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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?

To: CommanderCricket who wrote (11901)	4/5/2007 10:36:59 AM
From: sixty2nds	Respond to of 13449

CC I learned much from Stan. Have you read The Market Wizards?The 1st thing I modified since reading Wizards is position size. Most, if not all, The Wizards state they start with small positions. Something they each learned the hard way. It is mindbending how smaller position size changes the process. The process simplified when I reduced from a "gambler's" percentage to 7.5% initial position size. I never suspected I could manage 20-30 positions at once. My current experiment with 3.75% size is proving to me that it can be done successfully AND without stress. I could not agree more with your statement "Buy and Hold doesn't work long term" VBG. Here's to better trading with Thanks to Dabum3

To: CommanderCricket who wrote (11901)	4/5/2007 1:38:25 PM
From: chowder	Read Replies (1) \| Respond to of 13449

>>> Stan uses a 30 dma in his examples and I didn't find any references to other moving averages (20dma, 50dma or 200dma) in the book. Noticed you use 20dma and 40dma. Any reasons for your preference? <<< Stan uses the 30 "WEEK" moving average. He uses this because he wants to be sure others are buying in when the stock is in an uptrend. My guess is he knows how people like to cheat and get in early. He wants to make sure there's no cheating and the 30 week moving average insures that. He wants you in above the 30 WEEK moving average and out below it. I use the 40 WEEK moving average because it is the same as a 200 day moving average. Institutional money uses the 200 day (40 week) moving average as their guide because nearly all of their trades are longer term. I use the 20 WEEK (100 day) moving average along with the 40 WEEK because it's a good intermediate term indicator. Most of my trades are intermediate to long term, when not swing trading. By using both the 20 WEEK and 40 WEEK on the same chart, I can gauge the "QUALITY" of the trend. When I see a comfortable distance between the two, I have a strong uptrend. A strong uptrend usually presents very good entry set ups when price consolidates on profit taking. The better the quality of the trend, the better the set up for the trend to continue higher. Using two moving averages with a 2 to 1 ratio presents a very nice "QUALITY" tool. Now, Stan also uses the 30 WEEK moving average as a trigger to take profits. If price drops below the 30 WEEK moving average, you sell all of your position. I prefer to sell 1/2 below the 20 WEEK moving average and the remaining 1/2 below the 40 WEEK moving average. GT shows a nice balance between the moving averages and a nice balance between Stan's and my sell strategies.