Sluggish Market & Ant Theory

[pb]

Grant,
Most of the other members are silently watching you being constantly hassled, heckled and bullied, but that doesn't mean they are supporting it. Whatever you do, don't lose your calm and don't at the heat of the moment use angry words that can then be used against you.

If it's any consolation, some of the people bullying you tried unsuccessfully to hijack the discussion at 'Where is the Dow and others' thread. The good people there just ignored them and erected a stone wall of silence. After whining for a while, they went away.

Don't feel compelled to answer every question posed to you by members whose only purpose in life is write one line posts and gain the legendary members status, or members who are almost certainly using multiple nicks. You know who they are.

 

[FetteredChinos]

Actually, I was a pretty good daytrader.
I used to post all my trades live. When the site comes back on line, I'll post you the link. I think my best one was a trade on NQ, that I swung overnight as a short, about $10K profit.

Ducs, if you mean Reefcap, it is actually back online..i presume you post as Ducatti999 on there?

 

[khi]

RUDE



Actually, I was a pretty good daytrader.

I used to post all my trades live. When the site comes back on line, I'll post you the link. I think my best one was a trade on NQ, that I swung overnight as a short, about $10K profit.

I am analytical, and technical trading is nothing more than fast decisions, and the ability to shrug off losses, and jump back in. It is professional gambling. It is not for everyone.

In almost the last two years now, as a fundamental trader ( investor ) I have not lost any money, none, zero. That in of itself should be all you need to know. That is the secret, if there is such a thing, learn how not to lose money...........only then will you make money

cheers d998

hi d998
i would love to learn how to day trade successfully based on fundamentals, i think its incredible that u could manage to make money out of figures that have been manipulated and published four times a year.
please shed some light on this.
khi

 

[charliechan]

CharlieChan,

Why use a stop loss unless you have not reached a proper conclusion as to what fair value is? Once this has been ascertained all you need to do is sit back and wait, the price will reach fair value. Placing a stop loss means/implies that one's judgement is suspect and the analysis is flimsy.

There is no need to resort to personal abuse just to make a point. One might infer from the tone of your posts that Ducati stole your childhood sweetheart or that you are simply one of those chaps that would pick a fight in an empty room.

because you are assuming that the market will reach 'fair value' in your time frame and at your convenience. (and on your terms)

do you know what a margin call is? you really do need to find this out!

what are you going to do while you stubbornly wait for the rest of the world to agree on your analysis?

what are you going to do when bigger players decide its time to shake the weak hands out of the markets so they can accumulate at better prices - an activity which could take months.

my advise to you would be to research the activities of the silver markets in the 70's and the meat markets of the 80's. perhaps even oil today.

please dont take too much offence, but your position suggests you have very limited experience of the markets. thats fine. we must all start somewhere. but please - for your sake - look and understand FULLY what you are getting into.

as for ducatti and my response to him - well yes it really does anger me when people talk rubbish - rubbish that could cost people their life savings or what ever and cause severe misery to their families if they believed his tosh.

to some this is a game or a hobby. thats fine. but they will end up with a rude awakening as they get too confident with lady luck at their little game.

find out what a margin call is first lion - then market history. then you will realise why we MUST have an out level that says no more. its just proper planning like in any business.

what successful business man do you know who doesnt bother to plan, analyse, or have some sort of time or price limit that he is no longer willing to hang on to? NONE

wake up!! (i mean that in the nicest way
)

 

[FetteredChinos]

and who said you have to use margin? trading on fundamentals can be as simple as buying the stocks outright?

spoiling for a fight on such a nice friday really is poor form.

 

[charliechan]

and who said you have to use margin? trading on fundamentals can be as simple as buying the stocks outright?

spoiling for a fight on such a nice friday really is poor form.

no one is trying to fight here - just wake some folk up before they post stuff where there are many lurkers trying to learn.

sure - you dont have to use margin, but the basic ethos still stands true - youve got to know when enough is enough and that your decision was 'wrong' ie the rest of the market doesnt agree.

simple.

i wouldnt for a moment assume that lion is saying that all his decisions are correct. no one is perfect


ta da - im off for market perp now.

 

[Tuffty]

charliechan,

It is possible to protect yourself or manage some risk without a mechanical stop loss based on market price. Even if the market can't see fair value trade buyers might as evidenced by the many companies getting taken over each year. Also a fundamental approach can be combined with other approaches to reduce risk such as specific entry set ups to a trade. (eg, supply/demand balance of the stock, sector rotation etc).

Your position would indicate to me you are unaware of some methodologies that can be successfully used to extract profits from the market - I mean that in the nicest possible way of course!

 

[LION63]

CharlieChan,

I believe Fettered Chinos and Tuffty have told you why a stop loss is not imperative so it would be pointless going over it again. Needless to say that if you were to look at the methods utilised by those that are of a more patient nature you will realise that placing stop losses does not enter the equation as it is an acceptance of a flawed strategy, in which case you need not place the trade in the first place.

