Security 101

tickerfinder · Aug 15th, 2009, 21:17

I made this post to share what I learn from other experts and market. You may agree or not my points since every trader has different style and tolerance.

Basiclly my stlyle is using low risk strategies. I believe these will benefit for all traders, especially for new traders.

I would like discuss any points of trading and I am learing too.

tickerfinder · Aug 15th, 2009, 21:30

I was really scared when I placed my first trade.

At that time, I did not know too much infomation about the market. The only thing I believe it is a good company and down 20% already. After a big down day, I thought it was a good deal and bought 300 shares. 1 months after, it down 10% more. I did not know how to do it expect pray. I was lucky-3 months after, I exit the trade and made 20% profit.

After my first trade, I began to study the market and trading. I knew it was TSX 60 listed stocks and it was a down market that time.

Lesson to learn: Do not buy a stock since it looks cheaper - It may go to zero. Do not against the trend.

tickerfinder · Aug 15th, 2009, 21:50

As a new trader, since I mader profit by first trade, I started to searched all kinds information about trading.

I visited lots chinese stocks forum, there are lots funny stories and so called master.
I paid 500 us dollars to be a member of a US chinese run company to get their weekly post and I was cut half by a single trade while I put 10k capital. I did not know to check the earing realease.
I downloaded tons of stocks books to learn indicator,candlestick,pattern,etc.

Finally, I found I lost. I do know what I can trust and I am not confident to place my next trade.

Lesson to learn: As a new trader, do not jump the gun right way. You really need to do PAPER TRADE, PAPER TRADE until you feel comfortable. There was allways opportunities in the market.

tickerfinder · Aug 15th, 2009, 22:35

Somebody may never trade in their life.

But, when you put money to RRSP account, you really should know the market, mutural fund, ETF, stocks, etc. You are responsible for the money, which you work hard to make it. And you are trading.

Think about this: somebody's RRSP accont shrink to half during this global downturn or totally swipe out and they have to work 5 more years. What about they do something to protect their position before it came?

Trade or not, you really should know the market. It is part of life.

tickerfinder · Aug 15th, 2009, 22:47

There are too much infomation about trading, to stay simple, you should understand

1. Janpanese Candlestick Chart:
http://www.zaoxue.com/down/tech-169079.htm

2. Technical analysis:
www.stockcharts.com or
www.bigcharts.com

3. For fundermental analysis, you can visit supersite:
http://finance.yahoo.com/
www.morningstar.com

tickerfinder · Aug 15th, 2009, 23:01

Topic: WHAT KIND OF TRADER ARE YOU?

This should be the first question before you play a trade.

Investor? (own a stock and hlod couple years.) It is not what I am talking about here.

Position trader or long term trader? (hold a stock for couple months.) You may consider this style if you are a full time worker and do not have too much time to watch market closely.

Intermediate Trader? ( hold a stock for couple weeks) If you are same as position trader.

Swing Trader - hold a stock for couple days

Day Trader or Active Trader - entry and exit the trade in same day.

You really need define youself first since different trader use different strategies.

tickerfinder · Aug 15th, 2009, 23:22

I guess nobody talking about ATR (average true range) in this forum. But it is truely import and I will give more details.

Definition: It refelect the volatility of stock
http://stockcharts.com/school/doku.p...e_true_range_a

How to find it?
Visit stockcharts.com, go to INDICATORS, pick AVERAGE TRUE RANGE. for PARAMETERS, set 14 days.

Why it is so important?
It define what stock you should trade.
Befor you make any trade, do a little bit math first-check the ratio of ATR Vs Stock Price.
1. If you are postion or intermediate trader, you are looking for 1-2% ratio. You are looking a slow,steady mover and not let the volatility drive you crazy.
2. If you are swing trader, you are looking for 3-5% ratio. You hlod a stock for couple days and grab a piece (may 5%) and exit the trade.
3. If you are day trader, you like this ratio biger (10-15%) to maximam your profit. For instance, if a stock have a 1 buck ATR and gap up 0.90 already, you do not have too much room to make profit.
4. You may set STOP LOSS by ATR mathod. I will talk this when I make topic: Stop Loss.

That is why if you are trade 2X or 3X ETF, you'd better swing trade.

tickerfinder · Aug 15th, 2009, 23:38

Topic: Canadian or US Market

If you are understand certain market, you'd better to focus on it.

Canadian market is not a big market. For instance, talking about high tech, you are really talking about RIMM and, no more Notel. Canadian market really is driven by commodity,bank sectors. You can find TSX 60 by this link:

http://www.investcom.com/cgi-bin/nam...s&300=&T60=yes
Those are good companies to trade.

US stock market is a broad market and you have whole bunch information for it. You have lots choices.

