From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #689 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Tuesday, August 31 1999 Volume 02 : Number 689 In this issue: [CANSLIM] Trading tips Re: [CANSLIM] King Re: [CANSLIM] acc/dis numbers [CANSLIM] The risks of online trading (8/29/1999) Re: [CANSLIM] King Re: [CANSLIM] The risks of online trading (8/29/1999) ---------------------------------------------------------------------- Date: Sun, 29 Aug 1999 20:31:39 -0800 From: "Patrick Wahl" Subject: [CANSLIM] Trading tips This came in as a result of me being on a list that gets infrequent trading tips from Linda Raschke Bradford - this one is from Mark Cook via her mailing. Anyway, it discusses daytrading mainly, but I think the general rules apply to investing of nearly any duration, might be of some interest.... - ------------------------------------------------------------------------------------------------- WHAT MAKES A TRADER SUCCESSFUL - Mark Cook Many people have asked me over the years what it takes to be a successful trader. The answer is not clear but here are a few thoughts to ponder and apply. First, you must have a complete commitment to trading and do it full-time. If it is a hobby or a secondary pastime, I know how the bottom line will be - a big minus. Trading must be addressed as a profession because if you do not treat it as such, let me assure you, those who do treat it this way will separate you from your money very quickly. Secondly, you must fit your trading habits to your individual personality. If you are an impulsive individual, your style will reflect more trading than a calculating individual who waits for all the indicators to fall into place. The personality factors more than any other factors I know will determine success or failure. If you are an emotional person, admit that you are and structure your trading habits to make emotions a positive influence, not a negative one. If you are either greedy or fearful, that will affect your decision making on a position and without recognizing the governing emotion, your decisions will tend to be wrong. When I experience emotions in the market, they tend to be fear. Whenever I am the most fearful of the market, I recognize that at these times there can also be some of the best opportunities. Whenever my fears become overwhelming, my discipline tells me to buy or sell, and discipline must win out or you are doomed to failure. The work ethic can never be overstated. I watch the market all day long from the opening bell to the closing bell. I have kept diaries on every day in the market for the last nine years, sometimes having over 40 entries in my diary per day. If I do not do my work, my profit suffers. There is no short cut in trading and the market will quickly find if you are lazy. Planning is the objective part of trading. Start with the worst case scenario and work from there. You will never be more objective than before you execute a trade. Once you are in a trade, emotions take over. The plan must be in place before the activity takes place. Determine a plan that tells you when you are wrong and admit it. Get out, retreat, and live to fight another day. As the day progresses, know how much money you have made or lost. It is much like knowing the score of a basketball game at every instant and you are the coach. Trading is a job and your paycheck is determined by your ability. You can only maximize your ability if you have all the information. The key to S & P trading is to live by the rule that "a dollar made should be kept." This means that profits should be guarded like Fort Knox to keep losses from stealing your net worth. Enter every trade with the understanding of your risk, not your profit potential. If you can honestly answer to yourself that this risk is acceptable then the trade should be implemented. What happens is that human nature causes greed to become a focal point in minds. This thought of "how much money can I make" dominates the mind set and blots out the negative of "how much money can I lose". Until your focus is entirely comprehending the negative, or losses, the positive, or profits, will allude you. Many times I have