I have read about 'Margin Calls' in books and magazine articles and I have seen a lot of posts that contain them. However, I have never had first hand experience of them so I cannot help you much in that respect. Would I be right in saying that brokers send them to traders that do not have sufficient funds in their accounts to cover their trading positions? Is this not a result of over trading, taking on too much risk, gambling? Margin calls I have been told are issued to irresponsible traders who do not have any money management skills whatsoever.

 

[khi]

RUDE


In almost the last two years now, as a fundamental trader ( investor ) I have not lost any money, none, zero. That in of itself should be all you need to know. That is the secret, if there is such a thing, learn how not to lose money...........only then will you make money

cheers d998

we know the maket has been bullish ever since the second gulf war, but would the result be the same if u had held ur portfolio from around year 2000? say if u had like many other did held on to things like Arm holdings, BT, VOD, Lloyds and many other so called solid blue chip companies? i suppose u would only have made money if u had shorted these stocks for all these year, but i dont think u could short stocks for this long, unless u have not invested at all.

 

[dbphoenix]

CharlieChan,

I believe Fettered Chinos and Tuffty have told you why a stop loss is not imperative so it would be pointless going over it again.

Now there is an undeniably true statement. Going over it again was also pointless in '00 and '01, and a great many people -- who are no longer in the market -- lost a great deal of money.

But new generations come along, with open wallets, and what was is forgotten. Which is what makes markets possible.

Not that any of this is worth arguing about, unless one's money is being traded/invested by someone else who doesn't use stops, in which case it's just a matter of finding somebody else, not of pushing for conversion.

--Db

 

[SOCRATES]

no one is trying to fight here - just wake some folk up before they post stuff where there are many lurkers trying to learn.

sure - you dont have to use margin, but the basic ethos still stands true - youve got to know when enough is enough and that your decision was 'wrong' ie the rest of the market doesnt agree.

simple.

i wouldnt for a moment assume that lion is saying that all his decisions are correct. no one is perfect


ta da - im off for market perp now.

You see, what charliechan says to you all in his first two lines above is what I explain in my post number 89 above, in reply to "A happy ending".

There is no argument here at all.

But observe where it is his priorities really lie, look at the last line. You see or not see ?

 

[charliechan]

charliechan,

It is possible to protect yourself or manage some risk without a mechanical stop loss based on market price. Even if the market can't see fair value trade buyers might as evidenced by the many companies getting taken over each year. Also a fundamental approach can be combined with other approaches to reduce risk such as specific entry set ups to a trade. (eg, supply/demand balance of the stock, sector rotation etc).

Your position would indicate to me you are unaware of some methodologies that can be successfully used to extract profits from the market - I mean that in the nicest possible way of course!

yes - indeed. a stop loss is not the be-all and end all of risk management. i never said it was.

but we must still remember that the market can do anything at anytime. this is a key cornerstone about the reality of markets.

perhaps worth pointing out that the stop level doesnt necessarily have to be a physical order resting in the market at all times. that depends on how disciplined, how much time the individual can spend watching, and how skilled he/she is.

but for most people, i would have thought the resting order would be best.

 

[charliechan]

CharlieChan,

I believe Fettered Chinos and Tuffty have told you why a stop loss is not imperative so it would be pointless going over it again. Needless to say that if you were to look at the methods utilised by those that are of a more patient nature you will realise that placing stop losses does not enter the equation as it is an acceptance of a flawed strategy, in which case you need not place the trade in the first place.

I have read about 'Margin Calls' in books and magazine articles and I have seen a lot of posts that contain them. However, I have never had first hand experience of them so I cannot help you much in that respect. Would I be right in saying that brokers send them to traders that do not have sufficient funds in their accounts to cover their trading positions? Is this not a result of over trading, taking on too much risk, gambling? Margin calls I have been told are issued to irresponsible traders who do not have any money management skills whatsoever.

yes - your understanding and examples are correct.

so, if we operate out of the belief that the market can do anything at any time, then we'd better have a predetermined point which says that the position is not going our way, and while there may be opportunity in the asset in the future, currently there is none. so at lest we have a point which tells us that our capital is best used elsewhere, and maybe we can return later when price is going our way. (sorry - that requires technical (analysis) understanding which you seem to pass off as useless). i assume of course that as a buy & hold type of person that roi is a concern for you. maybe you are happy seeing positions go deep underwater before they (if) come back. i really dont know if this fits you or not.

 

[charliechan]

You see, what charliechan says to you all in his first two lines above is what I explain in my post number 89 above, in reply to "A happy ending".

There is no argument here at all.

But observe where it is his priorities really lie, look at the last line. You see or not see ?

indeed! & thank you.

and the word should have been prep not perp for those who are scratching their heads.

 

[chump]

DBP,
"Now there is an undeniably true statement. Going over it again was also pointless in '00 and '01, and a great many people -- who are no longer in the market -- lost a great deal of money."....

and exactly why was that ? ...inappropriate asset allocation ,disregard for time and capital requirements and incorrect temperament to be holding what they were holding...

