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Technical Analysis and Trading.....Anyone?

Discussion in 'Other Off Topic Forum' started by JSinNOLA, Feb 4, 2004.

  1. JSinNOLA

    JSinNOLA F1 World Champ
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    Right now I am taking a class on daily scalping of the EURUSD(That ricen scare sure hurt the dollar for a few hours!). My professor is bigtime into technical analysis and rubs elbows with the likes of George Soros and Stan Jonas(FIMAT).

    Everything thusfar has been EXTREMELY interesting and I think that I would like to redirect some of my energy into obtaining as much knowledge about trading as possible. I am looking open to anything related to fixed income derivatives...


    Also, any advice on books to help me get started? I am currently reading:
    A Beginner's Guide to Short-Term Trading(Toni Turner)
    Rule the Freakin' Markets(Michael Parness), and
    Trading in the Zone(Mark Douglas)

    After I am finished with these books I will start reading Japanese Candlestick Charting Techniques(Steve Nison).

    I was wondering if anyone here does FX trading or if you have any comments about technical vs. fundamental analysis. Your thoughts are appreciated!
     
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  3. Hubert888

    Hubert888 F1 Veteran
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    One great book that I highly recommend about the psychology of the stock market is:

    Reminiscences of a Stock Operator
    by Edwin Lefèvre

    Great book and 100% accurate about how traders think when they have stock positions (long and short).

    I believe that the best trading strategy involves a synthesis of all trading techniques using technical analysis, fundamental analysis, and momentum.
     
  4. JSinNOLA

    JSinNOLA F1 World Champ
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    Red line is unadjusted 200 day moving average
    Blue is 20 day ' '
    Yellow is 10 day ' '

    This chart begins 3:10 PM yesterday way after the ricen depreciated the dollar and ends today around 4:28 or so... G7 in 2 days should be interesting. Looks like it will completely overshadow today and monday's ISM numbers. That and the employment report on Friday should make for some high volume. Will be fun to watch!:)
     
  5. JSinNOLA

    JSinNOLA F1 World Champ
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    Thanks Hubert! Do you trade in NY?

    Keep them coming:)
     
  6. JSinNOLA

    JSinNOLA F1 World Champ
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    Hmmmm.... Maybe more of the trader types will be up in the morning...
     
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  8. JSinNOLA

    JSinNOLA F1 World Champ
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  9. ty (360mode)

    ty (360mode) Formula Junior

    Sep 25, 2002
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    lol john, i'm with you - it's surprising that not more fchatters are into trading. go figure!

    anyway, fwiw, i've pretty much thrown all my "knowledge" out the door and have simply become a contrarian on solid companies. i basically have set my watchlist on leaders in different sectors and industries and when these companies sell-off b/c of sympathy with the market, it's peers or an overreaction to some event such as earnings, i buy (so long as there truly is no long-term fundamental change in the company or it's outlook). gloom and doom is my favorite time :) ie, dell, csco, sebl, orcl, luv, etc...

    is this scientific, no, technical, no, fundamental, not really - but i've been a helluva lot more successful trading in this manner than wading thru charts, EMA's, SMA's, bands, etc.etc...

    but the best advice i ever got was when my broker friend, who introduced me to trading, told me the old saying "bulls make money, bears make money, but the PIG always gets slaughtered". i've been a PIG many times and gotten my a$$ handed to me b/c of it! i'm still learning...
     
  10. BubblesQuah

    BubblesQuah F1 World Champ
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    Forget about everything except "Trading in the Zone". The only other book to read is "Fooled by Randomness" by Nassim Taleb. Read "Fooled" again and again.

    IMO, ANY "how to trade" book is a waste of time and money. You will find that short term trading of anything is nearly 100% psychological.

    Rule the Freakin' Markets by Parness? LOL, please - that guy is pure snake oil, hard to imagine anyone serious about this could even make it past the first chapter of his book without laughing themselves into a stupor.

    It will take you at least a couple of years to find out if you can actually make money in short-term trading of anything - the learning curve is extremely steep, and in you have to make all the mistakes everyone else makes in order to get your head straight. If you have any money left after that, then you might have a chance.

    FX is certainly not the place for a beginner to learn, IMO.
     
  11. BubblesQuah

    BubblesQuah F1 World Champ
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    That's a "pretty" chart - but I'm wonder exactly how your class taught you to trade it? From what I can see - it would have been useless (read: money losing) in real time trading.
     
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  13. Hubert888

    Hubert888 F1 Veteran
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    Yes John, I live and trade in NYC. Ive been a senior proprietary trader since 1996. Now I am currently in the process of setting up my own hedge fund. My trading style is more based on momentum trading and I love to take the contrarian stance.
     
  14. Sean F.

    Sean F. F1 Rookie

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    I use IBD's and Bill O'Niels book "How to make money in Stocks" to trade.

    It's a good method, but YOU HAVE TO FOLLOW the rules, especially the 8% stop loss rule. The only time's I've lost money using his method (tech and fundamental) to buy stocks is when I did follow the 8% rule b/c I thought the stock would rebound.

    www.investors.com

    Has a good education section that is free. It covers most of the basics, but his book does a better job. While you can get a lot of the stuff he covers off YAHOO, and other financial web sites, the IBD paper/web site sums it up for you and saves a lot of time. IMO, it's worth the $200/yr subscription.

    The started using message boards last spring and they are great b/c of the number of good stocks other have posted on, and bad ones too avoid.
     
  15. Napolis

    Napolis Three Time F1 World Champ
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  16. JSinNOLA

    JSinNOLA F1 World Champ
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    This response has been exactly what I was hoping for. All of these suggestions will prove very useful to me I'm sure.

