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Any room on this forum for a thread on charts and technical analysis

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  • Any room on this forum for a thread on charts and technical analysis

    I suppose this is largely anathema on this forum because of the prevailing buy and hold/Boglehead mentality but would anyone have interested in having a thread to post chart setups based on technical analysis? Presuming, of course, that this does not violate any forum rules.

    Happy to expound on my reasoning if anyone is curious, but I have moved from buy and hold to active investing in individual stocks since the COVID rout and have started to find some modicum of success following a set of basic rules on entries and exits and I would love to find like-minded individuals to contribute and share with.

  • #2
    Although I'm a boring investor, I still enjoy following individual stocks and always enjoy learning more. With that said, I think a lot of people have gotten into active investing over the last 18 months. I predict a lot of people will get out of active investing during the next big pullback (20%+).

    Care to share your return since you've gotten into active investing? Biggest winners? Biggest losers?

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    • #3
      Curious to see how this “modicum of success” goes when the bear eventually comes out of hibernation.

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      • #4
        Actually, it is during a bear market or pullback that I expect to see significant outperformance of the benchmarks. The system that I use only allows for entry of stocks that are advancing and breaking out of consolidations. The stop losses are very tight beneath entry points and so the downside risk is quite small. I know that this runs entirely counter to the prevailing logic (that purchasing individual securities is much riskier than buying and holding index ETF's or mutual funds), but it is actually quite the opposite if risk is appropriately managed.

        Examples of recent successful entries and exits are Ford ($F) - closed for a 15% gain in about 3 days, Taiwan Semiconductor ($TSM) - closed for a 10% gain in a few days, and Hershey ($HSY) - closed at a 7% gain. These are just a few and there are plenty of losers to match to them, but the average loss is <2%.

        If these is interest (and allowed by forum rules), I can post charts as I enter new trades and anyone interested can follow along and witness my implosion

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        • #5
          Berkshire ($BRK.B) is another that I closed out at a 6% gain but looks like I probably should have held on to.

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          • #6
            Originally posted by Vae Victis View Post
            Actually, it is during a bear market or pullback that I expect to see significant outperformance of the benchmarks. The system that I use only allows for entry of stocks that are advancing and breaking out of consolidations. The stop losses are very tight beneath entry points and so the downside risk is quite small. I know that this runs entirely counter to the prevailing logic (that purchasing individual securities is much riskier than buying and holding index ETF's or mutual funds), but it is actually quite the opposite if risk is appropriately managed.

            Examples of recent successful entries and exits are Ford ($F) - closed for a 15% gain in about 3 days, Taiwan Semiconductor ($TSM) - closed for a 10% gain in a few days, and Hershey ($HSY) - closed at a 7% gain. These are just a few and there are plenty of losers to match to them, but the average loss is <2%.

            If these is interest (and allowed by forum rules), I can post charts as I enter new trades and anyone interested can follow along and witness my implosion
            I know this is n=1 but on another forum I follow, another poster follows the same concepts you do and trailed the market by about 50% last year.

            I always respect someone who posts in real time as they make moves.

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            • #7
              Do you have your performance for 2021? Is this just something you are doing with a small portion of your portfolio or is it a significant portion?

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              • #8
                Tax drag and fees are also reasons why people buy and hold. S

                If you are going to (and allowed to) post this info- you need to be explicit about time preference and risk reward.

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                • #9
                  I underperformed a buy and hold strategy in 2021 as I found my way into a personal strategy, which I didn't really settle in to until October or November. I was up about 10% in 2021 compared with, what 25% for the S&P? So not great in my first year but also not a complete catastrophe for a first full year of active trading. Most of the losses that hampered my performance were silly things, like chasing precious metals markets, etc. Since staying with this rule-based approach, however, I have outperformed the S&P. It's a short period of time of outperformance, which is why I'm not quitting my job any time soon, but I do think there is something to this. For instance, I am up just over 5% in the first few weeks of 2022 versus the market down 2%.

                  What's more important is that I am sleeping better at night knowing that my market risk is minimal. The COVID crash shook me and was a catalyst for me to critically re-evaluate my financial approach and I decided that I am uncomfortable holding through an event like that ever again.

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                  • #10
                    I use some TA, bollinger bands, RSI, support and resistance levels, patterns and such.

                    Ultimately it's all voodoo and you can find any sort of patterns or information to support your thesis and some others that go against it. Some of them work because there's algorithms and large funds that use the same ones and can act much quicker than any retail trader can act.

                    Some people can use this and make some money, others will use the wrong ones and lose money. You need a lot of time to watch stock movements and most physicians or other full time employed people won't be able to act on these at the appropriate times.

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                    • #11
                      I see no reason that you cannot post charts. For many years I subscribed to IBD (investors business daily) that was nothing but charts. I personally think owning a limited number of stocks which you can follow enhances performance. I guess like investing some money in real estate.

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                      • #12
                        Not everyone who posts here is a true boglehead.

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                        • #13
                          Originally posted by Vae Victis View Post
                          What's more important is that I am sleeping better at night knowing that my market risk is minimal. The COVID crash shook me and was a catalyst for me to critically re-evaluate my financial approach and I decided that I am uncomfortable holding through an event like that ever again.
                          Interesting.

                          Comment


                          • #14
                            Originally posted by Hatton View Post
                            For many years I subscribed to IBD (investors business daily) that was nothing but charts.
                            This was my approach when I first started investing. CANSLIM method by William ONeil. Did okay, but certainly not worth it after considering the time I put into it

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                            • #15
                              I for one am all for this and as I learn I hope to contribute. I've been watching Martin Shkreli's finance classes he posted before going to jail.

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