Tuesday, January 6, 2009

Time to Solo

My friend "Pete" is comfortable enough with the SA software now, and He wants to go it alone. I'll still be checking in on him from time to time, but I have personally taught him enough to get started.

Heck, the software is practically fool-proof, even for "Pete" (just kidding buddy). He is still amazed at what his 25,000 has turned into. I was actually thrilled, and at the same time terrified, to play with someone else's money, but all worked out fine. I will still miss the fun of it.

However, I need to get back to basics anyway and write some more tips and give more insight into my take on trading. As always, I just want all of you to make the most out of Stock Assault 2.0 and everything it has to offer. I enjoy the feedback I get, and I learn a lot from all of you as well.

I believe the market is trying to return to some sense of normalcy with the expected bumps along the way. I still think any oil-related signals you get should be pounced on, as the black gold makes a comeback. We'll see what each day brings and makes the most of what we get.

Have a good one,
Roger

24 comments:

  1. Roger,
    Congratulations on your results. I very much enjoyed following your posts. Will you keep posting on the blog? I was wondering if you knew what stock dimensions the AI engine evaluated to determine its stock picks. I am struggling without any documentation.
    Jennifer

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  2. Roger, Thanks for the posts. I am new to trading and the posts have helped my technical analysis out. Thanks to you now I know a little about P/E, %k, Volume vs. Moving average, PSAR, RSI, MACD, Resistance, Support, and book value. I am sure there is more but I will stop there. Now I have to get better at fundamental analysis. I have to figure out when is bad news bad enough not to buy the stock. I saw you purchased MO even though I thought it was bad news. I also purchased it. Now I have purchased DOW and what a roller coaster. When is bad news really bad news? Then you compound it with the market today, wow. I assume ti is good news everything else went down and DOW held its own. Thanks again, Brian

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  3. Hi Roger, Do you use the Std 2.0 version or Diamond version ?

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  4. @Jennifer Yes, I will still be posting. I don't specifically know the algorithm(s)that the AI uses, although I am familiar with some parts of the AI engine itself. What are you having trouble with?

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  5. @Brian
    To me bad news is any news that hurts the stock price, but that is always after the fact. Generally, any news that has to do with lowered earnings projections, a large capital expenditure(hurts at least short term), are the types of news I consider bad. I've seen bad news come out and the stock price go up. It is really screwy sometimes.

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  6. @Anonymous
    I use the Diamond version

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  7. Hi Roger,
    Thanks so much for this blog. On Nov.12 in "Gauge Your Entries and Set Stops" you mention that before buying an equity you go to Yahoo Finance to check futures action. What index do you look at to determine market action? Thanks,
    Jerry

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  8. @Jerry
    I went back and read that blog, and I can't for the life of me remember what I was thinking when I wrote that, since I never use futures for anything. I must have been thinking of something else when I wrote it, and didn't know how to express it. I might have been talking about call options and the volume of each particular one, but I'm not sure. Sorry about that.

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  9. Hi roger,
    I was just trying to understand what elements of the stock are evaluated to understand why one selection is proposed versus another, is it historical price, eps surprises, volumes, option volumes performance vs industry benchmark - there are lots of people and systems that make recommendations and I am just trying to understand why stock assault is making the suggestions it is.
    Thx
    Jennifer

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  10. Hey Roger, regarding your quote about Yahoo finance and futures: I'm pretty sure you were talking about going to Yahoo Finance before the market opens and on the main page checking what the overall market futures are. This is a good way to see how the futures forecast the market will go. It's always good to confirm that in the opening 1/2 hour to hour to make sure, but it's a good indicator to take note of. I like to go to http://money.cnn.com/data/premarket/ for a quick look to see where the premarket is heading. Cnn.com also has an after hours market. This is all to check on how the indexes are forecasting based on those who trade futures. Also, Roger, have you checked out the 3x direxion etfs? They move fast and are extremely volatile so you have to be certain of what you're doing and not just jump on, but I know you've used some short Russell 2000 etfs (thanks for the tip on that, it was actually your advice that first led me to ETF's and the Russell 2000) and financial etfs, so I thought I'd point them out. They can make for a good trade if you've got high probability and have done your research. Well, thanks again for all the insights. Looking forward to the journey ahead!

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  11. @Keith
    You are exactly right. I thoght about it later and realized that it was the futures lisred on the Yahoo Finance home page. I'm going to check out the sights you mentioned. also, I have not checked out the direxion ETF's.Thanks for that tip, I am going to do some research on their movement. There is a trade off in in profit and volatility, and I'm researching some AI related pattern shifts in some smaller cap stocks right now....higher returns with higher risks. Thanks for the info.

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  12. @jc
    I wish I could be of more insight, but I am not privy to the dynamics of the AI engine used. I do know that it is not some algorithm that requires input adjustment, but a true engine that mimics thought and reason. I'm sure that it is seeing price movement, but I do not know how it puts all the info together and generates picks. I was actually impressed by the ability to get in a trend before it actually started, unlike many services that hit a trade after several up-days of potential profit that went lost or unrealized.