    Since I already have Trading in the Zone I will go ahead and have it read by next week. Right now I am extremely busy (6 classes and graduating in May). Trying to juggle all of this work takes away some of my time to focus on trading, but luckily I am extremely interesting in learning as much as I can as quickly as I can, regarldess of strain.

    I now have a ton of books I need to go buy and read through and through. Keep the advice/suggestions/comments coming!

    Thanks again guys! I haven't looked into it today, but what happened at the beginning of trading in London this morning to strenghten the euro so much? Speculation on the g7 and employment reports? Bank of Enlgand meeting? Now its back around the 200 day moving avg.






    Sean, my professor stresses stop-losses more than any other topic in class it seems. Dicipline, dicipline, dicipline...
     
  17. ntol

    ntol Karting

    Dec 19, 2003
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    I trade penny stocks and stocks under $5. My latest buy was QBID... at .0003. Closed today at .0007. Seems to have a bit of attention at the moment. I keep my finger on the triger. Oh yeah...by the way...yes it is what it says it is. Go figure?!
     
  18. F550kid

    F550kid Karting

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    Hi there,

    I am a proprietary trader for Goldman sachs in london and trade currencies/fixed income/commodities and equity indices.

    While it is true that most trading books are useless there are some that are essential. I can only speak for myself but I went from a being a dentist in 1990 to a prime trading position on the 'street'.

    The following books were critical to that transition.

    reminscences of a stock operator
    market wizards
    new market wizards
    pit bull
    trade your way to financial freedom( probably the most important because of his constant referall to pyschology)
    rich dad, poor dad
    soros on soros
    the alchemy of finance

    I suggest reading and re reading all these books.

    i must have read market wizards about 20 times in last 10 years.

    trading successfully is all about control of your emotions.
    technicals in my opinion are more important than fundamentals.

    i have seen far more traders go broke beacuse of a belief in the fundamentals whilst ignoring the charts.

    trade liquid futures markets that have 24 hr trading. FX and fixed income is far better than equity indices

    good luck


    zak
     
  19. cohiba_man

    cohiba_man Formula Junior

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    I trade equity index futures, the e-mini SP500, I've only been 'live' (cash trading rather than paper trading) for about 2 weeks, but I'm averaging 3-5 points a day on a system I learned the basics of from a VERY successful trader and made my own. Thats 300-500 a day now on 2 contracts and once Im confident enough I'll work my way up to 20 contracts, so 3-5K a day. My system works very well but if I EVER let emotion interfere (only happened once) I get screwed.
     
  20. JSinNOLA

    JSinNOLA F1 World Champ
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    Talk about a huge move this morning! Anyone here trade this jump? Check it out:
     
  21. F360@20

    F360@20 Karting

    Nov 24, 2003
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    (lol john, i'm with you - it's surprising that not more fchatters are into trading. go figure!)


    I lost $125,000 that was enough for me to stop.
     
  22. ty (360mode)

    ty (360mode) Formula Junior

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    yep, i share your pain. i was disciplined and played SNDK all last year and made a bundle (check out the 2003 chart). then i got greedy in november and took about 90% of my profits and bought a TON of dec 85 calls that expired worthless (check out SNDK the last 2 months :() my only saving grace were some cheap insurance way out of the money feb puts i bought.
     
  23. F550kid

    F550kid Karting

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    Hi john/futureowner,
    I replied to your pm....did u get it?
     
  24. JSinNOLA

    JSinNOLA F1 World Champ
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    Zak

    I most certainly got it! Thanks for your interesting thoughts. This morning I went to listen to Jim Caron from Merrill Lynch speak about fixed income. His position is Director, Global Technical Analysis.

    One of the books he recommended was "The Disciplined Trader". Have you read this book?

    Also, thanks for your offer to let me probe you for some advice as I proceed on this journey. I am sure that I will have questions along the way that you may be able to help me out with. I'll be in touch soon.

    Take care,
    John


    One other thing, he asked us to guess how many PhD Econ or Stat guys trade under him. The answer? ZERO! Shows how being perceptive can be largely prefered to bening overly fundamental.
     
  25. F550kid

    F550kid Karting

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    Hi john,

    No, I havent read this book but from the title its sounds like one you should read.

    I think the lessons of LTCM in 1998 which were replicated in many banks on a smaller scale highlighted the fact that markets are composed of human beings who react to fear and greed. Theoretical arbitrages have never stopped and will never stop the formation and propgagation followed by burst of bubbles.

    The human psychology is what allows us to make money trading and provides such an intersting dilemma about trading.

    'When genius failed' by Roger Lowenstein is a great synopsis of LTCM debacle.

    Zak.
     
  26. JSinNOLA

    JSinNOLA F1 World Champ
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    LTCM is really an amazing phenomena to look at. It is just hard to believe how certain those 15 people thought they were about the reliability of their models. Even more interesting since 2 of them were Nobel prize winners (Merton and Scholes). Talk about having to walk away with your tail between your legs...
     
  27. JSinNOLA

    JSinNOLA F1 World Champ
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    I forgot to mention that I just ordered a few recommended books from amazon.

    Trading Your Way to Financial Freedom
    The Disciplined Trader
    Remenisces of a Stock Operator
    and
    Market Wizards


    I already have read most of the New New Thing, but that was right when it came out. I might re-read though.

    I can't wait to see what the euro does in a few hours in reaction to the G7:)
     
  28. JSinNOLA

    JSinNOLA F1 World Champ
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    Latest update.....Looks like the G7 meeting further spurred selling of the dollar. Anyone care to speculate on a stable spot for the Euro? As of this moment it is steadily climbing from 1.2748
     

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