me is a moving average, as that would take the program more into the realm of programmed trading, which is with us and will be the future of most trading soon. presently choice trade and interactive brokers are playing with "programmed trading" methods, and while both are expensive (relatively) are showing some promise ---- in addition to using the 20 ma, i use a "trigger" on quotetracker that most programmed trading systems depend on --- sort of an electronic pivot point ! (oh yeah, dont forget the pivot point --- a very well established positive or negative alert point depending on whether the stock is moving up or down through it ) ====================================== I also hear You talking about different indicators that I haven't even heard of, is there software or feeds that enable these observations, I gonna try to make this my major source of income, so if I have to invest some money for the best information to me this would be a business expense.. although one certainly doesnt have to go to the "techie geek" extremes i sometimes approach, it fits me well --- I use "mikeys method" of course (now highly modified essentially for flipping---who do you think brought flipping and scalping to the room -- LOL ?) and i use real-time prophet.net 3 month (or longer) and intraday charts. Presently im looking for ways to combine the two, and have done so for the "historical" charts on quotetracker, running a slightly modified version of the RSIWLR that does not require a realtime charge from prophet. This weekend, if all goes well, i am trying to set up intraday charts as a modified RSIWRL also. the beauty of the prophet charts lay in the fact that you could superimpose a number of indicators over each other, creating a highly visual signal --- if everything was at the top of the indicator panel, it was overbought, and vice-versa for the bottom ! At this time, quotetracker can do the same, but Prophet realtime has access to more, and in my estimation, often better indicators (BUT, that’s me !!!!!) the winner in the RSIWRL was the RSI (2) which shows tops and bottoms of moves and when combined with the LRC (Linear regression channel which shows support and resistance) is a pretty danged sure fire method of seeing where a stock has been and where its heading and where it will top or bottom at , once you have experience with it ! =============================== and while XX may dislike what he refers to as "bid whacking". when a stock is approaching its top line resistance (usually shown by a bunch of mms on the ask) YOU WILL NOT GET OUT OF YOUR POSITION IF YOU TRY TO SELL AT THE ASK, as you will simply be last in line but must sell BELOW the ask, forcing the mms to go THROUGH YOU and take your stock to reach the next higher level they want to get to. always remember that its the mms game, and we traders HAVE to take the leavings (unless a stock is running VERY strongly, then you can sell at the ask, but once again, not at the top) so we get the worst, not the best. If you want to buy, you buy at the ask, and if you want to sell, you sell at the bid (“normally”, but with experience, that doesn’t always hold true) --- its the way the game works and xx simply wants the ask to stay strong, so mistakenly thinks that selling at the bid will weaken the stocks move. It wont, because the mms ALREADY KNOW resistance, and where they are going to stop moving the stock and your buying or selling will not affect what is about to happen one bit !!!! ===================================== and Yes, thanks to You, I am running Qoutetracker with IQ feeds .. a good combination, what else can i say ! I hope youre using the registered version !!! You might try comparing IQ with your own brokers feeds --- may do the same and be cheaper. Long overdue, but the new version of mikeys should be out soon ! One last thing --- the fast paced momentum penny plays we do, while probably on the top of the list for excitement, are not the only ways of trading for profit there is, especially if one really wants to do this professionally, and since i do it professionally i probably have some experience in the matter ! If you find its not working for you, there are MANY other methods of working, and where YOU fit will come with experience ! My preferred trading method is to find stocks over the weekend that i believe should be moving or reversing or going down. I put them into a QT watchlist and wait for them to do something, at which time i (having already looked them over with tech analysis) will buy a core position to hold for a 3 day swing, AND trade the stock intraday between its lows and highs (or short it if that is the case). On ocassion, i will grab a stock mentioned inthe chat room if nothing i have is moving at the moment and play that, but for the most part i have preset my whole week with "picked" stocks from the weekend scans, simply because I cannot keep up with 50 or so stocks on a watchlist, so cut that down to 10 or so, that i watch throughout the week ! for professionals, although slower, there is nothing like sector rotation, which is simply finding the "moving" sectors at that moment, choosing stocks in your price range and letting them ride till they reverse (stop losses will automatically take care of you) and then shorting them back down to support. When the sector youre in gets tired, find the next sector thats moving and do the same thing. Using just that method and sticking to the gold and petro sectors for the past two years, my childrens trust fund increased 74X over two years without a flip, scalp or intraday trade in the bunch ! Stockfetcher will show you stocks moving in channels, be they up or down (the channel is our old friend the LRC) and i simply flip thru them every weekend, identifying those at the top (for shorting) or those at the bottom (for reversals to the upside). entering those in my price range and that look ready, i wait while mikeys method identifies when they start to move, and the rest is history ! The "Market" is a big old place, and there is a place for everyone and i firmly believe, with experience and practice, ANYONE can make a very nice living. Some traders go on to greatness, but so do baseball players and horse shoe throwers --- the rest just enjoy their positions ! But, as in most other things, EXPERIENCE is the key to success and experience takes time and there are no real shortcuts –– simply hang in, pick your trades carefully and exit with profit and before the downturn (stocks tend to run 3 days, period ! DO NOT buy on the third day (if a stock is to continue up, you will only have missed some profit, but you will have also missed the probability of a downslide, and mostly they go down on day 3) Once you can confirm a continuation, THEN you can re-enter the stock ! For me, the whole secret behind good trading is not great strategies or tremendous insights –– its simply having the money to take advantage of situations that appear in front of you. The worst problem for most new traders is insufficient trading capital, which causes thm to hold too long, praying for more profit –– those with capital simply enter and exit carefully, leaving a bit on the table, but always increasing their trading capital constantly and consistently ! Note that on a particularly good day for a stock there is a LOT of volume and always remember that this volume consisted of buyers and SELLERS –– selling before the top and not holding for the next day. They got their profit and they left, knowing at the end of the day how much they had made and not trusting to another day ! Holding for the very top, and trying to enter at the very bottom is simply a form of greed to my way of thinking, as I believe slow and steady always wins the race and will enable one to be around for a long time to come ! Anxiety and the “need to trade” are what separates the men from the boys –– 16000 stocks, give or take, out there –– whatever you miss today will be coming down the track tomorrow, so PICK your trades to put the odds on your side, and away from the “house” –– go with stocks in an uptrend (if you screw up on an exit, the stock continues to move up) Good traders do not just make profit, they limit their losses immediately and at all costs, since your money is all you have in this game and is not to be wasted ! If you were selling widgets, you would be out of business if you had no more widgets to sell and could not find a new source for widgets –– ALWAYS REMEMBER THIS !!!!! ============================= __________________ Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages ! As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence -- BUT I KNOW WHERE THEY HID THE KEY !!

