Hi Len-
>>Has TA given you a winning strategy in the stock market?
TA has helped me greatly. I wouldn't buy/sell w/o it!
Combined with other things I have learned it has helped me take the emotion out of my decision-making and allow me to logically and consistently enter/exit my positions. I have tried watching real-time quotes and making real-time trading decisions. I failed miserably and was exhausted by 4pm! Too much emotion and second-guessing involved. Of course, I'm self-taught and have never had the luxury of learning at the side of a guru.
I make all my buy/sell decisions after the market closes and enter them before the market opens as buy/sell market/limit/stop orders. (I still like watching real-time quotes but I rarely buy/sell them. Been caught in too many intraday reversals.) Basically I plan the trade and trade the plan. I have a set of 20 or so stocks I follow closely (all with excellent long-term fundamentals as far as I can determine). I add new ones now and then, and I drop some, usually temporarily (e.g., CIEN and CATP) to keep the process manageable.
Usually I place a stop loss when I go long but not always immediately.
For example, with FORE @~13, I ran bare last night. As soon as a position becomes about 10% profitable I move my stops up to about breakeven. Since I usually trade between resistance levels I don't usually have to move my sell stops up. I've tried protecting profits but too many times I've been stopped out on a down move before a big up move, a favorite trick of all MMs. However, if I'm shooting for 2 resistence levels up (e.g., FORE @21), I will move my stop up to just under the first resistance level once we have closed above that level. I will not gamble away hard won gains anymore.
Recently I've started trying something new (though luckily I didn't do it with FORE), I set a daily sell limit based on the largest possible one day increase reasonably imaginable for that stock. For example, using this selling approach, I would have placed an order to sell FORE at yesterday's close (13.5) plus +2.5 points, my estimate of the largest possible one day gain and I would be out at 16. The advantage of this approach is that you can catch some nice intraday moves that often sell off partly by the close. FORE is notorious for selling off intraday gains. Very similar idea to buying with a limit buy. And, like a limit buy, you run the risk that you could get a better price at the next morning's open. But nothing is perfect and this provides a greater frequency and certainty of gains (first time the price hits your sell price it's in your pocket).
>>Can you recommend a beginner's book?
Believe it or not I don't own a book on TA, at least not western stuff. Others here can probably make suggestions. My bible is Steve Nison's Japanese Candlestick Charting Techniques. Part Two of this book, entitled, The Rule Of Multiple Technical Techniques, presents the major methods of western technical analysis in fairly brief form and illustrates how they can be used in conjunction with candlesticks. I guess that is my beginner's book for western TA. I have also read the stuff available on the internet and use various free technical charting sites.
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