Trading Techniques   

Lets compare notes!

Hi Singaporegal , I am confuse with this paragraph: (1) I only look for stocks that are less than $1.5 or above $4.0 in price. Because I think TA doesn't really work for stocks <$1.5. For stocks >$4.0, I think its not worth investing in those. The profit margin is not there.

 

Hi Nostradamus, Yeah.. I mean fundamental analysis, not financial analysis. Typed too fast. Hee hee... Anyway, TA is just my own method of investing. I stick to it because it works for me consistently and it suits my investing style. But i know some friends who think TA is full of rubbish and they swear by FA. Hahaha.

 

Hi singaporegal, By FA, I think you mean Fundamental Analysis rather than Financial Analysis.

 

No you're definitely not an idiot. Its actually a very very good question. The simple answer is this - I filter my stocks using these criteria: (1) I only look for stocks that are less than $1.5 or above $4.0 in price. Because I think TA doesn't really work for stocks <$1.5. For stocks >$4.0, I think its not worth investing in those. The profit margin is not there. (2) I also look for stocks who have an average traded volume of 1000,000 per day. By combining (1) & (2), there are only a basket of about 20-30 stocks or so that meet my criteria. In the weekend, I scan about all 20-30 charts to look for opportunities and I identify a few potential ones. For those potentials, I monitor them closely over the weekday. This is how I do this. BTW, a user by the name of pikachu regularly posts a list of Oversold and Overbought stocks on this forum. Very helpful to me! Allows me to narrow my search easily.

 

I am a idot, wonder how do you pick stocks and do the comparision. There are tons of stock in the marker. Do you go through all the listed stock one by one.

 

Thank you Singaporegal for your help . Will go to the research section to learn more about it.

 

I'm a pure TA girl. But other investors rely more on Financial Analysis (FA) instead rather than TA. I think you should choose a method that suits your personality and beliefs.

 

Hi tonersweat.. I think ShareJunction has a write-up about this in the Research section. ok I'll try to explain anyway. -- Accumulation/Distribution -- This graph measures the buying/selling interest of a stock. If the line is trending up, this means that the buying interest is increasing. Opposite for selling. When a divergence occurs (meaning that A/D line trending up but STOCK PRICE is stagnant or trending down), this represents a good buy opportunity. The converse is true for when looking for sell opportunity. -- RSI -- You interpret the RSI the same way as the A/D line. --Williams %R-- This indicator measures oversold/overbought conditions of a stock. If W%R < -70, its taken as oversold. If W%R >-30, its taken as overbought. A perfect BUY opportunity is this - (1) A/D line uptrending (2) RSI uptrending (3) Stock price downtrending (4) W%R was RECENTLY oversold AND is now uptrending towards neutral region ( W%R between -30 to -70) Took me a long time to type this out... hope it helps!

 

Singaporegal , this is a good tips, but I am a idot investor. Can you elaborate more about the distribution/Accumulation, RSI and Williams %R technique.

 

I just follow what my broker tells me! Hahaha.

 

this is a good post!! give me some insight to TA for a noob like me =D

 

Novocaine was asking me about my TA techniques.. so I thought I would share with everyone else and we can compare notes and learn from each other! I mainly use this step by step approach to find stocks to buy- (1) Using Accumulation/Distribution to look for divergences in price and the A/D line. (2) Once I find stocks in (1), I then look for double affirmation using RSI. If RSI is uptrending, its just confirms (1) (3) Once (1) & (2) are established, I will use Williams %R to determine if its too overbought to buy. Ideally, the stock should be oversold. So, once (1), (2) and (3) are all in place, I will buy the stock. That's my technique. So far, my accuracy is about 70-80%. I buy and sell the stock within a period of 2-4 weeks. Profit margin is about 15-20% overall.