| How do you determine when to buy and sell? |
|
|
|
|
|
JBendar
Senior Member
Cash: $ 49.60
Posts: 271
Joined: 22 Mar 2004
Location: Woodbridge, New Jersey
|
| How do you determine when to buy and sell? |
 |
|
Green Room:
For those of you who are traders in stocks, commodities, futures, etc., it would be interesting to find the answer to something. How do you determine when to buy the trade vehicle you work with? In addition, how do you set your profit objective. Any responses would be appreciated. In my case, I look for stock with very high volume and at least a 20% difference between the high and low in a five day period. After that I look at a longer term chart to see the price history, and where the stock falls currently. The sale is determined by considering a 2 to 1 risk to reward ratio. Of course that is an objective. Sometimes you have to exit quickly, and forget about the objective if the plan doesn't materialize. If a 2 to 1 risk to reward ratio is not considered, then the profit will not be worth the effort. Please respond if you have an opinion or insight. Thanks!
JBendar
|
Thu Mar 16, 2006 4:17 am |
|
|
DanielB88
Contributing Member
Cash: $ 0.65
Posts: 33
Joined: 20 Nov 2005
|
Nobody who's really profitable would disclose that 
|
|
Thu Apr 13, 2006 5:58 pm |
|
|
moam293
Member
Cash: $ 3.25
Posts: 16
Joined: 06 Apr 2006
|
what you buy and sell and when depends on many factors,
how long you are intending to hold, how volatile, how big your pot is
generally the text book way is to not loose more than 2% of your pot on a given trade .. profts well always trail with stops, that in turn depends on how greedy you are,
One place where i worked, we werent allowed to loose more than 0.5% on a trade, but then the amounts were huge .
|
|
Fri Apr 14, 2006 1:14 am |
|
|
Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
|
| Re: How do you determine when to buy and sell? |
|
|
quote:
Originally posted by JBendar
The sale is determined by considering a 2 to 1 risk to reward ratio.
Not very risky and I see a restrictive reward limit on that. How do you determine 2:1?
I mitigate risk by waiting for the stock to prove itself before I buy: breakouts on high volume.
Profit objectives vary and can change as events unfold. I don't know that the rest of it can be summed up since so many variables dictate so many scenarios.
"Expect me when you see me."
|
|
Fri Apr 14, 2006 1:22 am |
|
|
Rolo
Yo' Daddy
Cash: $ 309.70
Posts: 1551
Joined: 13 Mar 2005
Location: Colorado/Florida
|
I TOTALLY agree....including the refining part....take concepts/principles and apply them with flexibility.
"Expect me when you see me."
|
|
Fri Apr 14, 2006 11:39 am |
|
|
jwhite622
Full Member
Cash: $ 17.25
Posts: 84
Joined: 02 Apr 2006
|
| Re: How do you determine when to buy and sell? |
|
|
quote:
Originally posted by JBendar
Green Room:
For those of you who are traders in stocks, commodities, futures, etc., it would be interesting to find the answer to something. How do you determine when to buy the trade vehicle you work with? In addition, how do you set your profit objective. Any responses would be appreciated. In my case, I look for stock with very high volume and at least a 20% difference between the high and low in a five day period. After that I look at a longer term chart to see the price history, and where the stock falls currently. The sale is determined by considering a 2 to 1 risk to reward ratio. Of course that is an objective. Sometimes you have to exit quickly, and forget about the objective if the plan doesn't materialize. If a 2 to 1 risk to reward ratio is not considered, then the profit will not be worth the effort. Please respond if you have an opinion or insight. Thanks!
JBendar
Hopefully you research your stock thoroughly--financials,P/E, charts, trends, candles, etc...
I personally keep a very continous eye on my stock of choice, looking for obvious candlestick reversals when selling a good stock --www.candlestickcharts.com teaches you the basics
If you have a bad stock--don't be emotional, release it @ -8% of what you payed for it, and no more...unless you see a solid reversal in effect.
As far as risk/reward--that is a style thing. I buy on breakouts and ride the wave...some people wait for the pullback and buy on the rally...
I would say that 2:1 is safe...but don't get caught up with that (if you ask me)...focus on a good sector, with great plays--research your stock thouroughly--set your buy/sell limits (on paper/ or program)...stay disciplined, and be patient(my biggest weakness)
GOOD LUCK
|
|
Fri Apr 14, 2006 7:13 pm |
|
|
JBendar
Senior Member
Cash: $ 49.60
Posts: 271
Joined: 22 Mar 2004
Location: Woodbridge, New Jersey
|
quote:
Originally posted by sarah
BTW, Bill O'Neil owns and runs Investor's Business Daily. The entire paper was conceived by Bill based upon his CANSLIM precepts.
FWIW, I also read his Daily Graphs publications weekly.
Investor's Business Daily is a reference that is essential for anyone who wants to make serious money. Since my tendency is toward technical analysis, IBD is just what the doctor ordered. Thanks for your suggestions.
Joel
P.S. I have read many of Bill O'Neil's books and have a few of his tapes.
|
|
Fri Apr 14, 2006 9:43 pm |
|
|
JBendar
Senior Member
Cash: $ 49.60
Posts: 271
Joined: 22 Mar 2004
Location: Woodbridge, New Jersey
|
| Re: How do you determine when to buy and sell? |
|
|
quote:
Originally posted by Rolo
quote:
Originally posted by JBendar
The sale is determined by considering a 2 to 1 risk to reward ratio.
Not very risky and I see a restrictive reward limit on that. How do you determine 2:1?
I mitigate risk by waiting for the stock to prove itself before I buy: breakouts on high volume.
Profit objectives vary and can change as events unfold. I don't know that the rest of it can be summed up since so many variables dictate so many scenarios.
Of all the books on investing/trading the majority of the authors have suggested a 2:1 ratio. It is just a guideline. Of course if a high flyer is found the guideline can be overlooked. Thanks for your insight
Joel
|
|
Fri Apr 14, 2006 9:47 pm |
|
|
|
