January 30, 2009

One of the common mistakes for any investor or trader is to feel compelled to have to be in a stock position in order to satisfy the need to be having a chance to make money in stocks.  There are times when it is best to be out of the market or when the market is in a transition from just finishing a “harvest” to waiting until the market is in a high probability buying environment.  Today and yesterday is such a time.

The sectors that I follow from banking stocks to technology, ag-chemicals, oil & gas, housing, steel, food, retail and others are mostly in “no man’s land” where it isn’t a good time to get long or short because the odds are 50-50 at best.

Discipline yourself to wait until the market or a sector is ready to buy long (or short if that is your orientation).  Take the big money center banks WFC, Wells Fargo, or BAC-Bank of America, or USB-US Bancorp, JPM-JP Morgan the week before last.  I wrote in The Daily Stock Report the high probability set-ups in this sector.  We just finished taking profits in this sector the last few days and now we look for other opportunities that give us high probability of making money but I don’t see many yet.

How about the November 21,2008 bottom in the whole market, not just in one sector but in almost all sectors.  There is an example of an extremely high probability “set-up” to buy stocks long.  Well, you get the idea.  It is discipline and emotional control that keeps you from going into markets like yesterday and today where neither long or short ideas had high odds.

Take care and talk to you soon!

Mitch King

Uncategorized online stock trading, stock market education, stock picks, stock trading strategies

December 9, 2008 The most important part of your brokerage firm’s online trading platform is the charting. What information does it display and how easy is it to setup and change for different looks is the question that comes to my mind. For example, I like to use a lighter background with a darker price chart, green for fast moving average, red for slower moving average, orange for On Balance Volume (OBV), red and green for the MACD signal lines, red and green up and down volume bars, candlestick style price chart, yellow for %K and medium blue for %D, and possibly an orange histogram with the MACD signal lines overlayed on top of it. To get the full set-up instructions step by step, click here to receive the stock chart set-up instructions for all 5 brokerage firms from Schwab, Fidelity, Etrade, Ameritrade and Scottrade. Some people like a black background and that works too. It comes down to what you get used to and what suits your tastes. It is the reading and interpreting of the information is what is of prime importance. As I mentioned in the last blog post, Schwab has a tick chart available, the only large online brokerage firm that offers tick information at the moment. But it is very likely other firms will add that feature in. This can be set for 1 tick or all the way to 25 ticks. A 1 tick setting means that you want each and every order to show up on the chart, 1 tick for each order that goes through time and sales. See time and sales in glossary. To be continued . . . . . Time and Sales: The official record of all executed trades during a trading day. Each stock has time and sales and this is provided by most brokerage firms for no charge. You will see a window showing every order displayed with the time in hours, minutes, seconds and fractions of seconds. (hh:mm:ss.x), 12:31:06.3)

Stock Trading, Stock Trading techniques, stock market education chart setup, Stock Charts, stock market educatino, stock trading strategies