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Strategies & Market Trends : Swingtrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: William W. Dwyer, Jr. who wrote (7)	10/3/1999 10:42:00 PM
From: Brandon	Respond to of 551

Hi Bill, Your thoughts on money management are right-on in my opinion. Better to be a good money manager and an average trader than the other way around. I could not agree more. I think if we got a thread going at some point that only dealt with proper money management it would be very helpful. Along those lines, do you incorporate any concern with market timing in your analysis for picking stocks? That is, do you require an "up" market timing signal (perhaps from some software) in order for you to initiate a long position, or, conversely, do you require a market "down" signal in order to open a short position? In general I do not concern my self an awful lot with market timing. You will always find strong or weak stocks doing there own thing regardless of what the market is doing. However, if a stock is in a sector and that sector chart looks very unfavorable I will always error on the side of caution, letting that setup pass. I do require up or down signals in an individual stock, but not the market as a whole. One thing that is important to pay close attention to however is the market type we are in for traders. There are markets in which a trader can easily make a good deal of money, and markets in which traders can lose a lot. If we are not in a traders market it is best to reduce your risk to the market. In extreme cases of market uncertainty, such as we are in now, I will reduce my risk exposure to 0.25%. Do you get involved with sector and industry group analysis and try to make your picks in specific sectors and groups that are under accumulation or current heavy momentum? Or, do you just select a stock that meets your technical criteria, regardless of it's sector or group? I am always looking at sectors and stocks within the sector as it is an ideal situation to find a good setup in a strong sector. One setup that I love to find is the stock that consolidated when the sector it is in went down for 3 to 5 days. If this sector pullback has brought the group to some area of support, but this one stock has held up, we have of course found a very strong stock. This is a situation which Toni or I will discuss more in depth as we gain confidence that the majority of people reading the thread understand the basics. I will take a setup that meets my technical criteria with the above mentioned points of caution regarding a sector. What about the general and fundamental criteria for the stocks from which you make your picks? Do you use fundamental scans first to get a databasefrom which to run technical scans, for instance? Also, will your stock picks be primarily large caps, mid-caps, small caps, tech stocks, certain sectors/groups, Dow-30, S&P500, N-100, Nasdaq only? Or, will you be looking at stocks from all of these areas? About 90% of what we do is technically based, the other 10% on fundamentals. This is mostly regarding news pending type situations in which we will want to avoid a stock. We look at all stocks that have an average daily volume above 250,0000. This does include all the stocks in the major indexes, that being the Dow Industrial, Transports, Utilities. The S&P500 and S&P100 as well as the Nasdaq 100. Finally, do you use any specific technical analysis software for your picks and, if so, will you be sharing that info with us so that we can follow along with your reasoning and learn from the process while taking on the trades you recommend that agree with our own analysis? I use TC2000 for scanning purposes. I do have a few scans programmed but prefer to manually scan as this allows us to keep abreast of any new patterns that are developing in the market, avoiding complexity. I hope these answer prove to be useful to you. Thanks for your interest in this thread, I look forward to your continued contributions. Brandon www.mtrader.com/swingtrade