Themes to look for on a stock chart

[VikingsGuy]

The fact that the hooker and blow comment got more traction here than the advice I gave gives me some idea of my standing in this conversation lol.

The OP asked about patterns on a stock chart, which is a technical question, buts only gets advice on fundamentals along with being told if anybody mentions technical considerations run... have a good one gents.

It’s a bit like if a guy posts, “I haven’t elk hunted before and don’t have much range time developing rifle proficiency but the whole thing is interesting to me - I read somewhere a guy took over 100 elephants with his .257 Roberts so I think a .223Rem should be plenty for elk with good shot placement - my question for you guys is what powder will get me the best muzzle velocity out of that cartridge and what barrel twist rate to stabilize longer than typical bullets in .223?”

Sure, there are technical questions that can be answered - and in theory with great shot placement a .223 can kill an elk, but it just seems a lot of other advice needs to be offered before we get to barrel twist

The newer someone is to something, the less they need technical answers and the more general direction is the place to start. Also, if OP already has the skills to succeed at day trading a hunting forum is not the place to start for deep technical answers to such questions.

 

[VikingsGuy]

Thanks for the follow up questions. I have a pension, 401k, 401a, cash savings and fixed assets. I am 17 years from retirement, but think I am building a adequate plan for retirement. The funds that I have saved for this are money that I budgeted into my monthly household budget and have saved up, so they really don’t effect me if things go south or I find that I am terrible at this.
My vision is to invest 80% of portfolio funds for at least 3 years and measure how they are doing at that time. If things are going well I am happy to leave them longer. The other 20% I would like to use more with a trading mindset to make it more interesting and have some short term action to occupy my attention while the other money is playing the long game.
I typically have extra money to add every month to this formula.
My idea of a successful outcome would be to have fun, learn a lot, and try to average 10% or higher earnings over five years. If I decide to sell at some point and use the cash to buy a piece of property or something then at least I was able to enjoy the experience while it was accumulating rather than have it passively sitting in a bank or bond account.
Thanks again for your interest and advice

Sounds like you are on a solid path.

As for small-time day trading, it is like going to vegas - just enough short-term winners to hook others but almost all lose over time (but we don't talk about them). Just send me your funds now and I will send you back half in 5 years and you will be better off

However, if you want to be intellectually active in your investments without the turnover/crapshoot of day trading, I would look at industries or industry segments you think will show positive earnings growth, innovation leaps, beneficiaries of government regulation shifts, demographics shifts or productivity gains in the coming 3-7 years. Then I would pick the one or two companies who appear to be best suited to riding that wave. I would do that for a few segments. I would then toss out any name on the list that seems overheated at the moment. I would spread my bets and watch. Meanwhile, I would be looking at other segments with a similar eye. If I find one that looks much better than what I already picked I would sell some flat-losing positions and move a portion to the new segment. I would also track the winners and take 50% of my gains off the table after any big run up (but ideally after holding the stock for at least a year). I would also go back at times and challenge my assumptions behind the "winning" segments and players I picked at the start and see if circumstances have changed enough to cause me to pull funds out of those bets to be re-placed somewhere new. As an intellectual and engaged process, this is more interesting than the day trading games - you are actually learning about a wide range of industries and govt policy making while planning your financial path.

In general, I would not try to chase metrics like trading volume, or a whole host of math gimmicks, etc (The automated microsecond quant trading systems squeeze all the value out of such things before the little guy can make any consistent positive move).

 

[Cheesehead]

The fact that the hooker and blow comment got more traction here than the advice I gave gives me some idea of my standing in this conversation lol.

The OP asked about patterns on a stock chart, which is a technical question, buts only gets advice on fundamentals along with being told if anybody mentions technical considerations run... have a good one gents.

@Shangobango, you make a fair point that a lot of feedback was contrary to the original ask.
I think the responses are given in the spirit of care. If you’re wanting to get to a lake 5 miles away but are 20 degrees off course, the best advice is to change your direction vs how to run faster.
Man, if technical trading has served you well, I’d love to hear about it (might pm you), but in general I think the Citadels and other high frequency folks have so many more tools that it is knives in gunfight territory.
From my (admittedly non comprehensive) perspective, folks should follow the boglehead model, and if they must pick single stocks, solid understanding of the underlying value of a company is key, and what happened in the last few weeks / months to the ticker is noise.
But again, appreciate alternative views. Peace.

 

[Shangobango]

@Shangobango, you make a fair point that a lot of feedback was contrary to the original ask.
I think the responses are given in the spirit of care. If you’re wanting to get to a lake 5 miles away but are 20 degrees off course, the best advice is to change your direction vs how to run faster.
Man, if technical trading has served you well, I’d love to hear about it (might pm you), but in general I think the Citadels and other high frequency folks have so many more tools that it is knives in gunfight territory.
From my (admittedly non comprehensive) perspective, folks should follow the boglehead model, and if they must pick single stocks, solid understanding of the underlying value of a company is key, and what happened in the last few weeks / months to the ticker is noise.
But again, appreciate alternative views. Peace.

