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<DIV><FONT face=Arial>Hello all Realtraders:</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> I have been following this
site for well over a year now. I've been the proverbiale fly on the wall only
once or twice jumping in with a question. Much of the conversation seems rotate
around how hard it is to consistently make a profit daytradeing, mental
attitudes, and paying your dues to learn this misterious art. The negativity is
discourageing to us newbies, However I'm sure I'm not alone in continueing to
search for the Holy Grail of systems and indicators that will lead me to the
promised land of easy money.</FONT></DIV>
<DIV><FONT face=Arial> I'm a rank amateur in
tradeing with a few years experience and a couple of short term successes to
pump my ego. I focus on larger cap stocks, avoiding options, commodities and
bonds etc... too scary. I've read numerous books and magazines enough to know
the basics. I've come up with some simple ideas of my own I'd like to propose
and open to constructive critisism by those with more experience.</FONT></DIV>
<DIV><FONT face=Arial> One of the things I've picked up
from reading this page is that you need to find or develop a system that fits
your situation and comfort level. I need to develop a system that won't require
minute to minute monitoring, I don't want to be tied to a monitor, I have a real
job too. My system needs to draw on the experience and skills of others, this
isn't parasitic, but I'm realistic about my limitations. I won't be quiting my
current occupation anytime soon to join a brokerage house to gain experience by
working as a floor trader for 10 years. My method needs to have realistic chance
of beating the market on a consistent basis, if not I'll just go to a no brainer
like vangaurd's 500 index fund. My method needs to capitalise on my only
advantages as an amateur trader that is access to data, speed of tradeing, and
small account size. Perhaps these aren't advantages as such but they are the
only areas were I might at least have a level playing field chance to accel.
Because of my non-diversified approach I'll need to concentrate on large stocks
that are less likely to whip me around and are very liquid.</FONT></DIV>
<DIV><FONT face=Arial> We've all looked at a stock like
microsoft, dell, aol and wished we could have bought it back when it was a
fraction of it's current worth. We torment ourselves by calculating what our
account might look like if we'd had bought it and held on. Many of us have
jumped in and out of a stock for a quick profit only to see it a year later many
times higher than when we owned it. Truth is few of us would have picked that
one stock out of 17,000 or so, and if we had, chances are you probably wouldn't
have put enough into it or had held on to it for long enough. The future MSFT
are out there waiting to be discovered.</FONT></DIV>
<DIV><FONT face=Arial> The other day I looked
through the rankings of the richest people in america as ranked by the fortune
500 magazine. There were a number of investors but I don't remember any traders.
Some held a small number of stocks like Warren Buffet; others, by owning there
own business, held the equivalent of one stock. This observation leads me to
think broad diversification of assets leads to medeocre results (like mutual
funds) and true fortunes are built on a non-diversified approach. Perhaps this
is stateing the obvious to some but bear with me.</FONT></DIV>
<DIV> </DIV>
<DIV><STRONG>ASSUMPTION NUMBER ONE- HOLD VERY FEW STOCKS, PREFERABLY JUST ONE,
PREFERABLY THE BEST</STRONG></DIV>
<DIV> </DIV>
<DIV><STRONG>ASSUMPTION NUMBER TWO- STAY FULLY INVESTED, DON'T JUMP IN AND OUT
OF THE MARKET, BUT DO SWITCH STOCKS OR THAT ONE STOCK AS NEEDED</STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> OK...so which is the best stock?
</FONT></DIV>
<DIV><FONT face=Arial>Stock analysis seems to be split into two camps
fundamental analysis and technical analysis. </FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> I find fundamental analysis
to be flustrating and not for amateurs like me; the more the variables, the more
confusion and there are hundreds of variables to consider. Even if your data is
accurate, timely and you have the experience to put it together into a
conclusion and the courage to act on it the market may still go against you. You
can be right and still go unrewarded. Or you can be right at the wrong time. Or
you can be right and everone else with the same data can come to the
same conclusion, but no one acts untill they see some movement
in the price.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> Technical analysis is more
comforting to me, I can understand numbers but I think it can go too far. I
think it can lead you into a false sense of security. The exacting nature of
numbers can make you think its a science when its probably more of an art. I see
all technical analysis as based on only two things PRICE and VOLUME...and I
don't see volume as being very helpful. And so my system is based on price
action only. Others have come to this conclusion I'm far from original on this.