From this post, I am talking US Market only.

tickerfinder · Aug 15th, 2009, 23:40

Any questions so far?

I think it is good enough for this week.

tickerfinder · Aug 16th, 2009, 09:40

引用:

作者: 老愚

多谢tickerfinder，还是头一次听说这个概念。看看我的理解对不对，
ATR也可叫做股价平均波动值，

如果很低，说明股价在盘整- I do not think so.

如果很高，说明股价在大幅波动，可能是拉升也可能是下跌。再结合日K线图，判断顶部和底部的出现。- I do not know how I can do this. I do not predit the price, I follow the trend.

各个股票之间的ATR因为股价的不同，所以ATR没有可比性。- Corret
A...

Thx for your points.

I use ATR and RATIO of ATR/STOCK PRICE to define what stock I like to trade and what trading style (long term, swing or day trade) I play with.

tickerfinder · Aug 16th, 2009, 09:51

Volume is another big concern for trading.

1. You are looking for >400k daily volume if you are trading long.

2. You are looking for >600K daily volume if you are trading short.

3. You are looking for >1M daily volume if you are trading options.

4. Looking for consistant daily volume. Stay away from one day wander (huge volume and price surge in one day).

5. Heavy daily volume let you easy to jump in and out and give small split between bid and ask price.

tickerfinder · Aug 16th, 2009, 10:06

Money management is most important than trading.

You really treat trade as business, seriously, not gambling.

You can search related info, here is one link:

http://www.simple-stock-trading.com/...anagement.html

tickerfinder · Aug 16th, 2009, 10:13

Always have backup plan.

1. If one computer crash, you can use another one to make your trade.

2. If power off, your UPS worked for you.

3. If Internet down, you have broker's phone line to call in.

4. If internet/home phone not work, you have smart phone (IPHONE?) to help you make trade.

5. If all above failed, you have last defence - STOP LOSS.

tickerfinder · Aug 16th, 2009, 10:24

Every year, in Jan, Apr, July, Oct, company start to release quarterly report. In middle of these month, market will be very volital. Stock may gap up or down huge after earning release.

As a new trader, you should avoid these system risk. Check
http://www.earnings.com/highlight.asp?client=cb
and close your position 2 weeks before earning release day.

For advanced trader, you may check what performance in previous earning and play options strategy.

DO NOT GAMBLE.

tickerfinder · Aug 16th, 2009, 10:36

Topic: How to find stocks?

1. From this forum: check some master (?), what stock they are trading.

2. Go some supersite, like yahoo finance to find most active/big winner/loser.

3. Find which sectors is currently hot and performance:
http://news.morningstar.com/stockRet...?t1=1250432878

Do not trust anybody, do your homework and make decission.

tickerfinder · Aug 16th, 2009, 10:45

Now you know how to find stocks, you know what trade style you like. You have some filter:ATR/VOLUME, etc. You can trade.

But, I beg you do paper trade first if you are fairly new for trade. You should do virtual trade for couple months until you are comfortable for your skill (may 80% winner for your paper trade). Paper trade can really build your confidence.

And you should do paper trade before you apply any new strategies.

There are lots website to help you make paper trade. I strongly recommend you open a account @
http://www.optionsxpress.ca/
There are lots advantage about these brokerage. I will tell you later on.

tickerfinder · Aug 16th, 2009, 10:56

There are 3 types of trend: bullish, bearish, sideway.

You may make money to long a stock in down trend. But, you know how tough you can make your trade work?

You should be a trend rider and do not against trend. Looking for strong trend.

Do not try to buy a stock at very bottom and sell at very top. Nobody can do this. You come to this market and grab piece of it and go.

tickerfinder · Aug 16th, 2009, 11:09

You should set your profit realistic.

For instance, you have 10k capital and wanna make 2k in 1 year. Much better than bank rates, is not it?

You divided 2k by 12 months. 200 per month.
Divided 200 by 4 weeks, 50 per week. You need make 50 bucks per week, is that easy?

I believe MAKE MONEY AND MAKE IT CONSTANTLY.

Quite common, stock goes up couple days and down couple days. If you are swing trader, set your profit goal 5%. If you are day trader, you are master to make 0.5-1% in a day.

Before you entry a trade, you should set your target. How many times you think you can make more and you lose your trade. Once your profit or loss was hit, exit your trade. Do not look back and focus for next trade.

tickerfinder · Aug 16th, 2009, 11:16

Do not over trade.
If you are sick or do not feel comfortable, do not trade.
If you are on vacation, close your position or set stop loss/trailing stop.
Opportunities always are there.

There are so many beautiful things in life, enjoy fishing/hiking/family life,etc.

tickerfinder · Aug 16th, 2009, 11:27

Topic: Fundamental or Technical Analysis

I am not big fan for fundamental analysis. I knew basic knowledge about P/E ratio, balance sheet, etc. Now I do not waste my time to study these shitted information. I may go to morningstar.com to read the company report. Just wanna know what business they are doing.

