The bears den

[chrisloh65]

I never really bother to read or listen to those comments from analysts.
If they so good, they will be rich by their own investment, not selling their views.
Same for others too.

I dont really have levels in mind, besides I am very unpredictable myself. I would be in cash and jump in when there is like turmoil and fear. When you watch Bloomberg and you have all Bear analysts coming on TV and giving even lower targets for the S&P500. I remember during the December 2018 market plunge, analysts on TV were saying we are going much lower like 2200 on S&P500. Unfortunately I was fully allocated at that time and couldnt make use of that opportunity.

 

[DukeCS33]

In a bull market, the trend is established and anyone can swing trade. Buy the dips on oversold oscillators that coincide with a bounce over a trendline support or horizontal support line and there is a high probability that one would make money. (many of the so called gurus were selling courses built around this tactic) However, when the market is going side way like in the current scenario where the trend is a wide ranging sideways movement, how would one still swing trade? Those adopting the method above would more often than not, get stopped out. Of course, one can stop swing trading and do range trading but in a volatile widening top formation, the chance of range break is also fairly high. So are there still ways to swing trade? Keen to hear views.

 

[Mecisteus]

So are there still ways to swing trade? Keen to hear views.

You just need to make a gamble.

Use whatever indicators you like, place your bets but better set all your stop losses and profit taking levels. To me, RSI is the best indicator.

Instead of betting in the short term, I rather adopt a longer term view.

Good fundamental stocks which are oversold are more likely to rebound in a recovery. S&P was up 1.4% last night. Some of my stocks were up 3% and 1 was up 6.4%.

 

[h.y.o.m]

In a bull market, the trend is established and anyone can swing trade. Buy the dips on oversold oscillators that coincide with a bounce over a trendline support or horizontal support line and there is a high probability that one would make money. (many of the so called gurus were selling courses built around this tactic) However, when the market is going side way like in the current scenario where the trend is a wide ranging sideways movement, how would one still swing trade? Those adopting the method above would more often than not, get stopped out. Of course, one can stop swing trading and do range trading but in a volatile widening top formation, the chance of range break is also fairly high. So are there still ways to swing trade? Keen to hear views.

Hi DukeCS33,

In today's world where tweets can come out of nowhere to cause sudden reversal, it is very difficult for traders. If I have to trade, a few options come to mind.

- Accept higher risk, set wider stops so that they can withstand Trump tweets and hopefully, the market reverses later. Higher risk means smaller position size naturally.

- Intra-day trading. You sound like a professional veteran trader. So, I guess it suits you. Few is good at this. Even if they are, they may have other commitments.

My favorite course of action when I keep getting slapped is to stand aside and do research, or whatever activity that interests me. Stop digging a hole when the environment is hostile.

 

[DukeCS33]

You just need to make a gamble.

Use whatever indicators you like, place your bets but better set all your stop losses and profit taking levels. To me, RSI is the best indicator.

Instead of betting in the short term, I rather adopt a longer term view.

Good fundamental stocks which are oversold are more likely to rebound in a recovery. S&P was up 1.4% last night. Some of my stocks were up 3% and 1 was up 6.4%.

That's a good way to go about it. Stocks with good fundamentals are more likely to withstand a sell off and would be the first to recover. I shall be collating this as a point and would summarise points raised in this thread for education purposes. Hopefully it helps those who are trading and investing.

 

[DukeCS33]

Hi DukeCS33,

In today's world where tweets can come out of nowhere to cause sudden reversal, it is very difficult for traders. If I have to trading, a few options come to mind.

- Accept higher risk, set wider stops so that they can withstand Trump tweets and hopefully, the market reverses later. Higher risk means smaller position size naturally.

- Intra-day trading. You sound like a professional veteran trader. So, I guess it suits you. Few is good at this. Even if they are, they may have other commitments.

My favorite course of action when I keep getting slapped is to stand aside and do research, or whatever activity that interests me. Stop digging a hole when the environment is hostile.

