Am I on the Right Track?

[FreidAsylum 10]

Hi all, I've recently started researching an entry in to the stock market and I have a few Q's. Of all the stuff I've read, I've found William O'Neill's "How to make money in stocks" the most helpful. Are there any others you would highly recommend a rookie like myself to read?

 

I've started to use a stock simulator and plan to for a good while yet. Leaving the market as a whole aside for the moment, I'm choosing stocks based on EPS growth of around 20% or higher from the same quarter last year, steady growth over the last five years, good institutional sponsorship, management ownership - where I can find it, how the group is doing as a whole and if the stock in question is one of the leaders.

 

I made some terrible choices at the start but I'm finding I'm getting better as time goes on - like with most things, I guess. I'm hoping you can tell me if you think this a good beginning to build on as I learn more about investing? Is there any advice you can give me that may give me a little boost during these early days?

 

Any advice would be greatly appreciated. Thanks.

[MightyMouse 12]

Hi all, I've recently started researching an entry in to the stock market and I have a few Q's. Of all the stuff I've read, I've found William O'Neill's "How to make money in stocks" the most helpful. Are there any others you would highly recommend a rookie like myself to read?

 

I've started to use a stock simulator and plan to for a good while yet. Leaving the market as a whole aside for the moment, I'm choosing stocks based on EPS growth of around 20% or higher from the same quarter last year, steady growth over the last five years, good institutional sponsorship, management ownership - where I can find it, how the group is doing as a whole and if the stock in question is one of the leaders.

 

I made some terrible choices at the start but I'm finding I'm getting better as time goes on - like with most things, I guess. I'm hoping you can tell me if you think this a good beginning to build on as I learn more about investing? Is there any advice you can give me that may give me a little boost during these early days?

 

Any advice would be greatly appreciated. Thanks.

I really like Vectorvest as a stock selection tool. It puts all the important variables at your fingertips. It provides a decent framework for trading the wychoff method.

[karoshiman 10]

finviz.com

[DbPhoenix 42]

Hi all, I've recently started researching an entry in to the stock market and I have a few Q's. Of all the stuff I've read, I've found William O'Neill's "How to make money in stocks" the most helpful. Are there any others you would highly recommend a rookie like myself to read?

 

I've started to use a stock simulator and plan to for a good while yet. Leaving the market as a whole aside for the moment, I'm choosing stocks based on EPS growth of around 20% or higher from the same quarter last year, steady growth over the last five years, good institutional sponsorship, management ownership - where I can find it, how the group is doing as a whole and if the stock in question is one of the leaders.

 

I made some terrible choices at the start but I'm finding I'm getting better as time goes on - like with most things, I guess. I'm hoping you can tell me if you think this a good beginning to build on as I learn more about investing? Is there any advice you can give me that may give me a little boost during these early days?

 

Any advice would be greatly appreciated. Thanks.

 

For a beginning, you won't be able to do better than O'Neil, at least if you stick with his original book (in later days, he became a lot more interested in selling newspapers and went off track). You may also want to develop a more thorough grounding in fundamental analysis, but (a) it's unlikely that whatever benefit you derive will be worth the amount of work involved and (b) it's too easy when becoming immersed in fundamental to talk yourself into believing that the stock is better than it is (see "The Motley Fool", particularly in 2000).

 

Where O'Neil falls short is the technical end. What he presents you must take on faith, at face value, since he does not explain just why a Cup With Handle is worth trading, nor a High Tight Flag, nor most of the other patterns he endorses. Maybe he doesn't think it's necessary to go into the why. Maybe he doesn't know. In any case, if you want to know the why (e.g., why buying a breakout from a base is preferable to jumping in whenever the mood strikes you), then you'll want to study Wyckoff, which is where all of this started. Fortunately, the only Wyckoff Forum online is here at TL, so you needn't go far to get the information.

[FreidAsylum 10]

Fantastic. Thanks guys, I really appreciate the input.

[raul 10]

Do you want to invest (buy and hold) or trade? The e-mini futures have many advantages over trading stocks. There are studies that show that buying and holding can be beat by a wide margin by trading the up and down price swings (if done correctly).

[saberkings 10]

hello. i'm glad and i'm happy that i am here as it will great help the research that i'm doing now about my thesis. actually, i'm also interested and hoping that through this site i can meet new friends, as well, i can contribute something bigtime as the site grows also.

[Mr_black 10]

TA is crap....focus on the content not on the form or the pattern...all fthis Falgs , Double Tops Bottoms,Triangles, 123's and so on are only randomly created forms they dont give a predictable outcome, but if you know what is inside you will go whit the Smart Money and make some money....

[FreidAsylum 10]

Do you want to invest (buy and hold) or trade? The e-mini futures have many advantages over trading stocks. There are studies that show that buying and holding can be beat by a wide margin by trading the up and down price swings (if done correctly).

 

I'd planned on trading but it's still early days yet. I'm trying different things and trying to figure out what's going to be the best option for me. I'm still very much a big ball of clay

[FreidAsylum 10]

TA is crap....focus on the content not on the form or the pattern...all fthis Falgs , Double Tops Bottoms,Triangles, 123's and so on are only randomly created forms they dont give a predictable outcome, but if you know what is inside you will go whit the Smart Money and make some money....

 

Forgive my ignorance but very little of this makes any sense to me.

 

Could you dumb it down a little? Or point me in the best direction to get a grip on it?

[onesmith 10]

Forgive my ignorance but very little of this makes any sense to me.

 

Could you dumb it down a little? Or point me in the best direction to get a grip on it?

 

TA is Technical Analysis of various aspects of price. It's based on the logic that price contains more info than can be discerned from reading the news or studying numbers other than price. For instance record increases in sales and net profit are sometimes interpreted as a good time to sell because all the good news has already occurred. Price is forward looking in that sense and traders will often counter-intuitively sell immediately upon the release of good news. Of course there are also times traders will buy good news in the hope more good news follows or everyone hasn't already seen the news. TA avoids getting bogged down in this quagmire by adopting the belief that whatever traders decide it's immediately reflected in the current price.

 

Falgs is a typo where Mr_black intended to say Flags. Flags are a pattern that price sometimes forms on a price chart, similar to how the Double Tops and other things he mentions are chart patterns. He insists TA is crap and specifically these chart patterns ....are random and do not contain a reasonable probability of predicting whether to expect up or down price movement.

 

Mr_black is saying winning traders base their decisions to buy or sell on something logical that we should be able to discern but he doesn't give much info about what that is other than implying it's non-random. I'm not discounting the possibility he's using a form of TA that relies on Technical Analysis of price because it's common for people to separate TA into it's various different categories of price analysis and then mistakenly refer to their favorite flavor of TA by the name of the specific category it is in. While simultaneously saying TA is crap. Hopefully Mr_black will see my note and clarify what he means.

[DbPhoenix 42]

Forgive my ignorance but very little of this makes any sense to me.

 

Could you dumb it down a little? Or point me in the best direction to get a grip on it?

 

I don't know what Mr. Black is going for either, but whether or not TA is "crap" depends on how one defines it. If it is defined by the use of indicators (post-1950), then many people will agree that it is crap. If it is defined via patterns (post-1930), then many other people (or the same ones) will agree that it is crap.

 

However, if it is defined as it was originally as the analysis of the imbalances between buying pressure and selling pressure (post-1750), then it is anything but crap since all of this derives from the Law of Supply and Demand, which is unavoidable.

 

The Wyckoff Forum may help you "get a grip on it" if you're interested.