Think about this: how many times you heard about company release a good earning and stock gap down huge? It does not make any sense. It is really about market reaction. Again, stay away from earning release.

For technical analysis, chart tell you everything.

Aug 15th, 2009, 21:17	#1
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3	Security 101 I made this post to share what I learn from other experts and market. You may agree or not my points since every trader has different style and tolerance. Basiclly my stlyle is using low risk strategies. I believe these will benefit for all traders, especially for new traders. I would like discuss any points of trading and I am learing too.
	No BUY/SELL/HOLD recommendation

Aug 15th, 2009, 21:30	#2
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: First Lesson I was really scared when I placed my first trade. At that time, I did not know too much infomation about the market. The only thing I believe it is a good company and down 20% already. After a big down day, I thought it was a good deal and bought 300 shares. 1 months after, it down 10% more. I did not know how to do it expect pray. I was lucky-3 months after, I exit the trade and made 20% profit. After my first trade, I began to study the market and trading. I knew it was TSX 60 listed stocks and it was a down market that time. Lesson to learn: Do not buy a stock since it looks cheaper - It may go to zero. Do not against the trend.

Aug 15th, 2009, 21:50	#3
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: New Trader As a new trader, since I mader profit by first trade, I started to searched all kinds information about trading. I visited lots chinese stocks forum, there are lots funny stories and so called master. I paid 500 us dollars to be a member of a US chinese run company to get their weekly post and I was cut half by a single trade while I put 10k capital. I did not know to check the earing realease. I downloaded tons of stocks books to learn indicator,candlestick,pattern,etc. Finally, I found I lost. I do know what I can trust and I am not confident to place my next trade. Lesson to learn: As a new trader, do not jump the gun right way. You really need to do PAPER TRADE, PAPER TRADE until you feel comfortable. There was allways opportunities in the market.

Aug 15th, 2009, 22:35	#4
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Why Trading? Somebody may never trade in their life. But, when you put money to RRSP account, you really should know the market, mutural fund, ETF, stocks, etc. You are responsible for the money, which you work hard to make it. And you are trading. Think about this: somebody's RRSP accont shrink to half during this global downturn or totally swipe out and they have to work 5 more years. What about they do something to protect their position before it came? Trade or not, you really should know the market. It is part of life.

Aug 15th, 2009, 22:47	#5
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: what to know? There are too much infomation about trading, to stay simple, you should understand 1. Janpanese Candlestick Chart: http://www.zaoxue.com/down/tech-169079.htm 2. Technical analysis: www.stockcharts.com or www.bigcharts.com 3. For fundermental analysis, you can visit supersite: http://finance.yahoo.com/ www.morningstar.com

Aug 15th, 2009, 23:01	#6
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: WHAT KIND OF TRADER ARE YOU? This should be the first question before you play a trade. Investor? (own a stock and hlod couple years.) It is not what I am talking about here. Position trader or long term trader? (hold a stock for couple months.) You may consider this style if you are a full time worker and do not have too much time to watch market closely. Intermediate Trader? ( hold a stock for couple weeks) If you are same as position trader. Swing Trader - hold a stock for couple days Day Trader or Active Trader - entry and exit the trade in same day. You really need define youself first since different trader use different strategies.

Aug 15th, 2009, 23:22	#7
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: ATR I guess nobody talking about ATR (average true range) in this forum. But it is truely import and I will give more details. Definition: It refelect the volatility of stock http://stockcharts.com/school/doku.p...e_true_range_a How to find it? Visit stockcharts.com, go to INDICATORS, pick AVERAGE TRUE RANGE. for PARAMETERS, set 14 days. Why it is so important? It define what stock you should trade. Befor you make any trade, do a little bit math first-check the ratio of ATR Vs Stock Price. 1. If you are postion or intermediate trader, you are looking for 1-2% ratio. You are looking a slow,steady mover and not let the volatility drive you crazy. 2. If you are swing trader, you are looking for 3-5% ratio. You hlod a stock for couple days and grab a piece (may 5%) and exit the trade. 3. If you are day trader, you like this ratio biger (10-15%) to maximam your profit. For instance, if a stock have a 1 buck ATR and gap up 0.90 already, you do not have too much room to make profit. 4. You may set STOP LOSS by ATR mathod. I will talk this when I make topic: Stop Loss. That is why if you are trade 2X or 3X ETF, you'd better swing trade.

