No bull investing straightforward advice_10 docx

Practice Chart 3 Can you spot the signal or signals on this chart? Were they buy or sell signals? Was there more than one signal? What happened after the signal or signals? Is trading vol- ume an issue? What is the current condition of this stock? Is it about to give a new signal? Is there something about this stock that might have prevented you from investing in it? 198 APPENDIX Practice Chart 4 Can you spot the signal or signals on this chart? Were they buy or sell signals? Was there more than one signal? What happened after the signal or signals? What is the current condition of this stock? Is it about to give a new signal? APPENDIX 199 Practice Chart 5 Can you spot the signal or signals on this chart? Was there a good indication that this stock was destined to top? Can you find the sell signal? Were there other signals? What happened after the signal or signals? What is the current condition of this stock? Is it about to give a new signal? ANSWERS TO PRACTICE CHARTS Here are the answers to the practice charts. Take your time and carefully read my commentary and analysis. 200 APPENDIX Practice Chart 1: Analysis The chart shows price making a new low in October, while MOM did not make a new low. There- after, the BUY POINT was penetrated and the stock would have been bought. The result was higher prices. Although MOM has not moved appreciably higher, there has been no MOM sell sig- nal and, assuming you followed the rules, you would still be in this stock with a stop loss to manage your profit. APPENDIX 201 Practice Chart 2: Analysis The chart shows price making a new low, while momentum was moving higher. This was a setup for the buy point, which was triggered in October. A move to higher prices followed, as you can see by my notes on the chart. As of the end of this chart, prices were making new highs, while momentum was moving lower, setting up a sell signal. 202 APPENDIX Practice Chart 3: Analysis The chart shows price moving lower, while momentum is moving higher. This has set up a po- tential buy signal. However, there is a problem. As you can see, the trading volume (number of shares traded daily) is very low. And this could be problematic. The low volume would cause me to stay out of this stock. APPENDIX 203 Practice Chart 4: Analysis The chart shows price moving lower for a lengthy period of time, while momentum was moving higher. This set up a buy point, which was penetrated and yielded a buy signal. The result was higher prices. Currently, price and MOM are moving lower, which is a normal situation. Based on the sig- nals, the investor who owns this stock would be using a stop loss to lock in a profit in the event that the stock declines. 204 APPENDIX Practice Chart 5: Analysis The chart shows price making a new high, while MOM was moving lower. This was a setup for a sell signal at the indicated sell point. As you can see from the chart, the stock declined sharply and currently remains in a de- clining trend with no indication of a bottom as yet. APPENDIX 205 [...]... scandals, 28, 63, 104 Bullion coins, 163–72 Bullish divergence, 113, 114–17 Business publications, 72–73 Buying orders, 47 Buy signal, 117 C Capital, starting, 24, 58–59, 90–91, 183 Charts, practice, 121–28, 195–205 Children, 25–26 financial issues and, 38–40, 76–77 investment research and, 43 whole life insurance and, 37 CNBC analysts, 69–70 Coins and precious metals, 159–72 gold and silver bullion, 164–65... 