Market Analysis Help

[cpatte7372]

Hello,

I recently posted a thread showing my results after a day of paper trading. I appeared to be doing quite well, however a very good point was made by soylent. He basically said that stocks tend to move with the market. I would therefore like to learn how to read the market in enough detail so as to know how to make a decent assessment of its general direction.

I have attached an image of the four main indexes. Can someone please take a look and give me guidance how they would analyze todays market activity?

I guess I could have just continued with my existing post on 'How Am I Doing'? Soylent, if you're around I would also appreciate your comments as well.

Cheers

Carlton

[soylent]

Hey Carlton --

There is general long-term market direction (i.e. in a channel / going up / staying above the 50/100/200) and their is short-term direction (the impulse w/in that general direction).

So, I look @ two things:
LONG TERM (bullish):
a) Price > 50 > 100 > 200 = Generally UP

SHORT TERM:
a) Price > 4-day (uptrend)
b) Price < 4-day (downtrend)

After all that is said and done, I look at $TRINQ -- an advance/decline ratio measuring # of advancing stocks vs. # of declining stocks divided by volume of Advance/Decline.

Play w/ that for a bit. If you've found a good 1-3 day setup, look for TRINQ coming off an oversold (TRINQ>1.2, when it comes under that) condition in a BULL market that crosses above the 4-day price moving average.

You'll have to play w/ it all to get a good feel for it but this is what I use.

However, I feel like the only bull around right now -- my signals are saying we are going UP. BUT w/ the # of bad trades I made in the last two weeks, I'm definitely not the one to listen to Carlton! (NOTE: Never listen to anyone -- listening to others w/o doing my own research has cost me more money than any other mistake I've made).

One MORE thing: The more 'stuff' you look @ the more it blows your overall system. If you've found something that works with fewer indicators, you may be better off not exploring more. I definitely went through a stage of 'winning' because I didn't know anything to 'losing' because I knew too much but not enough to 'staying out' because I could see a reason to not take ANY trades (i.e. found good/bad to all).

Right now, I'm still trying to decide what works best for me. I'm mostly playing indexes w/ leverage. For me, that works great and I've developed a lot of great indicators that tell me when to buy. I like indexes with 2-3 week horizons because I can see an immediate result to my selection. I've had days where I made 100% followed by a 75% loss. Obviously, I've got an issue w/ 'selling' at the right time! And, I've had days where I've lost 50% and made 200% the next... Leverage... Don't play w/ it until you can afford to lose. I also like Options because as 'Livermore' said, "Bucket shops were good because they limit my loss". (one thing: learn about OPTIONS but please be careful... I've lost many, many thousands in my earlier days dinking w/ them... But, once you learn to leverage the risk/reward, and realize it's the seller that is the 'sucker' because they can't close the position on you vs. ??? your reward -- they (options) are a beautiful thing. And, never, ever, ever buy an option out-of-the-money -- otherwise you're the sucker)

Well -- enough digression...

I see the MARKET has recovered this morning (I decided to write this long post because I didn't want to lose faith and close my position early watching the gap down!)

And, at last I say, "We are going UP! UP I tell you!"

-c

[cpatte7372]

Soylent,

I really like reading your posts - and the posts from others

They always give me a reality check. They also bring to my attention things I have never thought of but will now consider in the future.

I'm not very good at writing long emails, because at the moment I don't really know how to converse professionally in financial terms. However, I keep a scrap book of some of those posts that I believe will help guide me towards being a better trader and this post is certainly going to be added.


Thanks again mate.

Cheers

Carlton

[cpatte7372]

Soylent,

Just one quick question.

You mentioned that you would wait until $TRINQ was coming off of >1.20 in oversold condition. Should one use the reverse when exiting a trade. For example, lets say I've placed a trade when the $TRIN was coming off of >1.20 and it now stands at, say <0.5, would that be an ideal time to exit and take profits?

Cheers

Carlton

[soylent]

Carlton --

TRINQ: The answer is 'probably'.

If TRINQ gets greater than .5, you've usually got a short-term euphoria that will be corrected....

-c

[cpatte7372]

Soylent,

Thanks mate.

Carlton

[cpatte7372]

I'm actually learning how to trade from this forum.

Thanks guys

Carlton