I was thinking...a reply to everyone.

  1. 9,866 Posts.
    Last night i sat down and had a serious think about where i was heading lol.....

    I decided to fiddle around with a few charts, i know the BASICS of charting i have just never used them in a strict trading plan.

    Anyway in the interest of keeping it simple, i decided to use a 5 day moving average and a 20 day moving average. This seems to correspond with the min. and max. amount of time i would like to be in a trade.

    I decided to just pull up a few charts at random of liquid stocks that i don't really follow. Although obviously it didn't work 100% of the time, it was amzing the strike rate of this method.

    As you would all know when the 5 day MA crosses up through the 20 day MA, you buy. It was quite accurate in picking large runs for stocks. 2 examples in recent times CRS and CTX.

    I also relaise that sometimes you may be given a buy signal and the very next day the stock may fall, but a stop-loss would eliminate any damgage.

    I also realise that any stock that has a crossover like this MUST be going up in order for the crossover to happen. Sure it may drop after you buy it, but up until that point it must have been going up. So by limiting yourself to buying only once a crossover has happened you are limiting yourself to stocks that are currently going up.

    After looking at many charts last night i am convinced that the above method will definatley increase my winners and decrease my losers. The above method takes out the guesswork of entry, which atm is my biggest problem.

    My only issue at this stage is whether to use a simple or exponential MA, i'm sure some of you will have some advice on this.

    But the above method removes all the S%^T. I will no longer be buying stocks that are EXPECTING announcments. Nor will i be buying stocks that LOOK CHEAP. Nor will i be avoiding stocks that i think have HAD THEIR RUN.

    After a few hours last night i am happy to use the above method, once i return with my strict trading plan.

    Once again thanks for your advice,

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