Wanna share your stock trading strategies?

[ken_xman]

Originally posted by cantdrv55
Look for QQQQ. I believe it's the Nasdaq 100 ETF.

Sorry.. yes its symbol is now QQQQ.

[Owain]

One strategy that I've read (maybe here?) and have been meaning to try out is that of watching the moving average price of a stock. Ideally you want to buy a stock when the daily price crosses the 50-day moving average trending upward, and then sell again when the price crosses the average trending downward again. That way you can't lose money, 'cause all the time that the stock spends above the average moves that average higher than the price that you bought at. You may not see huge returns, but it's a good indicator of when to sell without losing money.

As an example, look at the chart for IBM. If you had bought in the middle of Sepember at about $81, following the average would indicate you should have sold towards the end of November at about $85. Unfortunately you missed the peak at about $89, but how were you to know that was the peak at the time?

If you're a little more adventurous you can watch, say, the 20-day average. You'll make more transactions, but the potential for higher returns is there. Or maybe mix it up a bit: buy using the 50-day average and sell when it moves down past the 20-day average, then move on to one of the other stocks you've been watching that is trending upwards over the 50-day average.

The theory sounds good to me, but I haven't tried it myself, yet.

[turbo6bar]

Originally posted by JanusCole
But you've done options, eh? So far, that has seemed too complicated for me - kind of like a great way to give my money away in big chunks. Do you have a particular method or approach? The only thing I think I know about options is that it is supposedly somehow better to buy calls "in the money"....but I've never been able to figure out why...

I'm not an option trader. I've bought 2 put options. One was good. One was bad.

If you're willing to actively trade a stock, what's wrong with buying an option on that stock? I define active trading as buying and selling within a few months or weeks of time. If your analysis says it will go up, you can control the stock with an option. If it goes up, you get a great gain. If it goes down, your loss is limited to the cost of the option. In some cases, the option cost is equal to the loss you might incur if you had a stop loss at 5-7%.

Time to update the last hot stock thread.

[Rich76_911s]

If you are interested in learning about options check out the CBOE site there is a lot of good information there;

http://www.cboe.com/LearnCenter/Tutorials.aspx

Also take a look at

www.investopedia.com
They have some great articles and information on that page. You can even sign up for a simulator to practice. The last time I used it you could only buy options not sell them, which gives you limited experience.

A great book to read on options is:
Option Volatility and Pricing by Ralph Natenburg, at the very least it'll help you sleep.

If you have any questions I can help drop me a pm or email whatever. It really is not that hard just takes a little time to figure them out. Hard to make money in options when volatility is at 11 though.

Rich

[Nathans_Dad]

Good discussion...here's my method (or madness as the case may be):

I manage all my own finances and investments, but we don't have too much money in there yet (less than $80k). I started out with about 70% in index funds, 25% in individual stocks and the other 5% cash reserves (this is allr retirement money). I also keep some emergency funds in the ole savings account. I like the Vanguard funds because they have some of the lowest fees. I personally bought into their "Life Strategy Growth" fund which is a mix of US and International Indexes, a Bond Index and then cash. The fund manager can move money between indexes within certain parameters. Anyhow, it gives you some decent diversification to set up your base.

With my active trading account I use AAII's stock screener. There are several different screens there that they have pre-set for you. I try and keep at least 5 stocks in that account plus some cash for dry powder. I've been able to make about 20% this year in that account and I'm pretty happy with that.

Biggest lesson I have learned so far is that you have to really separate your emotions from the decision making process. It's a little easier for me since I know it is retirement money that I can't touch for almost 30 years anyways so it almost becomes like Monopoly money. Anyhow, my best investments have been when I had the huevos to buy when the blood was running in the streets and sell when everyone thought the stock could do no wrong.

Probably I will be moving more into mutual funds because after I get out of the military my job will take up a lot more time so I probably won't be able to watch my stocks as much.

I like both of Ric Edelstein's books, excellent for overall financial planning ideas.

[Wrecked944]

Does anybody know how to do a search for stocks that have steadily increasing prices with little or no volitility? Like a steady incline? I search for stocks like that by pouring through zillions of charts because they have (as you'd expect) tended to go up for me with little or no drama. But I can't find a stock screener with an option for "rising price with no drama" stocks. I tried selecting volitility measurements like beta but that does not seem to work. Any ideas?