Thanks for your views. You raised several good points - stand aside, trade intraday etc. I am focusing on swing trading and would take in your imput on this particular point and put the rest as other considerations.

So far, we have the following:

1. Stocks with good fundamentals are more likely to withstand a sell off and would be the first to recover. So choose good fundamental stocks to swing trade and hold for longer periods. (Mikedirnt78)
2. Set wider stops, trade smaller quantum to manage the risk of volatile price actions from headline news. (h.y.o.m)


Other considerations:
1. Stop trading and do research when the environment is hostile. (h.y.o.m)

I would like to encourage more constructive and educational postings and your contribution would raise the level of this forum. Any more pointers please?

 

[Mecisteus]

That's a good way to go about it. Stocks with good fundamentals are more likely to withstand a sell off and would be the first to recover.

On the downside, good stocks may sell off too. So they may not necessarily withstand a sell off.

A reason is that these good stocks may have outperformed during the bull market.

So during a sell off, investors/traders may lock in profits to pay off losses from other stocks.

But on the recovery side, these stocks will outperform again.

1 such example is V. It peaked at $187 and went down to a low of $169 recently.

 

[DukeCS33]

On the downside, good stocks may sell off too. So they may not necessarily withstand a sell off.

A reason is that these good stocks may have outperformed during the bull market.

So during a sell off, investors/traders may lock in profits to pay off losses from other stocks.

But on the recovery side, these stocks will outperform again.

1 such example is V. It peaked at $187 and went down to a low of $169 recently.

Definitely. 70% of stocks would take its cue from the main index performance. But when a stock is fundamentally strong, the institutional buyers would step in to buy if it is oversold and therefore create conditions suitable for swing trading. The key is to determine if the stock may have outrun its fundamentals and poised for a deeper correction or is going to be distributed and it has peaked.

 

[Trader11]

Definitely. 70% of stocks would take its cue from the main index performance. But when a stock is fundamentally strong, the institutional buyers would step in to buy if it is oversold and therefore create conditions suitable for swing trading. The key is to determine if the stock may have outrun its fundamentals and poised for a deeper correction or is going to be distributed and it has peaked.

Pick stocks according to Magic Formula.

 

[limster]

blogger 3FS posted that his warchest is $1.36 million. he waiting to huat big big when the crash comes

 

[Trader11]

blogger 3FS posted that his warchest is $1.36 million. he waiting to huat big big when the crash comes

Hmmm what if the expected crash didn't happen? Why these people like to predict things?

 

[DukeCS33]

Pick stocks according to Magic Formula.

Thanks. For those who do not know what Magic Formula investing is. Here is a link:

https://en.wikipedia.org/wiki/Magic_formula_investing

This adds on to Mike's point about picking stocks with strong fundamentals.


So far, we have the following:

1. Stocks with good fundamentals are more likely to withstand a sell off and would be the first to recover. So choose good fundamental stocks to swing trade and hold for longer periods. (Mikedirnt78)
2. Set wider stops, trade smaller quantum to manage the risk of volatile price actions from headline news. (h.y.o.m)
3. Pick stocks according to Magic Formula. (Trader11)


Other considerations:
1. Stop trading and do research when the environment is hostile. (h.y.o.m)

 

[limster]

Hmmm what if the expected crash didn't happen? Why these people like to predict things?

maybe the upside is higher than the downside....

if you believe that its highly unlikely for a mega rally to take place until the trade war is settled, then the downside is limited. on the other hand, the upside might be huge if there is a big crash.

i'm still buying equities this month, but also putting some cash flow into warchest... but sadly SSB rate is getting worse and worse..

 

[Shiny Things]

I dont really have levels in mind, besides I am very unpredictable myself. I would be in cash and jump in when there is like turmoil and fear. When you watch Bloomberg and you have all Bear analysts coming on TV and giving even lower targets for the S&P500. I remember during the December 2018 market plunge, analysts on TV were saying we are going much lower like 2200 on S&P500. Unfortunately I was fully allocated at that time and couldnt make use of that opportunity.