It’s a bit like if a guy posts, “I haven’t elk hunted before and don’t have much range time developing rifle proficiency but the whole thing is interesting to me - I read somewhere a guy took over 100 elephants with his .257 Roberts so I think a .223Rem should be plenty for elk with good shot placement - my question for you guys is what powder will get me the best muzzle velocity out of that cartridge and what barrel twist rate to stabilize longer than typical bullets in .223?”

Sure, there are technical questions that can be answered - and in theory with great shot placement a .223 can kill an elk, but it just seems a lot of other advice needs to be offered before we get to barrel twist

The newer someone is to something, the less they need technical answers and the more general direction is the place to start. Also, if OP already has the skills to succeed at day trading a hunting forum is not the place to start for deep technical answers to such questions.

Fair enough.

I have never been a " day trader" per se, and would never suggest that strategy honestly, when we are talking about stocks. The technical indicators are just another tool in the tool box when choosing single stocks, especially if you are trying to make short term, ( weeks or months), plays.

The commodities market is a whole other animal. Most trades there only live a few weeks max. I have pretty much moved my commodities money into commodities ETF's, once again because I just don't have time to watch the market well enough to buy and sell contracts.

Like I said in my original post, unless a person has the time to burn, find some good ETF's, trade the S&P 500 index, and get into some proven growth type mutual funds, and you will probably fare better in the long run.

 

[SAJ-99]

It seems to me that everyone is a little bit right. There is a saying alone the lines of "Fundamentals tell you what to buy, technicals tell you when to buy it". Technicals matter because people follow them. Simple RSIs are surprisingly predictive when combined with other indicators. What you are trying to measure is money flow, and price is a reflection of that. So technicals matter. You have to determine what kind of game you want to play and the time frame over which you play it when dealing with the market. Citadel and HFTs don't use technicals. They are scalping fractions of cent or collecting bid-ask spreads for providing liquidity. Traditional active investment funds are research the fundamentals of the businesses and buying the companies they think are improving and holding for years. Others (mostly the group on this board) are looking at prices and determining what and when to buy.We don't have a hundred servers running 24/7 and trying to jump in front of other traders by microseconds and we don't have the resources to research the entire business of a company. All the players make a market deep and liquid.

If you don't think these technical type of traders have an impact, see TSLA, AMC, GME, BB, and a plethora of other stocks. Momentum (a technical indicator) matters. The indicators are slightly different for an index vs an individual stock, but they can definitely help.

What we are seeing the last few of years is that pros are trading big blocks on the dark platforms (DIX), public market volumes are dropping, and options and market maker delta/vega/gamma hedging are becoming a bigger driver of the market prices. The younger crowd likes to say "Flows over pros". In many ways, they are right.

 

[VikingsGuy]

The final word .

 

[nimrod_gn]

I started “managing” a portfolio about a year ago. I started out by listening to podcasts, reading articles and relying on what others were saying about good investments.
I am trying to learn more about how to read stock charts and look for themes or trends to try and have my own opinions about stocks that have strong potential. Can anyone offer advice on themes to look for or resources to read to help me develop a better understanding?
Thanks!

Why is this stuff being posted on a hunting forum???

 

[BearFoot]

Why is this stuff being posted on a hunting forum???

Perhaps to fund outdoor adventures and/or retirement incomes.
Their are people that do very, very, well trading markets.

 

[VikingsGuy]

A 15-20 hour webcourse from a NYU finance guru for those who want an overview of various investment approaches:

 

[longbow51]

Anyone play around with the Chinese Candlesticks? I read a book about this. Never had the time to play the market and just bought index funds, and later, dividend funds. Still, the technical stuff appeals to the geek side of me.

 

[Shangobango]

Anyone play around with the Chinese Candlesticks? I read a book about this. Never had the time to play the market and just bought index funds, and later, dividend funds. Still, the technical stuff appeals to the geek side of me.

Not me. I tried to keep my technical trading pretty basic, mostly just taking into account chart patterns and metrics that can help identify overbought and oversold conditions.

 

[SAJ-99]

Anyone play around with the Chinese Candlesticks? I read a book about this. Never had the time to play the market and just bought index funds, and later, dividend funds. Still, the technical stuff appeals to the geek side of me.

Do you mean Japanese? I have never heard of a Chinese candlestick. so I guess my answer is no

 

[Devilscrown]

Why is this stuff being posted on a hunting forum???

Well, I guess because it is a money finance section. There are other sections if you aren’t interested.