Dr. Winton Felt's Articles in Stock Market Investing - ABC Article Directory | Submit Articles | Article Search Engine

Dr. Winton Felt's Articles in Stock Market Investing

Show All\|Display Category\|Title\|Newest\|Oldest
Where to Put a Stop Loss Whether you use volatility-based, Fibonacci. Gann, percentage declines, pivot points, or any other method for determining where to put a stop loss, your stop loss will sometimes be triggered just before the stock resumes its climb. Learn to live with it. The alternative can be disastrous. Be Both a Short-Term Trader and a Long-Term Investor Short-term traders often assume less risk than long-term investors. There is a right time and a wrong time to own the stock of every great company. The smartest investors base their decisions on the balance between risk and reward, not on a pre-determined holding period. Short-Term Stock Trends and Risk Control Risk control is more important than being a long-term investor. Stock trends are becoming shorter. Risk is increasing. Riding out all dips in stock price can lead to disaster. Stock Market Investing: Long-Term or Short-Term? To buy and hold stocks for the long-term has been the preferred approach to stock market investing for many decades. However, in a volatile stock market this approach can be very expensive in terms of risk vs. return on investment. The long-term holder may not be taking the wisest course after all. The Fundamental vs. the Technical in Stock Buy and Sell Decisions In a volatile market, technical signals tend to precede announcements of change in the fundamentals of a company. Understand how this works and how to use both the technical and the fundamental in your buy and sell decisions. What does "Timing the Market" or "Market Timing" Really Mean? As practiced by professionals, "market timing" is about buying and selling in accordance with a predetermined set of conditions and rules. It is about following the buy signals and the sell signals. It is not about investing according to how one "feels" about the market, and it is not about the illegal activities of some mutual fund managers that the media has referred to as "market timing." The Best Stop Loss for Long-Term Investors Wherever the stop loss is placed, there is the chance that the stock will reverse course after the stop loss is triggered. We wondered if there was an optimum stop loss placement that would minimize both the loss allowed by the stop loss and the probability of a reversal after the sale. Diversification and Stop Loss Placement Some of the most respected names in the investment world (Granville, Weinstein, Dines, Magee, Zweig, Sperandeo, Schwager, O'Neil, Murphy, and others all agree on the necessity of using stop losses. Though they do not seem to agree on how much of a stock decline to allow before selling, they are much closer in their thinking than is apparent on the surface. Timing the Market for Profitable Stock Investment Is there a legal form of market timing? How does it differ from illegal market timing? The market does indicate what it wants to do. People who align their market decisions with the indicated biases of the market are much more likely to trade or invest profitably. The Market is Rising but Stocks Keep Breaking Down During the transition from bear market to bull market, individual stocks are often quite choppy in their price action. Though the market is steadily rising, individual stocks keep breaking down with disconcerting frequency. Investors and traders might consider these alternatives to leaving their money in cash. Control Risk and Loss in the Stock Market Too few traders and investors buy near support, limit the potential for decline, or control losses through volatility adjusted stop losses. Too few have a plan for limiting risk before making the trade. Here are some considerations. A Test To Find The Best Moving Average Sell Strategy There are many types of sell strategy. Of the moving average crossover variety, traders have a wide range of opinions about which is the best strategy. We tested the profitability of the Donchian system, the R.C. Allen system, and a variety of other systems to find the answer. Investor or Trader: What's the Bottom Line? Should we "Buy and hold" or "Sell losers quickly?" Should we hold for the long-term or hold only rising stocks? What differentiates most investors from most traders? How do disciplined investors and traders differ? Small Losses Are the Mark of a Disciplined Trader Most traders generate a mix of small and large losses along with small and large gains. The mark of an expert trader is that all his losses are small. Losses are not permitted to grow. Profits are allowed to grow to become larger profits. This results in enhanced profits, lower risk, and greater flexibility. An Intermediate-Term High-Performance System Keeping a portfolio fully invested most of the time in rising stocks is what produces high performance. Use the correct strength measurement to rank the stocks and keep invested in those that rank the highest. Stock Buy and Sell Signals With The CCI The Commodity Channel Index (CCI) was created to flag when cycles begin and end. Traders have found that it often generates stock buy and sell signals with remarkable accuracy. The Triple Moving Average Crossover System Many investors use the triple moving average crossover system to buy and sell stock. It can be adjusted so that its buy and sell signals are generated either more quickly or more slowly. The third moving average can help an investor avoid selling unnecessarily and buying when an apparent new trend is actually only a false start. Buy and Sell Signals of A Moving Average System The price of a stock crossing the stock’s moving average has been used as a buy or sell signal by traders for a long time. However, many people do not have a well-defined buy and sell moving average discipline. Here we will give an example of a discipline that many have used to generate their buy and sell signals. Stocks Cycle Through Four General Phases All stocks cycle some of the time. Knowing something about this cycling behavior can help a person understand what is happening and why, motivate a person to act, and help define the action to be taken. Stop Losses the Right Way, Where, and How Market volatility is high. How can a person set a stop loss so that he won’t second guess it or regret where he placed it when the stop is triggered? Base it on “significance” rather than on the expectations you have for the stock or on your emotions. To Sell a Stock or Hold--When Is it Time? Should you use the strategy of the long-term buy-and-hold investor or the short-term sell tactics of the trader in order to lock in small gains? Let us look at a few alternatives and possibly a strategy. The Probability of a Stop Loss Being Triggered Sometimes there are no obvious regions of price support that can be used as a reference for placing a stop loss. However, by using a volatility-based stop loss, you can set your stop so that it is statistically improbable that it will be triggered by a stock’s normal fluctuation within a given holding period. This can give a stock enough “wiggle room” to continue its climb without a high risk of a premature sale because of a non-significant lurch of the stock.