It's good that you agree that you're unpredictable, but we've seen in the past that you tend to trade pretty emotionally and get scared out of positions really easily. I've seen you buy in the past, then panic and immediately sell at a loss - but if you'd held on you'd have made really great money.

Can I make a suggestion?

Pick a level in IWDA where you'd be happy to buy and hold it forever. Stick a buy order in at that level, and then switch off all the news. Everything. If you're right and there's a huge crash, you've bought and you're happy. If you're wrong and there isn't a huge crash, at least you haven't over-traded and lost money.

Really, the best solution for you would be to fire yourself and hire a money manager to invest on your behalf, but if you're going to trade your own money, this is the next best thing.

 

[Trader11]

It's good that you agree that you're unpredictable, but we've seen in the past that you tend to trade pretty emotionally and get scared out of positions really easily. I've seen you buy in the past, then panic and immediately sell at a loss - but if you'd held on you'd have made really great money.

Can I make a suggestion?

Pick a level in IWDA where you'd be happy to buy and hold it forever. Stick a buy order in at that level, and then switch off all the news. Everything. If you're right and there's a huge crash, you've bought and you're happy. If you're wrong and there isn't a huge crash, at least you haven't over-traded and lost money.

Really, the best solution for you would be to fire yourself and hire a money manager to invest on your behalf, but if you're going to trade your own money, this is the next best thing.

10K sgd per month is enough to retire without investment. Especially if live in India during retirement.

 

[revhappy]

Interesting performance table by FSM for different markets in 3Q 2019.

https://www.fundsupermart.com/fsm/a...019-market-report-card-top-performing-markets

Japan was the best performer. HK & SG were at the bottom. SG is down 6% this quarter. HK is down 6.9%

 

[limster]

10K sgd per month is enough to retire without investment. Especially if live in India during retirement.

salary is not just how skilled you are but supply and demand. instead of surfing the net on how get rich quick, forummers should spend time doing market research to see what skills and jobs are in demand. sometimes getting an additional certification is enough to increase your marketability.

for example, can ask revhappy to confirm since he's in the IT line, but I hear that IT staff with additional security qualifications are now in high demand. 120k a year no problem for those who have to oversee enterprise level security.

 

[churnmaster]

You shouldn't have recalled me, see I brought the bear along with me

Well, I have been trading with a bearish view so am OK with that

 

[churnmaster]

Thanks. For those who do not know what Magic Formula investing is. Here is a link:

https://en.wikipedia.org/wiki/Magic_formula_investing

This adds on to Mike's point about picking stocks with strong fundamentals.


So far, we have the following:

1. Stocks with good fundamentals are more likely to withstand a sell off and would be the first to recover. So choose good fundamental stocks to swing trade and hold for longer periods. (Mikedirnt78)
2. Set wider stops, trade smaller quantum to manage the risk of volatile price actions from headline news. (h.y.o.m)
3. Pick stocks according to Magic Formula. (Trader11)


Other considerations:
1. Stop trading and do research when the environment is hostile. (h.y.o.m)

In a sideways market, I think a long / short portfolio has the best chance to make money. Now long / short can be achieved in many way like long the markets which are rallying and short the markets which are falling. OR long the winning stocks and short the losing stocks with in the same market / across markets.

My preference is for the index rather than individual stocks and using options. Selling OTM call options with strike price outside the trading range, especially if you are long the underlying. Its better than being just long only. Selling closer to the top end of the trading range and closing the same closer to the bottom end of the trading range and then repeating the same. An alternative to this would be buying an OTM put option with strike price outside the trading range, when the underlying is closer to the top end of the trading range and closing the same closer to the bottom end of the trading range. This is especially when you do not have any position in the underlying and don't want to be net short.

 

[churnmaster]

Interesting performance table by FSM for different markets in 3Q 2019.

https://www.fundsupermart.com/fsm/a...019-market-report-card-top-performing-markets

Japan was the best performer. HK & SG were at the bottom. SG is down 6% this quarter. HK is down 6.9%

Courtesy BOJ's ETF buying program