OTC stocks are for trading imo not 'investing'. Professionals Moderator
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Lots of people think they have a system that is full proof....but market dynamics imo suggest no system can be full proof. If any one system was 100% fail safe, then nobody would be selling when a buy signal was triggered...and likewise nobody would be buying when the sell signal came up.
It would look like a football game with both teams lining up on the same side of the ball. As for dollar cost averaging...pull up an Andex chart, the market always moves higher over the long haul when using broad benchmarks like the S&P or DJIA.
Bottom line....we all can't be doing the same things at the same times, the market needs both buyers and sellers.
Come and join me in "THE SWAMP", the OTC swamp that is. Help me identify which stocks have the postential for BIG GAINS before the industry hacks start pumping and dumping them.
It is fool proof. You cut your losses. Bro the greatest traders have all used this method.
There is no buy signal. No sell signal. Just rules to follow. History always repeats itself. What are you talking about. It is obvious, krill, that you have no clue what the CANSLIM system is.
The only fool in this system is the player. Once you master yourself, this system ALWAYS works.
Don't be blind to the truth. Go study the CANSLIM system.
Question What mistakes and pitfalls can I avoid as an investor? Answer The list below details some of the common mistakes most investors make. Review these mistakes and try to avoid them in your buying decisions:
1. Employing poor stock selection criteria. Beginning investors often don't know what to look for when purchasing a stock and end up buying lackluster companies.
2. Buying a stock when it's trending down in price. Do not bottom-fish. Stocks usually are down in price for good reasons.
3. Averaging down in your buying. If you buy a stock at $40 and then buy more when it falls to $30, your average cost is $35. You are following up on your losers and probably throwing good money after bad.
4. Buying low priced stocks. These stocks are usually cheap for a reason. Institutional investors normally don't look at $5-$10 stocks. Remember that institutional sponsorship is one of the ingredients needed to help propel a stock's price higher.
5. Wanting to get rich quick without doing the necessary homework. To make money in the stock market, you must spend time doing research, educating yourself, and learning from previous mistakes.
6. Buying on tips, rumors, stories, and/or advisory service recommendations. Most rumors are false and even if a tip is correct, the stock ironically will, in many cases, go down in price. Check the stock’s chart to see if it has topped out.
7. Buying second-rate stocks because of dividends or low P/E ratios. The more a company pays in dividends, the weaker the company may be because it may have to pay high interest rates to attract investors. Successful companies internally invest in their own company rather than pay out large percentages of earnings in dividends. A low P/E is most likely low because the company's past record is questionable.
8. Buying companies because they have a familiar name or product. Many of the best investments will be newer names you may not know very well. They may have a new product or idea to offer, so do some research and find out. “The New America” section of Investor's Business Daily is an excellent source for such new investment ideas.
9. Acting on poor advice. Most investors are not able to find good information and advice on the market. That's why it is critical to educate yourself as much as possible and not rely as much on other people’s opinions. Use the IBD SmartSelect® Corporate Ratings to provide independent confirmation.
10. Not buying stocks on new highs as they emerge from broad bases. Ninety-eight percent of investors are afraid to buy stocks as they begin to move into new high ground. It just seems too high to them. Don't allow your fears to dictate your purchases.
11. Stubbornly holding onto small losses when you could get out cheaply and move into a better performing stock. Again, don't let your feelings run your portfolio.
12. Cashing in small, easy-to-take profits, and holding onto small losses. This tactic is the exact opposite of correct portfolio management strategy.
13. Worrying too much about taxes and commissions. Your objective should be to first nail down a worthwhile net profit.
14. Speculating in options too much because you think it's a way to get rich quick. People concentrate in shorter-term, lower-priced options that involve substantially greater volatility and risk rather than in longer-term options. The limited time period works against short-term option holders. Never commit all your investments in options. Click here to access course IV in the IBD Learning Center, "How To Invest In Options." This course shows how options work, the benefits and risks of these investment instruments, and some of the strategies used with options.
15. Putting price limits on buy-and-sell orders. Novice investors rarely place market orders. This procedure is poor because the investor is quibbling for eighths and quarters of a point rather than emphasizing the more important and larger overall movement. Limit orders eventually result in your completely missing the market and not getting out of stocks that should be sold to avoid substantial losses.
16. Vacillating and not being able to make up your mind regarding when to buy, sell, or hold a stock. Investors have no plan and no rules to guide them and, therefore, are uncertain of what they should be doing.
17. Most investors cannot look at stocks objectively. They are always hoping and playing favorites, and they rely on their hopes and personal opinions rather than paying attention to the opinion of the marketplace, which is more frequently right.
18. Investors are usually influenced by things that are not really crucial, such as stock splits, increased dividends, news announcements, and brokerage firm recommendations.
After a correction, some stocks' 50-day moving average is under the 200-day average. Would you buy such stocks if all other fundamental and technical indicators were positive? Answer Consider purchasing it if the base is extremely sound and the stock is the leader in its industry. In most quality bases you will find the 50-day moving average above the 200-day line due to a general uptrend in the chart prior to the base formation. In some cases, typically in very long bases, you will find that the 50-day has not had enough time to reach the 200-day. When you see this, you shouldn't buy the stock unless there is an overwhelming reason to buy it. Run through your checklist of both fundamental and technical rules. If you find any other serious violations, do not buy the stock. Always keep in mind that you are trying to put the odds in your favor when purchasing a stock. If there are too many defects, the possibility of a breakout failing is much greater.