</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>What do you want from a stock?...you want it to go
up</FONT></DIV>
<DIV><FONT face=Arial>Which is the best stock?...the one that goes up the
most</FONT></DIV>
<DIV> </DIV>
<DIV><STRONG>ASSUMTION THREE-THE BEST STOCK IS THE ONE THAT GOES UP THE MOST
OVER TIME...duh, stay with me</STRONG></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>Few people even the pros can pick that one stock
accuratly, but most of us can pick a set of stocks to concentrate on that have a
high probability of containing a true winner. </FONT></DIV>
<DIV><STRONG>To find the fastest horse in a group simply race the horses, the
fastest one will cross the finish line first.</STRONG></DIV>
<DIV><FONT face=Arial>Likewise to find the fastest appreciating stock, race
them. Choose your set of stocks, maybe 12 to 30 of them., drawing on the a fixed
set like the dow 30 or money magazines 30, taking the advice of your favorite
guru or newsletter to come up with your set. convert their prices to a simple
percent start them at the same point in time, buy the one that pulls ahead first
by about 10% or so. If anouther stock closes from behind jump to that stock as
it passes the first. If the stock your in losses momentum and the second best
catches up, jump to it when it becomes the best. The second best stock acts as a
relative stop, it is affected by overall market conditions the same as the first
and as such is less ridgid than a straight percentage stop loss or fixed dollar
amount.The hope is that it will keep you in the best stock as the market
girates. To make a jump, monitor the progress of your choosen stocks nightly
useing end of day data. As the second best eqauls or excedes the first put in an
order to sell on open the stock you own and buy on open the new stock. Both
orders are executed without you there in a nano second and at a low commission
rate. Switching like this would be frequent at first but as you move through
time it would become less common.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> To keep with the horse race
analogy you are the fly on the nose of the lead horse. Jump from horse to horse
but always stay in the race. At times you'll be way ahead then fall back but as
long as you stay in the race and on the nose of the lead horse you will cross
the finish line with the best stock (uh...horse).no matter what time frame you
choose. </FONT></DIV>
<DIV> </DIV>
<DIV> Perhaps this isn't a system after all, but is more
of a non-diversified money management method. But before you dismiss this
approach as too simplistic to work look at some of the results I've been
tracking, many of these initial portfolios are found on the Motley
Fools home page.</DIV>
<DIV> </DIV>
<DIV>Using this group of
stocks
Since
Return wo/taxes commissions slippage etc</DIV></FONT></DIV>
<DIV><FONT face=Arial size=2></FONT> </DIV>
<DIV><FONT face=Arial size=2>Money
30
9/98 190% with
SUNW (2nd best MSFT @
74%)
<DIV><FONT size=2>Fool
Portfolio
9/98 507% with
AOL (2nd best KLAC @ 96%)</FONT></DIV>
<DIV><FONT face=Arial size=2><FONT size=2>IBD Relative </FONT>Strength (Foolish
Workshop) 1/99
117% with VISX (2nd best SCH @
50%) </FONT></DIV>Spark
10
1/99 40%
with EMC (2nd best MSFT @23%)</FONT></DIV>
<DIV><FONT face=Arial size=2>P<FONT face=Arial size=2>EG
5
1/99 49%
with BBY (2nd best BGEN
35%) </FONT></FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>I've seen a number of posts stateing annual
daytradeing returns in the 28% to 50% range. It would seem to me
that useing the above method would give greater returns with far less
effort. Do any of you Realtraders have returns that match or exceed the
above?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>ADVANTAGES</FONT></DIV>
<DIV><FONT face=Arial>*only one stock to concentrate on </FONT></DIV>
<DIV><FONT face=Arial>*monitor portfolio once daily useing end of day data,
maybe 10 minutes</FONT></DIV>
<DIV><FONT face=Arial>*low transaction cost, expecially when compared to
daytradeing</FONT></DIV>
<DIV><FONT face=Arial>*obvious and simple switching signals, a straight
percentage</FONT></DIV>
<DIV><FONT face=Arial>*less anxiety wondering if your in the right stock,
you will be in the right stock of that set</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial>DISADVANTAGES</FONT></DIV>
<DIV><FONT face=Arial>*not diversified-one could use more than one
"race" with non-overlapping sets of stocks</FONT></DIV>
<DIV><FONT face=Arial>*vulnerable to gap up or down openings on
switch day-using larger cap. stocks could minimize this</FONT></DIV>
<DIV><FONT face=Arial>*fixed set of stocks-one could devise a way to
add other stocks into the set as long as it behind the leader</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> For those who have read this far,
Thanks. I would invite those of you who, like me, are trying to find that
method that makes sense and one you can live with to use or improve
on this model I've proposed. I'd love to hear from those
of you who might like this approach; even more so I'd like to hear
from those of you who might hate this approach and can see obvious
problems with it that I can't see....please stop me, before I
hurt myself.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial> Sorry about the poor
grammer and spelling I'm typeing this between patients at my real job and
have little time to proof read, but I'm sure you
get the point warts and all.</FONT></DIV>
<DIV> </DIV>
<DIV> </DIV></BODY></HTML>
</x-html>From ???@??? Mon Mar 29 05:39:09 1999
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To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Indicator for Commando
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Many moons ago I asked for info on Commando and so I get periodic updates
(ads) but I am interested in what they call Universal Commando Indicator. I
know about the Commando Mrthodology so I all want is info on the indicator
which works with TS/SuperCharts.
Is the indicator worthwhile or worthless? Does it actually give a signal or
display an alert or what? Thanks for any info or assessment?
Lynn
Ps Website is http://www.CommandoTrader.com/CommandoIndicator.html
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