Crimsonarcher said:
Hi,
Can you let me know which are good indicators for buying and selling on charts?
People talk about moving average or MCAD ossillators, but somehow by the time you are able to time these, you would have lost a lot of you gains.
So what inidicators (individually or in combination) works reasonably well?
I recommend you to read Van Tharp's book, 'Trade Your Way to Financial Freedom'. This book has various systems to choose from. Or you can use Elder's Tripple Screen system. Any system you develop should give you:
1. Setup Criteria
2. Once the setup is there, Entry Criteria
3. Stop Exit
4. Profit Exit
5. Position Size Strategy (You could use the Excel spreadsheet attached in the previous reply)
You could have several other exits (like Time Exit) as outlined in Van Tharp's book. Search in this forum if you can find a link for soft copy.
My current setup criteria are based on Dave Landry's patterns. Entry criteria is always pull back. For example,
N_MonthHigh setup :
1. Market is trending up
2. Sector is trending up. Stock follows sector.
3. 3/6/9/12 month high + 8 day EMA above 50 day EMA above 200 day EMA
4. Volume > 1,00,000 + Price > 100
First Thrust setup
1. Stock makes a 3/6/9/12 month high and loses 10% in the last 10 days
2. Market has turned direction
3. Sector has turned direction. Stock follows sector.
4. Volume > 1,00,000 + Price > 100
For Stops: I used to use Dave's strategy based on value of the stock. After reading Van's book, I am planning to use 3 * ATR (Volatility of the Stock). I am also looking at Chandelier's exit stop loss.
For Profits: I used Dave's reverse position sizing strategy for taking profits. i.e., once risk is reached, take 50% position off. Set the remaining = buy point. I am considering of changing it based on my reading of Van's book. I want to test the strategy of trailing stop with multiple of ATR, reducing the multiple as more profits are reached. I am looking at several things right now and I may test them to see how they work.
So, there is no direct answer to your question. Only direct thing that you can use is the Position Sizing Calculator. No matter what strategy you use, you need this to be successful.
You can start with Tripple Screen system. Google it. And don't look at the history of a stock and think what you missed. Thats the enigma with these stocks. History looks so easy. Once you step in, things are different. So, train yourself not to think about history. If you were not there, thats not yours.
, seen enough.