Thursday, November 29, 2007

PHILOSOPHY & METHODOLOGY II



The HOLDING PERIOD IS THE TIME PERIOD FOR THE PATH OF STOCK MOVEMENT. NEURALS are the nerve center, the real ganglia, for that MOVEMENT. The holding period reflects the length of time and effort and thought that goes into correctly PROJECTING STOCK MOVEMENT. NEURAL NETWORKS, I believe, will help determine the future development Of consistently accurate stock prediction. That is my bias. That is where it is going AND THIS IS WHERE IT IS AT...
The HOLDING PERIOD I am looking for varies from one day or less to a little over a month. This objective is determined not by design, but by PRACTICE, that is, by the real practical application of the trade. I want the most in the shortest amount of time. The less idle capital, the better. However, it is not good to want to much too fast. So it is important for me to gauge the move with objective criteria. Therefore, I like to see STOCK PRICES move - not sit and move back and forth for months or years. That movement I see as VOLATILITY. If the stock is volatile and the TECHNICAL INDICATORS say go, I want in.
TIMING supports VOLUME. If volume is the alpha and omega of a stock, timing is indeed its light year. Timing is critical TO A PREDICTABLE TRADE because you need to know when to get it in and when to get out. TECHNICAL INDICATORS help me do that, WHETHER THEY are in the public domain or not. I do not see them as "STUDIES". I see them as the key to successful stock prediction. The ability to correctly predict the next move and to have the proper tools to do it is what it is all about in order to make TRADING consistently profitable and SYSTEMIC. (That is almost a truism).
TIME & SALES are relevant here, because the faster they move the stock, the faster the PACE, the clearer the indications are for the sharpness and quickness of VOLATILITY together with the speed and angle of MOMENTUM. These indicators help give you the most bang for your buck. They constitute a part of the TOOLS necessary for analysis.
i want the good ones. The ones that do what I want them to do without me making them do anything, not the ones that do not do it. The ones that go in the direction I thought they would go validate my THEORY. However, to know where they are going, I need to know where they have been and what they have done and how they have behaved in the past. That is where the PATTERN of a stock's price movement from the past helps determine whether to take a trade or not to take a trade. To know where it was, HOW IT LOOKED (candle patterns), what it did (price movement) and how it did it (long or short candles), helps you know where it will be (up or down).
I like it fast and smooth (even though sometimes I do not get it), and I like to see it coming so know I am going to get it. (Obviously, sometimes you miss the fastball). The problem is to find the right stocks that will, not "has" or "has had", shown those characteristics in the most immediate near future, otherwise known as "the near term". While it is important to know what has happened, it is more important to know what will happen.
In the past we have known situations after they have happened, NOW increasingly it is important to know them BEFORE they occur. "Que Sera, Sera -- what will be will be -- is not an accurate perception when applied to the METHOD being espoused here in the practical application of the EQUITY TRADING. We need to know what will be and how it will be, not just that it will be.

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