168–72 liquidity of, 164, 171 platinum and palladium bullion, 165–66 protecting yourself with, 162–63 shopping for price, 167–68 storing, 166, 172 strategy, 161 when to buy, 166–67 College expenses, 39–40, 76–77 Commitment, 23, 25–26 Commodity trading, 8, 190–91 Communications technology, 179 Computer(s) investment and, 29–30 neural networks, 178 technology, 178 Confirmation, 87 see also Timing method... programs (DRIPs), 151 Dollar cost averaging, 60, 146–51, 154 bullion coins and, 167, 172 mutual funds and, 146 by price, 147–49 by time, 149–51 Dollar risk stops, 121 Dow Jones Industrial stocks, 148 E Economic cycles, 11, 187–91 boom and bust cycles, 190 government and, 189 origin of trends, 185–86 stock/commodity price history and, 190–91 Economic determinism, 185–86 Education expenses, 39–40, 76–77... shoestring budget See Shoestringbudget investments significant capital and, 157–75 stock market and, 138 success factors, 51–53 vehicles, 136–37 Investor psychology/behavior, 45–54, 181–87 economic determinism, 185–86 economic trends and, 186 emotions and, 184 instant gratification and, 186–87 profit/loss variables, 182–83 successful investment factors, 51–53 J–K Jackson, Michael, 143–44 KISS, 16 Living... 109–12 calculating, 111–12 divergence/changes in trend, 112–17 market indications and, 112 normal conditions for, 110–11 Momentum Stock Selection (Bernstein), 106, 121, 158 morningstar.com, 155 Moving average, 149 Mutual funds, 28, 136, 146, 183 children and, 38 dividend reinvestment programs and, 151, 152, 154 load vs no- load funds, 154–55 N–O L Leverage, 136, 140 Life insurance, 35–37 Livermore, Jesse,... INDEX Online businesses, 56 Online references/resources, 30, 75–76, 120, 153, 155, 180, 207–8 Organization, 26–27, 62 Overtrading, 51 P Palladium bullion coins, 165–66 Partnerships, 22–23, 27 Patterns, historical, 11–12, 84–85 Persistence, 52, 64–65 Platinum bullion coins, 165–66 Practice timing charts, 195–205 analysis of, 200–205 Precious metals See Coins and precious metals Price, buy/sell behavior... Reminiscences of a Stock Operator (Lefèvre), 8 Revocable trust, 41 Risk/risk management, 19–21, 121 Rumors, 60–61, 70–71, 95–96 S Scale investing/ scale trading, 147 Sector expert, 105 Security stocks/companies, 179 Self-control, 65–66 Self-discipline, 65 Self-employment, 56 Self-knowledge, 45–54 Selling orders, 47 Sell signal, 118 Setup, 93–94 Setup, trigger, and follow-through (STF), 92–99, 116 examples,... www.trade-futures.com (for futures trading information) www.2chimps.com (for short-term and day trading information) www.yardeni.com (sometimes a little radical but a good information source on stocks and economic forecasts, trends, etc.) I N D E X A Action, 49, 87–89, 91, 92 momentum and, 114 premature, 93–94 Alternative energy, 178–79 Analysis paralysis, 49 Analysts, 28, 68–70 Analytical thinking, 184 Artificial... stock/commodity price history and, 190–91 Economic determinism, 185–86 Education expenses, 39–40, 76–77 Emerging markets, 177–80 Emotion, investment and, 60, 184 detachment, 52 fear and greed, 185 self-knowledge, 45–54 Energy, alternative, 178 Expectation, 13, 84–87, 114 F Fear, 46, 185 Financial advisors/planners, 74–75, 159 Financial goals, 24–25, 55–79 financial freedom, 135–37 losses and, 58 setting... future using, 90–92 setup, trigger, and follow-through, 92–99, 116 summary, 99–100 Genetic engineering, 178 Gold, 86, 97–99, 164–65 Granville, Joe, 60 Great Depression, 189 Greed, 46, 61, 185 H Hedge fund investing, 174–75 Historical patterns, 11–12, 84–85 momentum and, 113–14 How to Trade the New Single Stock Futures (Bernstein), 106, 136 I Impulse, 46 Income, disposable, 77 Inflation, 160 Insiders, 47–48 . Elliott, 10, 101 Bernstein, Jake, 4 10, 101 , 106 , 121, 136, 137, 160, 194 Biased expert, 104 Blind trust, 41 Brokerage analysts, 68–70 Brokerage scandals, 28, 63, 104 Bullion coins, 163–72 Bullish. Bernstein), 10, 101 , 106 Stock options, 136, 159, 174 Stock picker, 105 Stone, W. Clement, 144 Stop loss, 121, 153 Strategy, 183 T Tax considerations, 37–38, 75 Technical analysis, 158 Technology,. methods, 51 Momentum, 109 –12 calculating, 111–12 divergence/changes in trend, 112–17 market indications and, 112 normal conditions for, 110 11 Momentum Stock Selection (Bernstein), 106 , 121, 158 morningstar.com,