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I'm a self employed businessman who started trading in Sept 2011. I did OK my first year, I guess, being ahead $30,000 just by holding Apple. But I made a fatal mistake and kept holding. I didn't have a plan. I've learned a lot about investing these past few weeks, as I watched in shock the past... More
  • In The Green 9 comments
    Mar 4, 2013 2:00 AM | about stocks: AAPL

    I am $1,200 in the green after divesting myself of Apple shares once and for all last week. I own 3 Apple puts, and that position is $300.00 in the green.

    Apple Bulls, of which I was one at this time last week, are still in denial. Another puff piece article about the fantastic possibilities for Apple just appeared today on SA.....this despite another 2.48% drop on the most recent trading day.

    Apple has now dove 39%, and they're all applauding the article, which is giving them false hope.

    Wake up, Bulls! The party is over, for 6 months running now.

    If you're long Apple, get out!

    Don't fight the trend. You will lose every time.

    You can't trade on hope, people.

    You have to have a plan.

    Simple, right? So why doesn't everyone do it?

    I'll keep you posted how I do in this post Apple life I've created for myself. I'm excited!

    I also have a small position in ACI that I shorted last Thursday, I added to it Friday and it's gained 3.45% in 2 days. Time to add to that position.

    And you know how I found ACI? It was a random chart I saw at that looked like it was in a strong downtrend, so I shorted it. Didn't look at the fundamentals at all. Don't even know what the company does. I based it purely on how the chart looked. Gotta ride that trend, Ya Know?

    The rest of my balance is cash until I find a good trade to invest in. I'll take my time and make a good trade. And follow my plan, above all else.


    Stocks: AAPL
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Comments (9)
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  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » Right now I have 4 trades going, all in the green, using my newly formed trading method. I own 9 Apple puts that are around $2,000 up in just a few days. And I own 1,000 shares of RDN, another chart I found at finviz. It's only up 0.39 so far, and I own 10,000 shares, but it jumped more than 5% in each of the last two trading days, so I'll jump on the trend and try to ride it.


    Peace, out.
    4 Mar 2013, 03:29 PM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » Gained another $1,000 today with my Apple puts. My balance has gone from $65,500, when I sold Apple last thursday, to $69,151. That's $3,651 in 3 trading days. Plus I saved another $7,500 to my bottom line by selling at $445.00.


    I now know how to trade. I'm not afraid of the market anymore. I have a set of rules to follow. SA won't publish them, so I'll post them here, in my instablog, so i can always refer to them when in doubt.


    If you don't have a plan, I suggest you read my post, "How to trade Apple"


    Until tomorrow.
    5 Mar 2013, 04:06 AM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » My balance is $66,285.56 to start today.


    I've been getting stopped out alot.


    I should have just let everything ride, because the losses are outnumbering the gains because of my tight stops.


    I'm a little gun shy after witnessing the massive losses the past 6 months, but if I'm confident in the trend, I need to give my stops a lot more leeway to run.


    I'm still learning.


    I'll keep trying though, until I hit a winner.
    6 Mar 2013, 12:51 PM Reply Like
  • shodamo
    , contributor
    Comments (112) | Send Message
    I am a strong believer in technical trading. The naysayers against technical trading think that it ignores the fundamentals about any trading instrument. However, the strong proponents of technical trading believe that the fundamentals that matter are already factored into the price of the instrument.


    Another aspect of technical trading is that it tries to understand the agents (people) in the market and their most likely actions based on their past actions. People generally do the same things over and over. This is why technical setups like head and shoulder formations are rated so highly because investors react in predicatable ways when presented with an instrument stuck in this pattern.


    Another tennet in technical trading is to seek the low point (afterall you want to buy as cheap as possible) for entry. One very good tool for this is the bollinger band. If you want to go long, then try to buy outside of the lower bollinger band (and vice versa).


    You are correct on the exit strategy. If you already got in at a low point then get out when you see all time high prices. Remember you will always have other low points in the future to buy at.


    This formed a lot of my premise for asking close associates to get out of aapl at $700 and wait till $400 to go long. All based on technicals without any regard for fundamentals.


    Note: I am not against fundamentals, but like you found out trading on fundamentals alone can be dangerous, if you violate the additional heuristics I outlined above. Regards.
    6 Mar 2013, 02:24 PM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » Hi Shodamo,


    Great to hear from a technician. When I started trading at the end of 2011, I found some good information on technical trading, but it seemed complicated, and unfortunately, I was so thrilled with my gains in Apple, I tuned it out and just kicked back and watched my balance grow.


    I rode Apple from the $400.00's to $644.00 all the way down to $522.00, and back up to $705.00. I figured this latest correction was just another bump in the road on the way to $1,000.


    I finally caved at $445.00 and sold out. It may just rise again, and when it does, I'll jump back in.


    Bulls have to realize that the party is over, for now at least. Last year in April is when the stock dove 19%. Could we see a repeat of that this year, after a down quarter? Possibly. If so, I'll be ready with my puts.


    Here's a website I like to visit for some technical advice:


    If you can recommend any good books or sites, let me know.


    6 Mar 2013, 03:42 PM Reply Like
  • shodamo
    , contributor
    Comments (112) | Send Message
    6 Mar 2013, 04:05 PM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » Oh, hey


    I am a stockcharts subscriber, but I virtually never go there. Thanks for reminding me and I'll check it out.
    6 Mar 2013, 05:22 PM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » 65,049.xx to start today. I made the mistake of not trusting the trend and getting stopped out because I set my stops too tight.


    If you believe in the trend, let the trade run, and only add to it after a significant gain.


    And wait for the right opportunity. You don't have to trade everyday.


    Find a strong trend, and ride it.
    8 Mar 2013, 02:37 AM Reply Like
  • ManoLive
    , contributor
    Comments (450) | Send Message
    Author’s reply » 1. Map the Trends
    Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
    2. Spot the Trend and Go With It
    Determine the trend and follow it. Market trends come in many sizes – long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.
    3. Find the Low and High of It
    Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old "high" becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies – the old "low" can become the new "high."
    4. Know How Far to Backtrack
    Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.
    5. Draw the Line
    Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
    6. Follow that Average
    Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
    7. Learn the Turns
    Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.
    8. Know the Warning Signs
    Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a "histogram" because vertical bars are used to show the difference between the two lines on the chart.
    9. Trend or Not a Trend
    Use ADX. The Average Directional Movement Index ( line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
    10. Know the Confirming Signs
    Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
    Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
    - John Murphy
    Definitions: Leonardo Fibonacci was a thirteenth century mathematician who "rediscovered" a precise and almost constant relationship between Hindu-Arabic numbers in a sequence (1,1,2,3,5,8,13,21,34,... to infinity). The sum of any two consecutive numbers in this sequence equals the next higher number. After the first four, the ratio of any number in the sequence to its next higher number approaches .618. That ratio was known to the ancient Greek and Egyptian mathematicians as the "Golden Mean" which had critical applications in art, architecture and in nature.
    Stochastics - an oscillator popularized by George Lane in an article on the subject which appeared in 1984. It is based on the observation that as prices increase, closing prices tend to be closer to the upper end of the price range; conversely, in down trends, closing prices tend to be near the lower end of the range. Stochastics has slightly wider overbought and oversold boundaries than the RSI and is therefore a more volatile indicator. The term "stochastic" refers to the location of a current futures price in relation to its range over a set period of time (usually 14 days).


    John Murphy's Ten Laws of Technical Trading
    8 Mar 2013, 02:59 AM Reply Like
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