Sun, 05-28-2006, 08:29 AM	#2 (permalink)
eSology Super Member Join Date: Mar 2005 Location: U.S.A Posts: 791	Very nice...the obvious key to your success has been discipline. Keep up the good work.

Sun, 05-28-2006, 10:46 AM	#4 (permalink)
Stock_Analyzer Posts: n/a	I have to say that is a very interesting theory on trading and if I were to explain mine it would be somewhat similar. For the most part I like to bottom feed or find stocks that are just coming off support and have no resistance for a little ways up the road. CBAY was a example and MBAY imo is another great example coming up. It has just started its push after being hit pretty hard on the way down. There is good head room imo now on the upside and all indicators were put down pretty hard. Just like you the bulls battled and the bears pushed harder, the attack seems to be over and the dust is starting to settle so this is when I like to take my position. The one thing I would add to really force on people is that you need to learn to #1 take profits BEFORE anyone else does, if you wait for the rally to slow then you will be fighting to sell on the way down just like everyone else does. #2 learn to sell if your stock is not going the way you expect it to. So many people hope and pray that it will bounce back up without reading the chart knowing it will go down much further until it hits the next level of support. You must protect your principle or sooner or later the game will beat you down to nothing. Study a stock, stocks have patterns just like people. Some indicators on a specific stock will 90% go from point A to point B then back to point A and back up to B. Learn THAT particular stocks moves, play the moves and dont force the hand to something that its not ready for. Trade well and trade smart.

Sun, 05-28-2006, 02:11 PM	#5 (permalink)
Crazed98 Member Join Date: Apr 2006 Posts: 62	Very good posts. Going with your philosophy what a lot of people "bulls" do is once the bear is under attack all run over to try and get a piece. But most get left with the scraps if anything at all. Then they are the ones being attacked by the bears, being that bulls are left hungry and tired.

Sat, 06-10-2006, 04:11 PM	#10 (permalink)
mightybridge Super Member Join Date: Apr 2006 Location: Canada Posts: 514	On Hesitation and Flexibility I just wanted to share a few thoughts on another demon you must slay if you wish to be a profitable trader. His name is Hesitation. By all means, you must do your homework and conduct your analysis before executing a trade. I like to conduct my TA and assemble my watchlist in the evenings when all is calm and peaceful. During the trading day though, once the opportunities you have been waiting for present themselves, you must never give in to hesitation. Hesitation is a symptom of fear and should have no place in your trading repetoir. Once you have identified an opportunity you must have the emotional discipline to act upon it. Until you eliminate hesitation, your trading will suffer. Having said that though, you must have the discipline it takes to be flexible. Your initial TA might indicate a price target on your trade of 5 cents, but after you are in the stock other factors must be analyzed. You must constantly re-evaluate your positions and effectively manage your trade throughout. If you are unable to do so, do not trade. Close out the position. You might have expected a stock to reach .05 but something happens with the bid and ask when the stock rises to .03, or level 2 starts to act weird, or the overall market goes flat, etc and you then have to close the position. I have found it best when doubt arises after opening a position that it is better to lock in profits now and ask questions later. In sum, do not hesitate to enter a trade once you have done your research and identified that trade as a wise and prudent one but maintain the flexibility needed to effectively manage it from open to close. My experience is unique and you should not treat this as advice. I am merely sharing what my many mistakes have taught me. For advice on trading, pick up a book by a licensed broker. __________________ I am not qualified to give advice. NEVER make ANY decision because of my posts. If you trade based on my excited ramblings you are a complete moron! Last edited by mightybridge : Sat, 06-10-2006 at 04:38 PM.

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