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Lionel,
I think we can get a good discussion going here. What I actually
use is trend lines or channels, but let's defer that to later. I want
to start with just a basic discussion on trend line and channel
construction which several people have shown an interest in. I'll see
if I can get time to post something later today.
JimG
-----Original Message-----
From: Lionel and Gail Issen <lissen@xxxxxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Sunday, November 15, 1998 10:38 AM
Subject: Re: Stock Trading Building Blocks
>Jim:
>
>Let me say that you are not at all out of scope. You are discussing
>philosophy/theory. There are few things more practical than a good
>philosophy/theory to guide your actions.
>
>Item 5 on stops may need some clarification. For example, if you
mean
>crossing a moving average and using an oscillator like rsi or stoch
or some
>such, I agree with you. If you mean using a previous low,
intermediate or
>major, I'd say no, not by itself. This method can give you major
losses.
>
>Lionel
>-----Original Message-----
>From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
>To: Metastock <metastock@xxxxxxxxxxxxx>
>Date: Saturday, November 14, 1998 6:32 PM
>Subject: Stock Trading Building Blocks
>
>
>>All,
>> This may be slightly out of scope in that it is a larger topic
>>than just MetaStock charting and testing, although that's definitely
a
>>good part of it. I thought it would be interesting to share our
ideas
>>on the building blocks or elements of a complete stock trading
>>methodology.
>>
>> I have tried to build my own trading system on what I think is
a
>>logical set of building blocks. The elements of my trading system
>>follow:
>>1. A systematic method of narrowing the universe of stocks to a few
>>potential trading candidates that have certain characteristics that
>>have resulted in successful trades in the past. My searches or
>>filters use a combination of fundamental and technical criteria.
>>2. A market tracking mechanism that indicates when it is OK to
enter
>>a position and whether that position should be long or short. I use
>>trend channels for this.
>>3. Tests and a methodology for making the final stock selection for
>>new positions.
>>4. A money management system that limits overall portfolio risk on
>>each new position and tells how large each position should be. I
>>won't risk more than 5% (usually 2 to 3%) of my portfolio on any one
>>position.
>>5. A method for setting stops and targets although targets are not
>>always required. Stops should be based on Technical Analysis rather
>>than an arbitrary percentage or point move. Stop placement tied
back
>>to money management can affect position size. Again, I use trend
>>channels for this.
>>6. An exit strategy. Mine is simple, exit when a target or stop is
>>hit.
>>
>> Does anyone have any comments on the above building blocks?
Any
>>to add? Do you disagree with any? Is anyone interested into going
>>into details on each of the building blocks?
>>
>>JimG
>>
>>
>>
>>
>>
>>
>>
>
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