Oh yeah, and who here plays with penny stocks and where do you find them? I've never tried but it is intriguing. For instance, Hardrive, where did you find TWTC?

[HardDrive]

Originally posted by JanusCole
I've never tried but it is intriguing. For instance, Hardrive, where did you find TWTC?

After months of careful research and analysis, I narrowed down.....PFFFFFTTT!!!

It was a complete gamble.

I bought it because I read one article that suggested that TWTC was in a good position to weather the tech crash because it had access to Time Warner cash. Turned out to correct, but lets face facts, it was luck...reading one article does not qualify as research.

[Rob Channell]

Buy high, sell low. It hasn't worked too well so far. I don't recommend it.
I will probably just spread what little I have left into some different index funds and let it go sometime early next year.

I should've bought a bunch of guns when I had the chance. Supressed MP5 at $3000, M16 at$1200, etc.

[cantdrv55]

No affiliation with Investools other than I'm a satisfied customer.

Options are very risky as you own no equity so I wouldn't trade them unless you know what you're doing. Yes, you can buy books about options and lose money like I have or buy the training tools from Investools or Optionetics and make back what you spent on the training program and then some, like I've done as well.

Training isn't cheap which makes one more dedicated and commited. However, you can buy used DVDs and manuals off eBay for a small fraction of their cost when new. You just won't get the live classroom training or on-line coaching.

Then, you can subscribe to the Investools website where you can use the search feature to your heart's desire. I believe their turbo search function can find stocks with low relative volatility and increasing price.

[Wrecked944]

Okay, I started selling into the new year bull market and wiped the slate pretty clean (except for my precious Porsche shares!). So I took my meager winnings and decided to get a little frisky (you can't spell "frisky" without "risky").

I searched a bunch of stocks and decided to try a momentum play with TKF - The Turkish Investment fund. It appears to be en fuego so I decided to jump on board to see if I can ride it for a few points. The stock was down today and so I felt it was a decent time to buy.

The stock opened at $25.85 and began falling so I put in a limit order for 1600 shares at $25.50. However, it was trading strongly above that so I bumped it up to $25.53. That got me 700 or so shares before the price jumped. So I reset my price for the remaining 800 shares to $25.61 and $25.62 and filled out the rest of my order with a combined cost basis of $25.58.

I am going into detail because this was my first attempt at using limit orders to take advantage of volitility and get shares at a discount. I used to do only market orders but this method seems to produce good results (although it can be nerve wracking). I got the stock at 10 cents less than it cost when I decided to execute the trade. So that is an instant benefit.

The stock closed at $25.60 - so I am already marginally in the green thanks to those limit orders. Going forward, I plan to use a type of STOP order that I just learned about. It is called a "Trailing Stop" and it basically follows the price of the stock and sets a new StopLoss price whenever the stock goes up. I used this type of order when I was cashing out and I think it is a pretty slick. It sems to help me lock in gains and avoid my bad habit of riding stocks up and then all the way back down again. I figure I'll set the order to trail at like 3% behind the current price and set it to GTC (Good Till Cancelled). I hope that will help me enforce some more discipline in my trading and limit my downside risk.

Okay, that was pretty long winded. I hope y'all don't mind. Opinions and advice are encouraged. I'll let you know how it works out and maybe try out a few more trades as time goes by. Fingers crossed!

[cantdrv55]

Which broker do you use that allows automatic trailing stops or do you adjust every so often?

Never mind. I just figured out how to do this in OptionsXpress.

[Wrecked944]

Originally posted by cantdrv55
Which broker do you use that allows automatic trailing stops or do you adjust every so often?

I use plain old Ameritrade. They offer two flavors of the Trailing Stop. You can either set a percentage below the peak price or a hard dollar value below it. The former makes more sense to me so that is what I have been using. It is a bit like trading with training wheels in that it can definitely dampen upside gains. But I'm not nearly a good enough trader to be able to tell the difference between "unusual downside volitility" and "stock price warping to zero". So it helps to put a floor under the price and save me from myself. When I was selling off my winners earlier this week it helped me lock in gains and avoid using "hope" as a pricing strategy.

[Dottore]

Buy the stock of companies producing products that you like. In my case Apple, Porsche and Sony. I also have some Proctor & Gamble because they produce stuff we all need and buy.

Very unsophisticated investment strategy perhaps - but it has worked very nicely for me.