seen people trading the S & P Futures to have a very profitable run of short duration. The 'walk on water' conviction does one thing, it enables you to get to deeper water before you drown. The mistaken air of confidence is just an emotion that precedes the consumption of humility. Let's look at one last rule - a must do. Have complete faith in your indicators. Many times your indicators give a buy or a sell signal and you don't follow it because you just don't have the confidence that this time the signal is right. Successful traders believe in their indicators but are also very aware that nothing is 100% foolproof. Not taking a trade that is set-up using indicators you have developed is like calling yourself a liar. The indicator is a product of you telling yourself to do a trade and you respond by saying, " Indicator, you are not giving me a true signal." Grade yourself a 'red F' and go sit in the corner. The best advice I can give to anyone who aspires to become a trader is to observe those who are successful. Any information that you can procure on trading philosophies, trading mechanics and trading techniques of the pros is well worth your while. If learning from those who have experience cuts down on your learning curve time, isn't it worth it? I have heard persons say that they were going to learn by themselves. Learning for yourself will work if you have the time and the financial resources. Stubbornness and pride can be hazardous to your wealth. If you do pursue learning from the 'masters' do not be surprised to find that there are many different ways to trade profitably. Do not try to clone another individual because your personality is never exactly the same as theirs. Observe, learn and test the waters to arrive at the confidence level you will need to achieve consistent success. Finally, and most importantly, trading is a long-term commitment. I fervently believe that it takes several years to become a true professional. Each year you should become more consistent in your profits and enjoy more confidence in your indicators. My final daily rule is to take every trade and dissect it. This will provide a road map for success by knowing where you have been and what mistakes you can learn from and which to avoid. - - ------------------------------ Date: Mon, 30 Aug 1999 06:43:58 -0700 From: Subject: Re: [CANSLIM] King Hi Patrick, Price and volume action the past two trading days has been looking good and IMO is constituting a breakout, however I did not like the price volume action over the past two weeks...volume has been over average in both up and down directions. I personally like to see a better setup before the B/O...with generally lower volume and especially lower volume on down days. Also earnings growth has been very strong this year with upside surprises every quarter. However, Yahoo is only projecting 20% growth the next five years...so the analysts following this stock appear to be expecting a significant earnings deceleration from current 40 to 80 % numbers. This may or may not occur, but I like to see those expectations a little higher. It may all depend on what is driving the current growth ie, internal or thru acquisition. Have a great day, Ray "Ziggy" Wroblewski Gilbert, AZ PWahl@sysinn.com wrote: > King Pharmaceutical (KING) seems to be making a move today - is popping up > from a flat base, but not at an all time high. Volume looks good for this > time of day. Not quite sure this constitutes a breakout. > > - - - ------------------------------ Date: Mon, 30 Aug 1999 13:27:19 GMT From: musicant@pacbell.net (Dan Musicant) Subject: Re: [CANSLIM] acc/dis numbers Umm...did you forget the stock symbols? How do I make sense of this? Dan On Sun, 29 Aug 1999 00:01:01 EDT, you wrote: :Here are the latest acc/dis numbers : :Date A B C D E AB/A:E %E :8/2/1999 1234 2835 1309 990 342 61% 5% :8/3/1999 1237 2836 1310 986 336 61% 5% :8/4/1999 1203 2828 1324 1008 334 60% 5% :8/5/1999 1112 2808 1344 1049 361 59% 5% :8/6/1999 1022 2762 1358 1097 401 57% 6% :8/9/1999 949 2762 1396 1119 403 56% 6% :8/10/1999 945 2676 1416 1161 431 55% 7% :8/11/1999 940 2629 1400 1197 461 54% 7% :8/12/1999 850 2530 1412 1285 518 51% 