Aug 15th, 2009, 23:38	#8
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Canadian or US Market If you are understand certain market, you'd better to focus on it. Canadian market is not a big market. For instance, talking about high tech, you are really talking about RIMM and, no more Notel. Canadian market really is driven by commodity,bank sectors. You can find TSX 60 by this link: http://www.investcom.com/cgi-bin/nam...s&300=&T60=yes Those are good companies to trade. US stock market is a broad market and you have whole bunch information for it. You have lots choices. From this post, I am talking US Market only.

Aug 15th, 2009, 23:40	#9
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Any questions so far? I think it is good enough for this week.

Aug 16th, 2009, 09:51	#11
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Volume Volume is another big concern for trading. 1. You are looking for >400k daily volume if you are trading long. 2. You are looking for >600K daily volume if you are trading short. 3. You are looking for >1M daily volume if you are trading options. 4. Looking for consistant daily volume. Stay away from one day wander (huge volume and price surge in one day). 5. Heavy daily volume let you easy to jump in and out and give small split between bid and ask price.

Aug 16th, 2009, 10:06	#12
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Money Management Money management is most important than trading. You really treat trade as business, seriously, not gambling. You can search related info, here is one link: http://www.simple-stock-trading.com/...anagement.html

Aug 16th, 2009, 10:13	#13
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Plan B Always have backup plan. 1. If one computer crash, you can use another one to make your trade. 2. If power off, your UPS worked for you. 3. If Internet down, you have broker's phone line to call in. 4. If internet/home phone not work, you have smart phone (IPHONE?) to help you make trade. 5. If all above failed, you have last defence - STOP LOSS.

Aug 16th, 2009, 10:24	#14
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Power Week Every year, in Jan, Apr, July, Oct, company start to release quarterly report. In middle of these month, market will be very volital. Stock may gap up or down huge after earning release. As a new trader, you should avoid these system risk. Check http://www.earnings.com/highlight.asp?client=cb and close your position 2 weeks before earning release day. For advanced trader, you may check what performance in previous earning and play options strategy. DO NOT GAMBLE.

Aug 16th, 2009, 10:36	#15
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: How to find stocks? 1. From this forum: check some master (?), what stock they are trading. 2. Go some supersite, like yahoo finance to find most active/big winner/loser. 3. Find which sectors is currently hot and performance: http://news.morningstar.com/stockRet...?t1=1250432878 Do not trust anybody, do your homework and make decission.

Aug 16th, 2009, 10:45	#16
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Paper Trade Now you know how to find stocks, you know what trade style you like. You have some filter:ATR/VOLUME, etc. You can trade. But, I beg you do paper trade first if you are fairly new for trade. You should do virtual trade for couple months until you are comfortable for your skill (may 80% winner for your paper trade). Paper trade can really build your confidence. And you should do paper trade before you apply any new strategies. There are lots website to help you make paper trade. I strongly recommend you open a account @ http://www.optionsxpress.ca/ There are lots advantage about these brokerage. I will tell you later on.

Aug 16th, 2009, 10:56	#17
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Trend is your friend There are 3 types of trend: bullish, bearish, sideway. You may make money to long a stock in down trend. But, you know how tough you can make your trade work? You should be a trend rider and do not against trend. Looking for strong trend. Do not try to buy a stock at very bottom and sell at very top. Nobody can do this. You come to this market and grab piece of it and go.

Aug 16th, 2009, 11:09	#18
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Realistic Goal You should set your profit realistic. For instance, you have 10k capital and wanna make 2k in 1 year. Much better than bank rates, is not it? You divided 2k by 12 months. 200 per month. Divided 200 by 4 weeks, 50 per week. You need make 50 bucks per week, is that easy? I believe MAKE MONEY AND MAKE IT CONSTANTLY. Quite common, stock goes up couple days and down couple days. If you are swing trader, set your profit goal 5%. If you are day trader, you are master to make 0.5-1% in a day. Before you entry a trade, you should set your target. How many times you think you can make more and you lose your trade. Once your profit or loss was hit, exit your trade. Do not look back and focus for next trade.

Aug 16th, 2009, 11:16	#19
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Over trade Do not over trade. If you are sick or do not feel comfortable, do not trade. If you are on vacation, close your position or set stop loss/trailing stop. Opportunities always are there. There are so many beautiful things in life, enjoy fishing/hiking/family life,etc.

Aug 16th, 2009, 11:27	#20
tickerfinder Senior Member 注册日期: Jul 2009 帖子: 1,730 积分:14 精华:3 声望: 1692809	Topic: Fundamental or Technical Analysis I am not big fan for fundamental analysis. I knew basic knowledge about P/E ratio, balance sheet, etc. Now I do not waste my time to study these shitted information. I may go to morningstar.com to read the company report. Just wanna know what business they are doing. Think about this: how many times you heard about company release a good earning and stock gap down huge? It does not make any sense. It is really about market reaction. Again, stay away from earning release. For technical analysis, chart tell you everything.