AAPL? How to trade/invest? Message Board

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Technology Stocks : AAPL? How to trade/invest?

AAPL 247.97

-0.2%

Jan 23 9:30 AM EST

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To: xu, b. who wrote (26)	4/18/1996 11:58:00 AM
From: Jaime H. Ayalde	of 162

Bernie, I think the most important aspect of trading and placing positions is understanding the concept of Volatility. There are many ways to analyze this but in my opinion the simplest way is to look at the true range for a certain number of days. Apple right now has a very low volatility compared to its historical volatility. A change in direction can be seen if the price constantly trades away from its normal average line. (BAND) To make the point, 24.625 is where the normal low Band line is. If you recall, I bot AAPL at 26, at that time my stop was 24.125. But two things have happened, TIME and PRICE have moved forward. The stop point or reversal point is really just my moving average using volatility as a factor for RISK. An oposite example of this would be MACR. The weekly range is over $10. I looked today and the daily range is 5.375. By taking a position on MACR (macromedia) your RISK would be a multiple of 5.375. (very high) It is so important to understand the RISK of a Stock before investing. I see so many "getting it right" on their first trade (being lucky) that they think they are really smart. In reality what happened is that through their lack of understanding they lacked fear and took incredible risks to obtain that profit. Unless they take time to understand they will ultimately give it back. (usually more) Many examples in individuals trading futures & options. Back to making money using technical trading in APPL. The point I would like to get across is that it doesn't matter what you trade as long as you understand what you are doing and have some kind of plan. I have traded from sugar and cotton to Bonds and Currencies. It doesn't matter. Your returns are associated to the risks you take. I like AAPL right now because you are able to trade with a very low volatility. Low RISK. To me RISK is also related to the time I have to make a decision that I am wrong. I know that my LONG on APPL will be in jeopardy if it settles below 24.625. In MACR the time & distance to prove myself wrong is prohibitive. Very high volatility. On the SOX. The TREND is LONG. On top of this the wave signal has given me a BUY. This will be supportive to all TECH stocks. Jaime Understanding this statement by Jesse Livermore gave me my direction in trading many years ago. "I go long or short as close as I can to the danger point, and if it becomes real I close out and take a small loss" Jesse Livermore (1877 - 1940 )

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