Question Do you have any insight regarding "penny" stocks or bulletin board stocks? Answer Regardless of how much money you want to invest in stocks, it's always a good idea to avoid cheap stocks. The market is an auctionplace in which stocks sell for what they're worth at the time. So when you buy cheap stocks, you get what you pay for. Our studies of the best-performing stocks found these winners were priced, on average, at more than $28 a share before they made their huge advances. Keep in mind that institutional investors - who do most of the trading in the market and can really make a stock move - generally avoid low-priced stocks. You should focus on stocks priced at least $15 a share.
Question You say to buy predominantly from the top five or six sectors in the New Highs list. But if a stock is making a new high, wouldn't it normally be up more than 5 percent from its pivot point and therefore too extended to buy? Answer The New Highs list featured each day in IBD (usually page B4) is an excellent place to search for new stock market ideas. Besides showing you stocks are showing strong price performance, it also shows you which sectors are asserting market leadership. Our studies of the greatest winning stocks over the past 50 years have shown that the majority of these big winners were part of a leading group or sector at the time they started their price advances. So industry grouping is an important component of selecting a winning stock.
It is true that many of the stocks on the New Highs list may be too far extended from the pivot point to buy now. However, they are still worth researching. Perhaps some of these stocks will consolidate or form another base, offering an appropriate entry point. Also, many of stocks on the list may still be at or near an appropriate buy point. Lastly, you should take cues from those stocks making new highs, as well as the strongest industry groups, and look for other stocks in those groups that may be forming bases.
To learn more about buying stocks and William J. O’Neil’s investing strategies please visit our IBD Learning Center at this link - http://www.investors.com/learn/B.asp
dollar cost avg is a recipie for disaster for a simple reason because instead of admiting that you chose the wrong stock you pour good money after bad money every trader knows NEVER avg DOWN only UP!!!!
Question You say that in a bear market, it's a good time to look for potential winners of the next bull market. How do you do that when most of today's leading stocks are defensive? Answer A bear market is a good time to do two things. First, study industry group moves, i.e. groups that may lead the next bull market; study any stocks that may be forming sound bases; and study the major market averages (read The Big Picture everyday). The market can quickly turn from bearish to bullish, so it is important to be fully aware of any potential groups that may suddenly move up to lead the next bull market. In the current market environment, where most leading groups are defensive, and most bases look suspect, there is little to buy. Still, one should continue to study the general market averages and look for clues as to what the next leading industry groups might be. You may find you only need to spend 5 to 10 minutes a day on these studies when the market is poor because there may be nothing on the horizon.
Secondly, study historical charts, such as old Daily Graphs books. Which stocks led the prior bull market and why? What did these stocks look like as they were breaking out of sound bases? Why did other stocks fail? What were the general market averages doing during this time? Marking up charts is an excellent way to learn.
dollar cost avg is a recipie for disaster for a simple reason because instead of admiting that you chose the wrong stock you pour good money after bad money every trader knows NEVER avg DOWN only UP!!!!
AMEN!
Y.Y. hit the most important part of why averaging down is the wrong play.
What works is keeping your losses tight...and making sure you let your winners run...
Josh all those posts are right on...we should have a special forum for those...
DISCLAIMER....PLEASE READ THIS BEFORE ENTERING FORUM.
Success is a State of Mind - - Tommy Bahama Profits always take care of themselves but losses never do. The speculator has to insure himself against considerable losses by taking their first small loss. - - Jesse Livermore The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the man of inferior emotional balance, nor for the get-rich-quick adventurer. They will die poor. - - Jesse Livermore
I agree. When we go live there will be a very long introduction, preview pages, and explanations of what we do here. There will also be free 2-week trials.
Stocks Selloff On Heavier Volume; Nasdaq Flashes Another Clear Distribution Day--3 Since The Start Of The Rally. Market Commentary Before midnight EST.
New Swing Longs: GPK KONA
New Swing Shorts: CLX PZZA KNOT SKM ARO
**For more information and charts of longs and shorts, go to Investors Paradise.**
OTC stocks are for trading imo not 'investing'. Professionals Moderator
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Quoted from MauiTrader
It is fool proof. You cut your losses. Bro the greatest traders have all used this method.
There is no buy signal. No sell signal. Just rules to follow. History always repeats itself. What are you talking about. It is obvious, krill, that you have no clue what the CANSLIM system is.
The only fool in this system is the player. Once you master yourself, this system ALWAYS works.
Don't be blind to the truth. Go study the CANSLIM system.
No I don't know the CANSLIM system....sounds like a weight loss program Don't take offense, it's the natural born cynic in me coming out. If something sounds too good to be true....then it is. I know, I know....I should already be a millionaire using the sure fire, no can fail "buy real estate with no money down" system....Hey, if this system of your's slims me down maybe I won't care if I lose money with it...
FWIW, I liked your comment about mastering yourself....or words close to that. I think any trader that's been around any amount of time has held on after decent gains and watched those gains turn to losses. Lots of people hold their winners and never take profits. I like JP Getty's quote...when asked how he got so rich he said:
"I always got out too soon".
Come and join me in "THE SWAMP", the OTC swamp that is. Help me identify which stocks have the postential for BIG GAINS before the industry hacks start pumping and dumping them.
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Don't take offense, it's the natural born cynic in me coming out. If something sounds too good to be true....then it is. I know, I know....I should already be a millionaire using the sure fire, no can fail "buy real estate with no money down" system....Hey, if this system of your's slims me down maybe I won't care if I lose money with it...