8% :8/13/1999 890 2537 1400 1279 508 52% 8% :8/16/1999 902 2549 1423 1243 502 52% 8% :8/17/1999 944 2636 1357 1216 469 54% 7% :8/18/1999 939 2648 1330 1216 490 54% 7% :8/19/1999 979 2643 1368 1181 461 55% 7% :8/20/1999 960 2652 1336 1188 489 55% 7% :8/23/1999 946 2658 1353 1194 477 54% 7% :8/24/1999 964 2706 1321 1179 470 55% 7% :8/25/1999 1016 2731 1293 1140 455 56% 7% :8/26/1999 1026 2674 1338 1121 474 56% 7% :8/27/1999 1009 2735 1307 1123 462 56% 7% :8/30/1999 965 2704 1380 1125 460 55% 7% : :Spreed sheet version : :Date,A,B,C,D,E,AB/A:E,%E : :8/2/1999,1234,2835,1309,990,342,61%,5% :8/3/1999,1237,2836,1310,986,336,61%,5% :8/4/1999,1203,2828,1324,1008,334,60%,5% :8/5/1999,1112,2808,1344,1049,361,59%,5% :8/6/1999,1022,2762,1358,1097,401,57%,6% :8/9/1999,949,2762,1396,1119,403,56%,6% :8/10/1999,945,2676,1416,1161,431,55%,7% :8/11/1999,940,2629,1400,1197,461,54%,7% :8/12/1999,850,2530,1412,1285,518,51%,8% :8/13/1999,890,2537,1400,1279,508,52%,8% :8/16/1999,902,2549,1423,1243,502,52%,8% :8/17/1999,944,2636,1357,1216,469,54%,7% :8/18/1999,939,2648,1330,1216,490,54%,7% :8/19/1999,979,2643,1368,1181,461,55%,7% :8/20/1999,960,2652,1336,1188,489,55%,7% :8/23/1999,946,2658,1353,1194,477,54%,7% :8/24/1999,964,2706,1321,1179,470,55%,7% :8/25/1999,1016,2731,1293,1140,455,56%,7% :8/26/1999,1026,2674,1338,1121,474,56%,7% :8/27/1999,1009,2735,1307,1123,462,56%,7% :8/30/1999,965,2704,1380,1125,460,55%,7% : :Robert : :- : - - ------------------------------ Date: Mon, 30 Aug 1999 10:04:27 -0600 From: Jeff Salisbury Subject: [CANSLIM] The risks of online trading (8/29/1999) Greetings, I read a provacative article over the weekend regarding day-trading over the internet. I submit it for your consumption and comment: http://www.mercurynews.com/business/top/017081.htm Regards, Jeff - - ------------------------------ Date: Mon, 30 Aug 1999 20:29:08 -0800 From: "Patrick Wahl" Subject: Re: [CANSLIM] King Date sent: Mon, 30 Aug 1999 06:43:58 -0700 From: > Also earnings growth has been very strong this year with upside surprises > every quarter. However, Yahoo is only projecting 20% growth the next five > years...so the analysts following this stock appear to be expecting a > significant earnings deceleration from current 40 to 80 % numbers. This may or > may not occur, but I like to see those expectations a little higher. It may > all depend on what is driving the current growth ie, internal or thru > acquisition. I don't always trust these analysts (in fact, I almost never trust them, unless its something like Abbot Labs, which they nail every quarter). I noticed there were only 3 analysts covering KING, and you can see by the size of the earning surprises that they don't have a good handle on what the earnings are going to be. - - ------------------------------ Date: Tue, 31 Aug 1999 07:36:20 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] The risks of online trading (8/29/1999) Pretty good article, Jeff, and a good assessment of the securities industry. What was not said is the impact of the Order Display Rules, which now makes it possible to trade Nasdaq stocks within the spread. The real impact of this set of rules is shown by the vast number of market makers who either ceased making markets entirely, or dramatically reduced the number of stocks on which they made a market. The loss of that revenue from trading the spread has directly led to them seeking other revenue sources, including both increasing online trading opportunities for individuals, as well as encouraging those individuals to trade frequently. Tom Worley stkguru@netside.net chat with me at ICQ # 5568838 get ICQ software at http://www.icq.com/icqhomepage.html - -----Original Message----- From: Jeff Salisbury To: canslim@lists.xmission.com Date: Monday, August 30, 1999 12:09 PM Subject: [CANSLIM] The risks of online trading (8/29/1999) Greetings, I read a provacative article over the weekend regarding day-trading over the internet. I submit it for your consumption and comment: http://www.mercurynews.com/business/top/017081.htm Regards, Jeff - - - - ------------------------------ End of canslim-digest V2 #689 ***************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.