This is called knowing yourself and knowing your business ...and with all due respect the comments I read this morning from Socrates, Charlie Chan and yourself if I make the assumption as to what you were implying are all incorrect for the same reason....there as to be losers ..those who will not or cannot learn the above...we all know who they are ...they are the inpatient, the greedy and the stupid and thank god there are a lot of them ..we need them...and this why Socrates and Charlie Chan I disagree with you...posters here owe nothing to these people other than to not diliberately mislead them and frankly I don't think Ducatti is doing that ..if anything I think he has not explained himself thorughly and clearly ,but if I am correct he will do so given a chance.. seriously ..anyone coming here reading posts who then goes out and actually puts money on the line without first doing some thorough testing should send me his/her CV because I still need a gardener and my garden is a much safer place for them than the marketplace...if this sounds harsh believe me it's meant to ..I am sick and tired of hearing why people cannot or should not take personal responsibility for their actions and in this case that means you don't take sweets (advice) from strangers as a basis to act (trade)..

when it comes to stops and the modus operandi that I think Ducatti is advocating you have to remember (and these are your words Socrates) "you can't have it all all of the time" ...that means within your portfolio of activity there will always be something misbehaving (dotcom)..but if your asset allocation was correct for the specific circumstances you will move on from this and the loss will simply be an aggregate part of your performance...in fact "knowing "Ducatti for a contrarian he would be looking to redress the drawdown by shifting asset allocation to pick up 'fair value' for change...

Mr D,
if I am misunderstanding your methodology now would be a good time to tell me...and no you didn't say your were a contrarian ,but I recognise the signs

 

[charliechan]

But new generations come along, with open wallets, and what was is forgotten. Which is what makes markets possible.



--Db

& God bless 'em. every last one of them!!

without ignorance - where would we be?!

i'd probably have to get a 9-5 for a start! no thanks!!!!

 

[LION63]

CharlieChan,

It all comes down to stock selection, and the criteria that is used to do it. For instance, I will not trade shares (long) that offer hope and jam tomorrow or that has an up and coming product that might change the world. I need to see a real business model, cash flow, assets, profits and a reasonable track record. It does not matter that the position is under water for a few days, weeks or even months; I would not like it but that is business and I have to accept it. The last time i bought shares in a company that went bust was 1989 so I do not need to worry about that.

How many experienced traders lost reasonable sums of money when the tech shares hit the skids? At worst they gave back some of their profits and the chances are they made more on the way down than they made on the way up. Why and how did they manage to achieve this? It was by simply doing their own research and backing their conclusions with money whilst being patient.

Traders that lack patience are doomed to failure or mediocrity.

 

[charliechan]

CharlieChan,

It all comes down to stock selection, and the criteria that is used to do it. For instance, I will not trade shares (long) that offer hope and jam tomorrow or that has an up and coming product that might change the world. I need to see a real business model, cash flow, assets, profits and a reasonable track record. It does not matter that the position is under water for a few days, weeks or even months; I would not like it but that is business and I have to accept it. The last time i bought shares in a company that went bust was 1989 so I do not need to worry about that.

How many experienced traders lost reasonable sums of money when the tech shares hit the skids? At worst they gave back some of their profits and the chances are they made more on the way down than they made on the way up. Why and how did they manage to achieve this? It was by simply doing their own research and backing their conclusions with money whilst being patient.

Traders that lack patience are doomed to failure or mediocrity.

no you dont have to worry about it do you. no company will ever go bust again - ever, will it? of course not. lightening never strikes twice does it - especially if we have read all the books and looked at the balance sheets. of course not. because we know more than the people running the company dont we.

of course.

i can see why you dont need to use stops now. because you are never wrong, and dont mind having your capital tied up for long periods doing nothing but diminishing! of course. how silly of me to think it may be wise to put your money to work more effectively (trying not to use the word efficiently ) else where. being patient is far more important than making our money work for us. after all, this is the business of being patient, not of making money. of course!! silly me.

a lot is said of patience and the markets. like most things it is painfully misunderstood.

we should have patience waiting for THE RIGHT opportunity, but NOT PATIENT if what we expect does not materialise.

 

[dbphoenix]

and exactly why was that ? ...inappropriate asset allocation, disregard for time and capital requirements and incorrect temperament to be holding what they were holding...

Well, no, though I'm sure your comments apply to some. To a large extent, people lost money because (a) they listened to the wrong songs and (b) didn't know when to say when. And they will never see the prices they paid again.

It's all well and good to claim that one hasn't lost any money during the last two years. When did the market turn? March/April two years ago. As they say, never confuse brains with a bull market (or bear market rally, if you prefer).

But I wasted a lot of time on this in early '00 on The Motley Fool. A few people paid attention. Most didn't. Then we got all the boohoo and the mobs demanding that the analysts be strung up.

It's not something I want to get into again. Not my money. Don't care. As the French say, every pot must sit on its own bottom.

--Db

 

[chump]

No problem, that notwithstanding losing money is part of risk and if you don't plan for the possibility why are you trading...and yes, what I am saying is those people had no plan that suited them specifically and their business specifically..to be frank I don''t know how you can disagree..I've read you singing from the same hymn book yourself and I fully agree with the song...