Post by uncleharley on Dec 31, 2023 17:31:49 GMT
I am attempting to write this thread because of popular demand. For some perspective for those who may find something they feel is worthwhile in this thread I want to first state that the majority of my assets are in vehicles that I have no influence or control over. Social Security, a Hybrid, defined benefit, Pension Plan, & a small disability payment provide for my daily living expenses. My lifestyle is very middle class. The liquid assets that are controlled by me are about 3 or 4% of my net worth. I trade about 16% of that amount. I point that out so everyone who thinks they will find some piece of the Holy Grail here should seriously consider the qualifications of the source.
Given that, my most valuable sources of information regarding charting is the book, Encyclopedia of Chart Patterns & Stockcharts.com. The book was written by Thomas N Bulkowski and published by Wiley Publishing in 1999. I believe it is still in print. I keep a copy on my desk and refer to it frequently when trying to analyze a chart or a chart pattern. I have no favorite pattern. I do rely heavily on support/resistance levels, Fibonacci retracement levels, & volume by price levels when I am determining a point where the market may turn or stall out. The two indicators I pay the most attention to are Price and volume. Price is God, trading volume is Jesus, all others are derivatives of Price & Volume. Many people like to take surveys to measure sentiment, but Trading Volume is a much better indicator of sentiment than a host of opinions.
My top guideline come from Donchians Trading rules. "First Be on the Right side of the Market". The old adages of "The Trend is Your Friend" and "Don't Fight the Fed" tend to express that guideline in a somewhat different way. The "right" side of the market is most easily identified by a chart of the price. Whether you use daily, weekly, or monthly charts, depends your tolerance for dips or surprises in the chart. I prefer daily and weekly charts for my work. Monthly charts tend to leave out a lot of tradeable information and are too slow for my use. I use all of the popular indicators such as MACD, moving averages, Bollinger Bands, ADX, & others. For projections I use the chart patterns named Head & Shoulders and the Cup with Handle. See Stockcharts School or Bulkowskis book for instructions on how to use them.
My Portfolio is concentrated with 6 or 7 positions. I have never felt a need for more than 10 positions simply because I am not aware of any occasion when I had more than 10 good ideas at one time.
Leverage is the best tool for increasing returns. That is why my portfolio is made primarily up of leveraged CEFs and leveraged ETFs. Managing risk is much more appealing to me than attempting to eliminate it. I strongly believe that the "fear" of loss is a much stronger motivator than the opportunity for "gain". Consequently, I have spent much time working on controlling my fears and inhibitions. Set aside your dreams and fears when making a buy, sell, or hold decision. Market timing is an effective tool for managing risk.
Given that, my most valuable sources of information regarding charting is the book, Encyclopedia of Chart Patterns & Stockcharts.com. The book was written by Thomas N Bulkowski and published by Wiley Publishing in 1999. I believe it is still in print. I keep a copy on my desk and refer to it frequently when trying to analyze a chart or a chart pattern. I have no favorite pattern. I do rely heavily on support/resistance levels, Fibonacci retracement levels, & volume by price levels when I am determining a point where the market may turn or stall out. The two indicators I pay the most attention to are Price and volume. Price is God, trading volume is Jesus, all others are derivatives of Price & Volume. Many people like to take surveys to measure sentiment, but Trading Volume is a much better indicator of sentiment than a host of opinions.
My top guideline come from Donchians Trading rules. "First Be on the Right side of the Market". The old adages of "The Trend is Your Friend" and "Don't Fight the Fed" tend to express that guideline in a somewhat different way. The "right" side of the market is most easily identified by a chart of the price. Whether you use daily, weekly, or monthly charts, depends your tolerance for dips or surprises in the chart. I prefer daily and weekly charts for my work. Monthly charts tend to leave out a lot of tradeable information and are too slow for my use. I use all of the popular indicators such as MACD, moving averages, Bollinger Bands, ADX, & others. For projections I use the chart patterns named Head & Shoulders and the Cup with Handle. See Stockcharts School or Bulkowskis book for instructions on how to use them.
My Portfolio is concentrated with 6 or 7 positions. I have never felt a need for more than 10 positions simply because I am not aware of any occasion when I had more than 10 good ideas at one time.
Leverage is the best tool for increasing returns. That is why my portfolio is made primarily up of leveraged CEFs and leveraged ETFs. Managing risk is much more appealing to me than attempting to eliminate it. I strongly believe that the "fear" of loss is a much stronger motivator than the opportunity for "gain". Consequently, I have spent much time working on controlling my fears and inhibitions. Set aside your dreams and fears when making a buy, sell, or hold decision. Market timing is an effective tool for managing risk.