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  13. @Kieth
    I just did a double take and saw the 3X before direxion. Didn't know such ETF's existed ! Wow, I'm definitely going to check those out !

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  14. Hi Roger

    Thank you for the very excellent insight and blog regarding SA2.0. I'm new to investments and have subscribed to your blog to learn a little (a lot!) and hopefully do some successful trading myself. I'm certinaly planning on getting SA and seeing how I fare. I'm interest in shares has recently increased owing ot the fact that the company I work for runs a share schemes and this year employees were priveleaged ot receive 70 shares in the company IHS. Yesterday our company yearly report was published and the shares made a huge gain of from around $38 to $45 in a day. Fantastic news! This only further went to when my interest in investments and so I stumbled upon your blog.

    As mentioned, I plan to invest in a copy of SA, but being new to the whole idea, I was wondering if you could give me some adice - I don't have an account with an online sharebroker - would you recommed one to use to start with? Obviously one with low fees/commission would be ideal if I'm going to be doing regualr trading with SA's recommendations.... any advice or a pointer in the right direction would be very appreciated.

    Keep up the fantastic work and all the best!

    Raf

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  15. Roger,

    What a week for SA. I wish it had picked more reverse ETFs as they have been making a killer this week.

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  16. Roger,
    I'm not sure how many stocks you are buying but do you have any advice on splitting a trading account so that the results are not reliant on 1 or 2 stocks. I am opening a $10K account with diamond picks and am trying to decide how to divide the account. I don't want to put all my eggs in one basket but don't want to have to watch numerous stocks and pay many commissions. I'm thinking about a max. of 4 stocks with 25% of the account to each stock. I'd like to hear your take on this. Thanks so much,
    Jerry

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  17. @Jerry
    You are doing exactly the right thing. With 10K I would go with four. I tend to do things that I wouldn't advise others to do because I have narrowed my risks in other ways, but for the typical investor I would recommend just what you are doing.

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  18. Roger,

    What would you suggest as a stop loss? If you are going to trade $10k and purchase 4 stocks and put 25% of your portfolio in each one... you can't really afford to lose 5%+ or you won't off set the gains.

    Any suggestions in this market for a % or a trailing $ amount?

    At this point, my position size is risking only 2% of my entire portfolio on any single trade and then 5% of that.

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  19. Hi Roger,
    There have been 7-10 posts the last few days and I wondered how best to evaluate/prioritize the results when you get so many and 2 how to select from the 30 or so from the last few days when the market turns back into positive direction - just curious and appreciative if you would share your opinions.
    Thanks so much
    Jennifer

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  20. @Jennifer
    You can read my prior posts to see the things I look at when sorting through miltiple picks. I like to do technical analysis to sort through them. Some times picks are triggered by a sudden drop in share price, so you need to check the news on that stock to see if something bad has recently happened so that you can wait for it to bottom. Otherwise, check the %K of slow Stochastics on each one, and see which are the most oversold(below 20) as well as the news on those also. This would be a good way to start. The market is tough to get in right now, with the exception of some inverse ETF's. Picks don't have to be traded immediately, but are more likely to perform when the market turns positive. Hope you do well!

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  21. @Raf
    Good to have you on board. IHS made an excellent move on better than expected earnings. Congrats ! As far as a broker is concerned, any good discount broker will do just fine, such as Scottrade or Ameritrade. I personally use Scottrade. It is the only broker I have ever used. Have a good one.

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  22. Roger, I've been using your method to analyze stocks lately to the best of my ability. I have mainly concentrated on the A picks. As far as I can see there have been no stocks the last 2 weeks that have met all the parameters. I have found many with the right stochastics and RSI but the PSAR line never gets under the stock long enough to call it a trend. Am I right about this? It seems that no stock is really going up. Being new I went ahead and purchased some anyway, they were close but no cigar. From now on I am going to be more patient and not purchase one till the time is right. Is the stock market always like this or is this just a really bad time. The only stock going up seems to be the reverse ETF's and SA does'nt pick those very often and I don't know enough about them to pick on my own. Hope you keep posting I really appreciate your comments. You have been right on with your advise. Thanks

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  23. Hi,
    I have just bought SA and I am very curious to have the first picks after a while. Then I will apply some technical analysis to filter and try to trade profitable on paper (at the beggining). Roger, please, go on with your blog to share your thoughts.
    Richard

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  24. @Brian
    Today should be a good day for the market. I wouldn't worry too much about parabilic SAR. It's more of an exit tool. The market is going to bounce back and forth between a DJI of 8000 to 9000 until it breaks through that top resistance. It's not always like this. We are experiencing the recovery of a crashed market, and we don't see those very often.

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