Control Risk
Never before have I seen so many polar opposite forecasts as I am seeing now. I agree with people with whom I never agree (or respect, in some cases) and I disagree with people with whom I usually agree (and respect a lot). But then again, not all of them on both sides.
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What the deal? Who knows? Nobody knows but that is no excuse for investment paralysis. I called it “retreating into an investment cocoon” on another website. Do your homework, follow some respected analyst’s analysis (but make your own conclusions) and then control risk.
As was mentioned in a previous post, it really is all about money management – make your bed and lie in it and control the heck out of risk. A good trader can make money no matter what portfolio he is given because he will cut the crap out right away and let the correct decisions ride. Trite but true.
Steve Nison, aka Mr. Candlesticks, likes to push a trading triad – Eastern Technicals, Western Technicals and Money Management. Everyone knows how to buy but few really master the art of selling.
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That all sounds fine and good, but in a sideways, thrashing market, it ain’t so simple. A genius trade one day becomes a round-tripper back to even the next. A bomb trade one day equals a “got stopped out.”
Comment by Maria — 7/1/2009 @ 7:54 am
Another day where the market makes its move early and then just sits.
Comment by BMB — 7/1/2009 @ 11:11 am
was MYGN a head and shoulders?
Comment by Viresh Amin — 7/1/2009 @ 12:41 pm
Not to my eyes it wasn’t. What’s the big move down today? Was there news?
Comment by BMB — 7/1/2009 @ 12:55 pm
Cut in Ratings
Comment by Viresh Amin — 7/1/2009 @ 1:25 pm
Looks like they cut their outlook too. That’s a pretty nasty tumble they are taking today.
Comment by BMB — 7/1/2009 @ 1:39 pm
MYGN was a classic William O’Neil short pattern on the weekly and daily charts. Go see the book, “How to Make Money Selling Stocks Short” for lots of example pages of patterns identical to MYGN.
http://www.amazon.com/Money-Selling-Stocks-Short-Trading/dp/0471710490
Broke the 50dma, rallied back into the 50dma, stalled and built a false handle, had huge distribution on 06/26 (for whatever excuse reason for the volume one might name, it still was distribution), then blew-up today. The bullish party for this stock ended confirmed back on 04/22.
Problem is there are more and more of these “break, rally, and stall the 50dma” and minor head-and-shoulders building up.
If more stocks can’t get above the 20dma with volume, a test of 878 on the S&P could be brewing.
Comment by Henry — 7/1/2009 @ 2:34 pm
There have been a lot of shorts setting up lately, IMO. I’ve taken a few of those trades and, unfortunately, have been stopped out on a few. The downdraft just hasn’t gained momentum yet.
Comment by BMB — 7/1/2009 @ 3:00 pm
Thus, what we call a sideways chop. Happy 4th of July week everyone! Hope to see some at the Tea Parties.
Comment by Henry — 7/1/2009 @ 4:19 pm
AIG — reverse split from 1 to 20 bucks. Already back at 18.
Comment by BMB — 7/1/2009 @ 7:10 pm
Yeah a reverse split in a stock that should be worth 0 is just a bad idea. When it’s super cheap people see it as a non-expiring option, now it just has to get back down to that price again.
Comment by Brad — 7/1/2009 @ 11:42 pm