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Strategies & Market Trends : Technical Analysis - Beginners

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To: Chris G. who wrote (7370)	12/31/1997 10:18:00 AM
From: David R. Evans	Read Replies (1) of 12039

Hello Chris, Richard has given you good advice. Anytime you start having problems trading or your results just do not seem right, the best thing you can do is simplify. Trading is not as complicated as most people make it out to be. It's a battle between you and yourself. We find an indicator like Dahl that gives us GREAT results and what do we do with it? We change the hell out of it. We look at the screen and say, "well, that's nice but I just couldn't stay with a stock THAT LONG!" So we get in there and add this indicator and take away that indicator and change this length and change that length and before you know it we lose track of where we are and what it was we wanted to do. That's when you need to simplify.. Go back to the EMA's that looked so great on the screens. Dust off your "CORE SYSTEM" that you loved so much and made you so much money. Revisit your time frames and make sure they still suit your mentality. I've found that in most cases it's the time frames that get people in trouble. People are making money longer term BUT they decide they just can't sit back without trading. They must trade shorter term so they start changing all their indicators ( in real time) and before you know it they are losing money. That's when you need to simplify.. Go back to your favorite stock and just look at the chart. Where is it that you want to get in and out? Put Dahl on it and really question the need for anything else. If you still need anything else start with Moving Averages and little by little add indicators that coincide with the buy and sells you want. Mix longer term with shorter term BUT realize why you are doing it. You are not looking for buy signals from ALL your indicators. You get the buy signals from the shorter term indicators and DIRECTION from the longer term ones. Why look at longer term when you want to trade shorter term??? Because the TREND IS YOUR FRIEND!!!!!!!!! The easiest way to make shorter term money is to ride a LONGER term trend a short distance.. The other important thing to do when your trading is not what it should be is to BACK OFF.. DO NOT jump into the market with real money unless you have a TRUSTED SYSTEM by your side. Never buy a stock unless you know when you will be selling it. The worst thing you can do is jump in without thinking. You will find yourself turning winning trades into losing trades with great regularity.. Why? Because you do not know when you are selling. Please note that when I say you must know when you are going to sell I do not mean a date or a price necessarily. You could go in and say that you will sell if the stock falls to 10 or raises to 20 and that's fine. I do not like to put real numbers on my sells because I like to let the stock tell me when to sell. I use a series of indicators to let me know when it's time to get out. This is because I like to ride the train as far as it will go. Now that I've rambled on and probably bored most of the people out there I'll end this chapter of the lesson. I owe you more information Chris and I'll start working on it right now. Boy it's nice to be home in front of the computer. I'll get back to you with a rundown on IBM which just gave me a StochRSI (14) hit. Dave Evans

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