[slakjaw]

Just for the hell of it I was looking at diffrent stocks. I looked up my telephone provider and they are at less than a penny. (MCLD.PK)
HAHAHA no wonder they are not hiring right now.
I wonder if I am their only customer LOL

What does the .PK mean?

[TerryBPP]

"Sell pork bellies, buy gold."

-Chevy Chase in Nothing But Trouble

[Joeaksa]

Glad you guys understand this, never been good with the market. Municipal bonds, slow, stable and tax free have done me well but put my money in them 20 years ago...

Joe A

[Wrecked944]

Update: TKF is up to $25.85 today. With 1600 shares, that's a $432 gain for just pointing and clicking the mouse. Fun hobby, eh? So now I plan to log on to Ameritrade and set my stop order somewere above my purchase price (but well below the current price) to lock in a minimal gain. Then if it continues to rise, I'll set a trailing stop to follow it up automatically. With even a small gain locked in, I'm playing with "The House's Money" at this point and plan to let it ride.

Hmmm...This seems to have become my defacto trading diary. If it gets annoying/boring, just let me know and I'll stop posting. But I really do appreciate your opinions. This is all pretty new for me and I'm tyring to understand it better.

[Wrecked944]

Originally posted by slakjaw
JWhat does the .PK mean?

From Wikipedia...

NYSE "behind the dot" or Nasdaq 5th-letter codes and other special codes

.PK - A Pink Sheet, indicating over-the-counter
SC - Nasdaq Small Cap
NM - Nasdaq National Market


Pink Sheets

From Wikipedia, the free encyclopedia.

Pink Sheets is an electronic system, published by Pink Sheets LLC, to display bid and ask quotation prices. The name "Pink Sheets" stems itself from an earlier paper-based system, which was printed on pink paper. It is mainly used by stock brokers trading OTC securities.

Pink Sheets LLC is neither an NASD broker-dealer, nor registered with the U.S. Securities and Exchange Commission; it is not a stock exchange, the companies listed don't need to fulfill any requirements. With the exception of a few foreign issuers, the companies quoted in the Pink Sheets tend to be closely held, extremely small and/or thinly traded. Most do not meet the minimum listing requirements for trading on a national securities exchange, such as the New York Stock Exchange or the NASDAQ Stock Market. Many of these companies do not file periodic reports or audited financial statements with the SEC, making it very difficult for investors to find reliable, unbiased information about those companies.

For these reasons, the SEC sees companies listed on Pink Sheets as "among the most risky investments" and advises potential investors to heavily research the companies they plan to invest in.

[Nathans_Dad]

I've been investing for 4 years and this year was easily my best. I made about 40% on average in 2005 on my stock trading account. Plus it gives me something to watch when I am bored.

Agree with the double down on your losses statement above. This is assuming that nothing about the basic company has changed.

Example from last month: I bought SFCC at about $45 per share after finding it on a stock screener program I use (from AAII.com if anyone is interested, that is an awesome website). Earnings growing like crazy, lots of cash in the bank, overall a solid growth stock play. Stock stayed around $45 for a while, then fell back into the $39 range. Article came out in the media bashing the company (won't get into details, research it if you like). Basically bunch of mean-spirited personal attack type journalism. Nothing about the company's ability to make money has changed. BUT, it dropped all the way to $13 per share in about 1 week. WOW!! That's a 70% drop in price.

Here's how I played it. Sold my original shares at about $36 on the first day of the drop. Read through the article and did more research. Decided it was BS. Bought a position at $22 a few days later, doubled down at $17 and bought again at $13. Stock has rebounded and I sold yesterday for $20, making back my initial loss plus a little on the whole deal.

I have only played one penny stock, bought it at $.68 per share and sold at $.85 per share. Overall penny stocks are very very risky and for every one that doubles or triples there are 20 that get delisted.

Right now I am rebalancing my portfolio and am going to be buying more mutual funds and reducing my exposure to individual stocks. I'm going to take a shot and buy a fund I found that invests in the far east emerging markets, China, Korea, Malaysia, India, etc. I figure if the US companies are gonna keep outsourcing, I am gonna make some money off it, durn it.

I'm not an expert but I have read more than a few books on investing and would be happy to point the way to good website or books to read if anyone is interested, just PM me.

[Wrecked944]

Just filled another limit order. This one for 460 shares of ATI at $40.50. I've wanted to get in to this stock for a while but the damned thing won't pull back. It just seems to go up and up and up. So I had to bend my rules and buy on an up day.