Stocks on the Move 18/4

US Indices, Commodities, ASX/200 and ASX stocks.
A shudder goes through the market at an important resistance juncture.
Gold falls, miners take stock, financials fight.
Cool heads make cool decisions. Are YOU prepared?

Moving Average Probabilities

The probability attribute tells us that if the average is rising and the price is above it this is a bullish sign.

Stocks on the Move 11/04

US Indices, Commodities, ASX/200 and ASX stocks.
The focus is the booming mining stocks.

The Price and Volume relationship is fundamental to price analysis

The price / volume relationship is fundamental to chart analysis and is part of the jigsaw that creates a powerful trading tool.

Trading the Trend

Trends occur all the time and being able to identify and ‘ride’ them profitably is a very attractive challenge for us all.

Biases, Perceptions and Poise.

Perspective and clarity

A share price is at the mercy of market sentiment and investors are often affected very much in their decision making by such emotions as anchor bias, and other such like confirmation, information, loss aversion and hindsight biases.

Definitions of these are readily available on the web and are recurrent examples of why investors make trading or investing mistakes and I discuss this in my YouTube videoMy 5 top tips for success on the stock market.

PGH example

So, using the example of PGH above I would think now many previous investors are somewhat shy (anchor bias) of investing back into PGH. Righty so maybe but you might remember the ‘emoji guide to investing I showed in last week’s Radar Newsletter (25/1/19) demonstrating the fact that the key to consistently successful investing is to be poised and maintain a balanced perspective no matter what the market is doing.

Looking through the haze

Right now, PGH investors are suffering but realistically having halved in price back to its initial starting price at listing and is now showing potential demand at this support level the stock must go on the radar again of starting to look valuable and having to potentialfor a turn back up. Not that I want a long-term investment because that’s not how I play the stock market, but these points can often be scrambling points when a change of sentiment can take hold and trigger all sorts of portfolio rebalances, short position exits and fresh ‘value’ buying etc. Looking at the stocks afresh with clarity and perspective can be hard because of our biases but that’s what we need to be able to do.

Focus on your own style

My style of trading and investing is looking for those types of investor changes that can trigger sharp price moves and new trends to capitalise on. PGH and many other stocks are currently in this position and over coming weeks I will point you to a few of these opportunities that this falling market has now delivered.

Bull or Bear?

Whether the ASX/200 rises of falls from here is to a large degree irrelevant when assessing individual stock performances. Yes, a rising market offers more opportunities and a falling market less, but still opportunities always arise in any market and this one is no different. Are we in a correction phase or beginning a new wave higher? That is always the eternal question. Don’t even try and answer it because you can’t and it’s simply a major distraction. Keeping a clear head is vital.

How to play it

Smart stock investors always remain poised and have the ability to have good perspective without biases and emotions. This will help your success rate immeasurably.

Sharpening your trading and investing psyche

I understand the mental battles we all have, having gone through them myself, but successful investors and traders all eventually understand two things very clearly.

What’s locked into your trading memory?

Here are five things we should always know to trade and invest successfully.

Stock charts. What do they tell us and how do they help us?

A picture tells a thousand words and as you know I am a visual person and that’s the reason I use charts.

Perspective and clarity

Charts sum things up beautifully. They collate, reflect, simplify, cut through the distractive and unnecessary crap and also tell us what to do and when. Stock charts tell us where the money is going. To a large degree accuracy and benefit will depend very much on the quality of the analyst and this makes me a realist and not a dreamer. I am always prepared to expect the unexpected. Charts however provide precise price information at any point in time and are a great help in telling us all we need to know to trade and invest successfully

Rumour or fact

They provide a complete collection of investors’ perceptions based on the information available and yes that information can be based on fact or rumour. That is unfortunate but it doesn’t actually matter; what matters is what moves the price and rumour and perceptions are a part of that.

Human behaviour and ‘traits’

Certain traits are reflected in this price movement and that’s a reflection of human behavior and if we can determine or read, how this behavior is going to play out it can be of great advantage. We can’t read every jump, jive and nuance but what we can look for is a general trend in that behaviour. It is this trend in behaviour that I capitalise on. It’s just like catching that big wave in the surf when it breaks, you ride the momentum of the wave until it subsides, and then jump off before it stops. Simplicity is the essence.

Building a plan

Markets behave irrationally so our involvement requires cool headed actions at all times and as a part of the Stockradar service we help investors understand the engagement process and how to respond appropriately to what the price action is telling us. What are you doing and what should you be doing right now? An interesting question as the market currently tosses prices around with abandon. By having a rule-based approach it makes the trading process easy by telling us what to do, and when, and at all times. Armed with this knowledge it will help you grow your awareness and ability to succeed as an investor and to achieve the steady growth in your equity which we all desire.

Two key clues

In the end it comes down to two things, common sense and control. By following our real time examples and understanding the psychological motivations of investors your market insight becomes switched on and responsive allowing a clearer path to your investing success. The stock market is a fun and challenging place. Come along for the ride you’ll enjoy it.

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Lightening strikes stocks

Funds plunge, and the Superannuation disasters led by our big ‘safe’ leaders in AMP and IOOF will affect many. Few are left untainted…….