Trading Techniques   

Share program for buying and selling

No, nothing to do with football, just trying to get some sense in stock trading.

Not very interesting watching football nowadays, unless you are the betting type. Gone are the days of real skillful football during the era of Franz Backenbaur, Guerd Muller, Johan Cruyff and Eusebio.

 

Haha.... unfortunately I'm not a soccer type of girl !  :)

 

Interesting! interesting! Looks like we have the 3-5-2 formation from sporegal and 4-4-2 formation from lewsh88 in share investments similar to the football formation. Is it coincidental with World Cup or it is human psychic at play ?

 

With all TA, FA and % lay out, i believe sentimental subconscious mind will be at work at the most critical moment in times when your finger will do d work on  your keyboard or your inner voice telling your dealer or remisier to press certain numbers. Your enviroment place at that point in times is equally playing a part in making decision, buy/sell or hold as very sec and minutes tick away for price will change very fast.

 

My opinion -

30% technique - which is purely mechanical and based on rules
50% emotions - controlling greed and fear
20% luck

 

Hi everyone:

Recent discussions at this web-site concerning trading techniques is really very interesting indeed.

The following is my 2cents worth of opinion:

I believe stock trading is 40% science, 40% art and 20% luck,

If it is purely science, then anyone with a powerful computer and programming knowledge would make tons of money and deprive many people of writing books on stock trading techniques.

I am actually amazed how a few of my friends make money consistantly by staring at the TV screen and making phone calls to their remeisers. That's all they do 5days X 8hours the whole year round!

 

how abt

http://www.echartbook.com/ 

 

over at shareowl.com, there's now a discussion on Jardine C&C using both TA and FA...

 

i think to depend on TA alone can be quite dangerous also... a combination of TA and FA may be safer... and keep up on current affairs also...

 

Hi Patricksoon,

Yes, it is quite possible that a good trader can turn 80k into 800k in a matter of 5 years - but it is highly likely that such a person would be trading with highly leveraged products such as futures, forex, CFD's etc, rather than pure share trading.

But for every person who has made that kind of money, there are at least 10 times who have gone broke, and yes, I mean "flat broke".

A couple of well reported insights:

 - Of the people who actively trade shares, 80% loose money, 10% break even, and 10% make money

- When a new trader opens up a futures account, on average he/she has lost the entire account in 6 weeks

- A broker for one of Australia's CFD (contracts for difference) providers recently told me that even during the wonderful bull run on the Australian market recently, they have been closing down at least 20 accounts per day because the traders lost all their money..

Sobering information no doubt. But on the upside, a super-trader can make lots and lots of money.

My (humble) view is that the different between going broke and making lots of money in the markets is around 3 things:

1. Methodology

2. Experience

3. Pyschology (many say this is the most important of the 3)

Yes, it does take a long time to be a truly proficient trader (my estimate being 2-5 years), and even once you have learnt some good "rules", based on TA, for buying and selling, this is only 1 piece of the pie. You do need experience (some of which can be gain by lots of backtesting) and you also need the right pschology. And this is a never ending process of continual refinement.

When times are good (eg strong bull runs like we have seen in recent years) some stodgy offerings appear on the internet - these are so called "black box" solutions which promise just to tell you when to buy when to sell, based on a formula, and you just sit back and make money - ABSOLUTE RUBBISH!!

As I have suggested to a few other people through this forum, head out to a book store and start reading through books on technical analysis, then broaden your view and start to look into the psychology of trading. You should also spend lots of time paper-trading before going live in the markets.

A closing thought - speculation without a proven methodology is like committing financial suicide.. and if you are in ever in doubt on a trade, you can never loose money by staying out of the market..

 

You're right... there is no such thing as a "golden rule". If so, everyone who learns it will be rich.

The most effective trading methods, I think, are simple to apply and they are evergreen. Some of the so-called trading systems that you can buy for $$ only work on paper - meaning the computer whiz who developed it tested it on data that is like 10 -20 years ago and found THE "formula to success".

But often when you try it in the present time, the formula will crash and burn. This is because there are too many variables in the formula that made it unreliable and not able to stand the test of time.

But I do believe in back testing. You have to find a technique (be it FA or TA or a mix) that is simple to use and effective over the long term.

 

Some months ago, I read (I think it was in the New Paper) about a guy who played the local stock market and transformed his 80K into 800K in 5 years!!

 

He must be a very happy guy. None of my friends have equalled this kind of extraordinary performance.

 

During one of our ?coffee-shop chat? sessions, the conclusion was that he must be either extremely lucky or perhaps he discovered/developed some kind of program on buying/selling.  By program buying/selling we mean acting on buy/sell indicators in Technical Analysis.

 

I have read from a member in Share Junction that it takes 2-5 years to develop a program (via endless back testing). 

Yet others I spoke to say this kind of  ?golden rules? are only good in theory. Or maybe you need 3 different rules for bull, bear and consolidation phase?

 

Any guru?s want to shed light on this topic?

 

 Thank you and Cheers