btw, what technical methods do you employ for trading ... more along the lines of classical Edwards & Magee?
My apologies for taking so long in answering your question.... I was out.
First a disclosure:
I am certainly NOT qualified to give advice, what I express is only my opinion, and I find that one is constantly learning all the time.
From the T/A point of view (strictly speaking)
Message 6861223
Message 7870593
However, I try to use a "system" with three elements:
1. Risk Definition. (Stock Universe, (or pool), Selection), mainly fundamentals and common sense. i.e. "weeding out"
2. Technical Analysis (timing, "when and in which direction") specific techniques, i.e. DMI, ADX line, Japanese Candles, MACD, support/resistance lines, a little Fibonacci.... and money management, i.e. discipline when trade goes against me... get out !!
3. Crowd Behavior/Mass Psychology... (definition of the optimum environment). how the following subjects relate to the markets: study of psychology of masses, market history, world events, political lies, real life soap operas... i.e. devaluations, country crisis, (I love them).... madness, irrational behavior, Christmas ghosts, blood on the streets, fear......
Currently working on adding the dimension of "Options", (which I guess this is part of T/A), I also plan to add some studies on "Cycles" and "market profile"
_______________________
These are the books I have read and use as continuous reference and refresher are as follows:
* Technical Analysis Explained by Martin Pring.
* The Futures Games by Richard Tweles and Frank Jones.
* Technical Analysis from A to Z by Steven Achilles (of Metastock fame)
* Volume Cycles in the Stock Market by Richard Arms, (of the Arms Index, fame) This book relates to Volume as the main focus to trade. I did not relate very well to this book though.
* Trading for a Living by Dr. Alexander Elder. (I know the Chicken does not like Psychiatrists, (nor I), but I do like this book, and above all, this book gave me the cue to what I believe to be an important aspect to success in trading.
* Why Most Investors are Mostly Wrong Most of the Time by William Scheinman. (This book I read a long time ago, and it is time for me to read it again).
* Point & Figure Charting By Tom Dorsey (The local Supremo here), I just started reading this book, as only recently became interested in P & F.
A number of other investment related books, and study of history, and risk, Value investment and the like.
Recently, I became interested in Options, (6-8 months), I have a couple of options books, nothing special.... currently I am reading a small book called "Sure Thing Options Trading"
Yes, I know, I must read the Mcmillan book on Options.... I plan on doing so. plus there is a book by the authors you mentioned, Edwards and Magee, in reading the reports on this book, I must get it as well.
I am relatively new to technical analysis, but I have become very interested in it. The best I like about this is that it takes the emotion out of trading.
The cooler headed attitude, (as far as trading is concerned), I have been able to achieve, the success has all of a sudden begun to show... coincidence ? who knows.... but I do not think so.
Both on the knockdown when the market puts a stock under pressure and on the exurberant retraceup. The extremes in emotions exacerbates the natural volatility and make the prems very rich.
Don't you love those premiums ?
It reduces the risk, (not to mention the entry cost of your investment).
I have thought of naked calls..... but they can be quite risky... Only under a very favorable conditions... I prefer covered calls.... they are warm and fuzzy....
I put all of the above in a big pot, stir it and if I do not get confused.... I pull the trigger... |
