Comments on Fund My Mutual Fund: Bookkeeping: 'Rising Tide' Performance Year 2, Wee...

Hi Bill,Honestly I am more of a fundamental guy - ...

2008-08-10T20:27:00.000-04:00

Hi Bill,

Honestly I am more of a fundamental guy - really I prefer to pick stocks, hold them for months/quarters/year+ and then cut back when they begin to break down or take profits along the way. What this market is now is something that does not suit that style or play to my strengths which is fundamentals. A lot of what you are saying is probably accurate but I don't really pick stocks on technicals alone or technicals (mostly) but am being forced to. My strength has been idenitfying stocks/trends early and then benefiting when the crowd gets there. If one wants to argue that airline stocks or financials are the "new trend" I guess there is an arguement there but I simply don't believe the fundamental story for those, although fundamental mean little. So again, not my type of market.

I didn't say CTXS was not a buy or something to sell. I simply said its not the type of stock that fits my wheelhouse from the chart. What is working now is broken down stocks returning from the dead... thats not really my thing and I expect many of them to break down again in due time.

Unfortunately time frames right now are much too short for a "fund perspective" - it it for traders, not people who want to own good long term fundamental stories.

Mark, I think you mentioned that CTXS was a clear ...

2008-08-10T18:26:00.000-04:00

Mark,

I think you mentioned that CTXS was a clear sell into strength because the rally barely broke the resistance. Well I don't mean to be annoying but I notice you favor Moving averages which is solid. I also notice how your charts have volume indicators...well usually when these stocks make miraculous comebacks on declining volume (downtrending volume) the rally is fake and will meet resistance. And the same goes for breaks through resistance...they are more believable on high volume.

I am in T/A 101 too and i think you'd agree (ok more than agree) that charts are so important (only thing that matters) in this market, so i just was wondering if you ever use volume at all in decisions.

The other thing is that...I notice you are more of the Rev Shark type (as opposed to cramer) not to pin you to a pundit, but you prefer to sacrifice the bottom and the first 5% to preserve capital as you'd rather see and uptrend/better chart and catch the middle of the move, as opposed to buying aggressively and calling a bottom ;)

but secondary indicators are said to help spot turns earlier. when RSI and stochastics start turning up and making higher highs and higher lows and are in uptrends it usually signals the stock is already or is going to be in an uptrend. Actually I noticed this with a lot of junk that's been pumped up lately...look at Tech stocks ..like RIMM or aapl or whatever else, a few weeks ago the RSI and stochastic bottomed and have been in an uptrend before the stocks really showed a sustained bottom and then uptrend.

Again I apologize if i seem to be annoying and tutorial but i just thought that looking back on the recent tech rally..the RSI divergence (stock is sideways or down while RSI is starting uptrend with higher lows and highs) and stochastic divergence called the bottom so one would have been able to get in earlier and miss only the first say 5% instead of first 10% of move. when you see a stock beaten down so much way below supports/resistance it seems like its hard to chart and they're lost in nowhere's land..i just find secondary indicators can take away the "lost" feeling as they confirm trends and the changing of trends.

unfortunately in this market you're investments are only as good as your chart so hopefully your chart (as you reiterate and pound day after day) is good.

Mark - we have all been there [/here!] before - it...

2008-08-08T18:26:00.000-04:00

Mark - we have all been there [/here!] before - it takes a strong, honest person to look at the preception of a failing situation and then to deal with it.

Read this, take two beers and come back in the morning ... [besides it features you]

Feed: TraderFeed
Posted on: Friday, August 01, 2008 6:22 PM
Author: Brett Steenbarger, Ph.D.
Subject: Those Who Fake It Never Make It: Notes on Faking Reality

After noticing Trader Mike's update regarding a doctored interview with Dave Mabe of StockTickr, I decided to leave a comment on Dave's site. Here I'd like to amplify that comment, because it gets at the heart of trading success and failure.

We talk about losing discipline in trading as we might talk about losing our car keys or our way out of a forest. But losing discipline is not about a simple act of forgetting. It is an active process of refusing to act upon one's knowledge, of blotting out uncomfortable realities. It begins in small ways: talking about our winning days, but remaining mum about losers; convincing ourselves (and others) that we're "doing okay" and "breaking even", when in fact we've stopped looking at the red P/L; ignoring a profit target and taking small gains; violating a stop-loss level and substituting hope for planning on a losing trade.

Out of such small fakes of reality come the larger ones that lead to blow ups: the breaking of risk management rules, the rogue trader's futile attempts to cover up losses.

The really good traders? They don't present themselves as gurus. They're all too keenly aware of the market's way of humbling such pride, and they keep their hard-won lessons firmly in mind. Reality is their best grounding. It's the boasters and self-promoters who have to fake reality to sustain their images in the public mind. But if would-be gurus can't be faithful to reality, how can they remain true to you?

Years ago, when I was in Syracuse, I met with a trader who wanted coaching and counseling. He had sustained major losses in the markets. During his description of his trading woes--and his grandiose plans for making the money back--he casually noted that his home life was tense because he had hidden the losses from his spouse. I declined further meetings with the gentleman. His problem was not trading and, strictly speaking, it wasn't psychological. It was his lack of integrity: his unwillingness to be true to his wife, his plans, and his perceptual process. I had no doubt that his marriage would blow up the way his trading had blown up--and for precisely the same reasons.

As part of writing my new book, I asked over a dozen bloggers and traders to share their ideas about self-coaching and what has worked for them. A dominant theme in the responses has been a relentless drive to keep score: to learn from losing trades and winning ones; to assess performance and guide risk taking accordingly; to clearly identify strengths and weaknesses and adjust trading styles for those. These are experienced and successful traders who have met with success largely because they've been unafraid to sustain the look in the mirror.

Now when I first start working with a trader or a firm, I will toss out a simple homework exercise, such as keeping regular journal entries. Some traders go out of their way to make the most of the assignment; others fulfill it with minimal effort; still others fail to follow through at all. It's the difference between those who work hard at trading and those who hardly work: one seeks earned achievement; the other seeks the unearned. One is grounded in plans, the other in fantasies.

Show me a person's relationship to reality and I'll show you their character--and their success. Contrary to the popular saying, those who fake it never make it.
.

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Hang in there Mark. I've been in your position ma...

2008-08-08T17:54:00.000-04:00

Hang in there Mark. I've been in your position many of times. Times like these will often make you stronger in the end. Remember the old Livermore quote, it went something like this.....Sometimes in trading as bad as it gets is as good as it gets. I don't think there is a more appropriate take on the current status of things like the financials, airlines, refiners, retail, etc.... Most were/are priced for B.K., so how realistic is that? I remember all the bankruptcy talk in CLF back in 2002, we all know how accurate that was. Go back and read some board posts in CLF, you will swear they are talking about a airline or financial. No different this time around, just different characters. Fear and Greed, Fear and Greed. Thus why I believe the beat down sectors are the places with the most potential, commodity/global growth stories are nothing more than another group in a long list of recent bubbles, they look juicy from the fundementals slant, not much different than homebuilders of 2005/2006. In a year from now they won't look so swell. Just my opinions. I admire the fact that you are taking the beating to heart and at least are moving to other areas. It takes some a lifetime to figure that out. Keep with it, things will get better.