| StockFetcher Forums · General Discussion · WAIT FOR GREEN | << 1 2 3 >>Post Follow-up |
| corsino 259 posts msg #36708 - Ignore corsino |
7/4/2005 1:44:48 PM I'm interested in reading other people's opinions/experiences with the "wait for green" before buying downtrodden stocks. Although much has been written about it, my opinion is that it's a great over-simplification. Surely, I wouldn't "back up the truck " nor "load the boat" just on it. Not just on the fact that the stock price is in the green after half hour or so of trading. I think equally important is what the general market is doing. If the market is dropping at the time, there is a very good chance that the green on the stock will soon turn to red. A swing trader needs all the edges possible. There is a time to trade and a time to wait. |
| da-net 55 posts msg #36710 - Ignore da-net |
7/4/2005 2:21:50 PM In agreement completely. |
| TheRumpledOne 6,411 posts msg #36711 - Ignore TheRumpledOne |
7/4/2005 2:45:02 PM Wait for Green... After SF updates the database at night, this filter will show stocks that had rsi(1) below 1 at the open and how they did today. CLICK ON THE MAGNIFYING GLASS ICON: The results should show the reader the benifit in waiting for green. Column CxC shows that the stocks that didn't go up had been going down for days... that's why you wait for green. Change the 1 day ago line to 2 days ago and that should prove it beyond a shadow of a doubt. MAY ALL YOUR FILLS BE COMPLETE. |
| corsino 259 posts msg #36714 - Ignore corsino |
7/4/2005 3:17:47 PM Well, it's a given that most stocks with an RSI <1 have been going down, and waiting for green is advisable.But neither one of the two criteria is foolproof. Filters tell you what happened in the past, but no filter will tell you what will happen tomorrow. Rsi <1 and "waiting for green" are tools, like a hammer to a carpenter. But while you can use a hammer to nail a board, you can also painfully hit your thumb with it. |
| TheRumpledOne 6,411 posts msg #36716 - Ignore TheRumpledOne |
7/4/2005 10:03:18 PM corsino: Trading is more "art" than "science". You have to realize that sometimes you win, sometimes you lose. But if you have good money management skills, you can make money trading: http://www.optionetics.com/articles/article_full.asp?idNo=8558 MARKET INSIGHT: Money Management By Jody Osborne, Optionetics.com 6/19/2003 7:30 AM EST We can find a lot of information about trading in books and on the Web, but most of it details how to pick stocks and what strategies that are available using options. However, one very important aspect of trading is often overlooked and this is money management. I often get the question, “Why did such and such stock move against us when everything was pointing at a good trade?” Trading is not an exact science; if it were, there would not be a market because everyone would know how to win. In sports, a team can often play a great game and still lose. The same thing can occur in trading. We can have all the odds in our favor, yet the stock will move against us. Despite the fact that many trades will lose money, if we manage our trades appropriately, we can still make nice profits. In fact, we can make money trading even if our winning percentage is below 50 percent. In just a moment, I am going to discuss how this is possible. However, before we go into some money management techniques, we need to realize that we are going to have losing trades. Even the best baseball team doesn’t win every game. In fact, a 60 percent winning percentage is considered great in the sport. This is similar to the options game, where a person who wins 60 percent of their trades should come out well ahead of the game. Too many traders enter a trade without any idea of when they will get out. Not only should we have a profit exit set, but we should also have a loss target set. With some strategies, we might be willing to risk the entire capital used, while others we might have a mental stop loss in place. Regardless of where your targets reside, it is important to have them ahead of entering the trade. This is because emotion will dominate our trading decisions if we don’t have an idea of what to do ahead of time. Now, just to show that we don’t have to be right every trade, let’s take a look at a table showing the profits made using various winning percentages. There is an old saying that states “Let your profits run and cut your losses short.” It is this basis that gives us the following table. Winning % Ave Win Tot Win Ave Loss Tot Loss # of Trades Profit 40% $500 $4,000 $250 $3,000 20 $1,000 50% $500 $5,000 $250 $2,500 20 $2,500 60% $500 $6,000 $250 $2,000 20 $4,000 Table 1: Profits Using Various Winning Percentages Notice that by having a 2-to-1 win to loss ratio, we would have profits even if we only win 40 percent of the time. It is also important that we allocate an equal amount of capital to each trade. Many traders will put large amounts of money into trades they think are the best. However, if this trade doesn’t pan out, it can erase the gains made from other trades. There are various strategies to manage your trading account, but the key is to have a plan. The idea is to “plan your trade and trade your plan.” This means knowing ahead of time where our exits lay and keeping a good record of the trades we have made in the past. Though we can’t win every time, we can learn to manage our money better so that the losses aren’t a problem for the long-term performance of our trading account. Jody Osborne Senior Writer & Options Strategist Optionetics.com ~ Your Options Education Site Visit Jody's Forum |
| roca1018 163 posts msg #36858 - Ignore roca1018 |
7/12/2005 6:44:42 AM Corsino, da_net, I am also in agreement as waiting for green is often more of a gamble than looking for reversals after further downside. Of particular interest to me is the 4ema crossing above the 10ema on a 5 minute chart. Unfortunately, my work schedule does not permit me to monitor regularly. In addition, I am not aware of any free live charting sites. I use the chart tools on Ameritrade but the screen is small (bigcharts) and there isn't any option to enlarge it. Rich |
| corsino 259 posts msg #36881 - Ignore corsino |
7/12/2005 7:47:52 PM I'm not saying that "waiting for green" is all bad , but neither is it all good. A lot depends on what type of trading you do. For instance, a day trader, even when the market is going down, can watch a stock carefully and the instant it goes green buy it with the expectation that momentum will push it up a few more pennies where he can sell it at a profit the instant it shows signs of stalling or reversing again. A swing trader has an entirely different situation and goal. If he buys at exactly the same time as the day trader, and the market as a whole keeps going down (Greenspan is talking ),there's a very good chance that by the end of the day the stock ( which at some point was a penny or two in the green) will be in the red. The point is that if you think a particular stock has possibilities,it may be better to wait until the next day , when the market may be in a better mood, to buy it. |
| TheRumpledOne 6,411 posts msg #36921 - Ignore TheRumpledOne |
7/14/2005 8:59:46 AM When you find a system that allows you to buy a stock, walk away, come back days later and sell for profit everytime, there will be no stock market. |
| corsino 259 posts msg #36925 - Ignore corsino |
7/14/2005 10:55:58 AM Rumpledone All I'm saying is that it doesn't hurt to use a little good judgement once in a while, instead of trading, trading, trading, just for the sake of trading.You are fond of saying that you have to trade to make money, but you also can easily lose money. |
| joseph 15 posts msg #37065 - Ignore joseph |
7/25/2005 8:04:10 PM Listen folks, if a trade is going your way average up one-half of the initial position ex; bought 1,000 shares ,first pull back you buy half 500 shares, next pullback you buy 250 shares it is done in 3 stages using trendlines. Let your profits run, very simple and use trailing stops along the way. Something Ozzie Osborns cousin Jody never talked about from optionetics |
| StockFetcher Forums · General Discussion · WAIT FOR GREEN | << 1 2 3 >>Post Follow-up |
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