I'm sure most of you know this--Good reading from Yahoo finance

bearNbull said: "Investor's Business Daily Don't Get Shaken Out Of Extended, Good Stocks Friday September 1, 7:00 pm ET Marie Beerens It's one thing to find a good stock, it's another to buy it at the right time. The last thing you want to do is to get into a position when the stock is extended above its buy point. If it happens to pull back -- and even the best ones do -- you could be shaken out of your position, missing out on future gains. Therefore, always buy a stock close to the buy point of a sound base. You can determine the buy point by adding 10 cents to the left top of a cup base, the highest point of a handle or the midpoint of a double-bottom base. When in doubt, try to pick the lowest possible buy point. When you buy a stock correctly, even if it pulls back, it should provide you with enough cushion to weather some volatility. If it does sink 7%-8% below your cost, then you would be well advised to sell. In this case, you would be limiting your losses as the stock turns out not to be the winner you had hoped for. It's better to sit out the storm and put your money to work when it presents you with another buying opportunity. If you bought an extended stock, the slightest volatility could hit your 7%-loss rule, pushing you to sell. Wouldn't you rather have some gains than sell at a loss? To keep this possibility, be prudent with your money. You will preserve your capital and your confidence. If the stock pulls back after you bought it at an appropriate buy point, sit tight, watch it and see if it's a temporary pullback or a major decline. If it continues to fall, cut bait. If it rebounds in brisk volume, you may end up with a big winner. Tower Group (NASDAQ:TWGP - News) went public in October 2004. After several basing attempts, the New York-based insurer formed an 11-week, first-stage base-on-base between August and October '05 (point 1). The stock then proceeded to break out above 16.24 on the heaviest weekly volume since its IPO (point 2). But let's say you really liked the stock and jumped in at 18 (point 3). After going up for one more week, the stock suddenly reversed lower, hitting a low of 15.37 (point 4). Such a sharp decline would have certainly shaken you out of your position as the stock fell 15% from your cost of 18. But if you had purchased it close to 16.24, you would still be holding it and well-positioned for the stock's next run-up. Tower Group has since surged 81%. [FONT="Fixedsys"][/FONT] [SIZE="3"][FONT="Arial Black"]Short and precise and it's very logical. This is a good one for Newbies like me.:)[/FONT][/SIZE]"

Rbreb13 said: "TWGP Thanks for the pick. I love stocks that channel like this one is. $26-$32 and the channel is narrowing. Sooner or later it will break this channel either up or down (long or short). The triangle its forming is getting tighter so a breakout is coming as it starts to consolidate. Moving averages are converging also."

JAP said: "Yahoo finance has some great articles, but Suzy Orman's anti-male retoric has to GO! Does anyone here ever watch her CNBC show? She tells wives to [I]divorce[/I] their husbands so that they can get half... their fair share. :mad:"

hminhas said: "I have found there is no sure way to make money by reading graphs. There are just too many variables. I just go for stocks that are selling for low for the wrong reason. And then just wait it out. H Minhas TheMarketWatch.com"

hminhas said: "I watched her show few times but never thought she would make a suggestion like divorcing for the sake of just getting half. She is always saying how people come first, than money and than needs or something like that. H Min TheMarketWatch.com"

JAP said: "Regarding IBD: The main thing I noticed about IBD is the only time their strategy works is when the market is in a rally. Their methodology does not apply in a bear market."

thezster said: "Sounds like "buy low - sell high" to me. Which, as you all know, is the entire point of this exercise....."

hminhas said: "I like their sector tracking technique. It gives you an idea about what sector is getting hotter and which one is cooling down. You can use this even if you are a contrarian investor and want to buy low and sell high. H Min TheMarketWatch.com"

Crazy Trader said: "Okay, so how do you analyze all of that data. I find it downright scary sometimes when I approach all of the data that is available. My day job is problem solving in engineering and I am no slouch with a PC but trying to analyze all the trends and the information available actually scares me a bit. Do you take them one at a time until you find a likely suspect or do you have a super-computer with a magic program that narrows your pick for you?"

SporeMonger said: "[QUOTE=Crazy Trader]Okay, so how do you analyze all of that data. I find it downright scary sometimes when I approach all of the data that is available. My day job is problem solving in engineering and I am no slouch with a PC but trying to analyze all the trends and the information available actually scares me a bit. Do you take them one at a time until you find a likely suspect or do you have a super-computer with a magic program that narrows your pick for you?[/QUOTE] Read a book lately? Reading a book on trading/investing can really add to your neural network, considering that you are a problem solver. Every book that I read gives me new insight and allows me to see things in a different light. Pick a stock using a good screener, curious pick from anything you run into, word of mouth, etc. Concentrate on one stock at a time. I like to glance at the chart to see where it is, uptrending, sideways, downtrending. If it looks like a good buy in point, I dig deeper. Examine one stock at a time. Never be in a rush to jump on anything! (like me). Give that stock at least 1 hour worth of research. Look to see if you agree with what the company does (can it make money in the future), who are its competitors, what is its growth rate compared to other like companies and its index, look at the other fundamentals as well. Never buy 2X its growth rate. Now, if everything satisfies you about the stock, go ahead and look at its chart again. I don't advocate chart reading, but I do believe that curtain patterns DO increase your chances of success. But technicals do not matter in the long term. There are too many variables. Daytraders and even swingtraders can use them, IMHO. There is no magic program just your brain and whatever else you can utilize. If you care to use a program or site to help you trade, good luck. The way that I look at it is like this. I can try to make money on my own, and if I take on a loss, I can tax-loss harvest and get some money back. Or maybe some program can make me money, but I have to spend $400 a year on it (Or whatever) and can't even claim that money on my taxes, only my losses. I rather try it myself. The other benefit is that I'll learn something from my loss. :cool:"

thezster said: "[QUOTE=SporeMonger] Or maybe some program can make me money, but I have to spend $400 a year on it (Or whatever) and can't even claim that money on my taxes, only my losses. . :cool:[/QUOTE] Ah, but remember - you can deduct that cost as a trading expense....."

SporeMonger said: "[QUOTE=thezster]Ah, but remember - you can deduct that cost as a trading expense.....[/QUOTE] Thanks, I did forget. How about books?"

thezster said: "[QUOTE=SporeMonger]Thanks, I did forget. How about books?[/QUOTE] Depends on your outlook. I always do my taxes twice. The first time is exactly as Uncle Sam would prefer I do them. The second time I take every deduction I can find, even the questionable ones. Then I compare the difference on my taxes. The worst that can happen is an audit - and the questionable deductions disallowed ... at which time I pay the taxes on the difference and any penalties that come with it. Let's just say... I've never paid any extra taxes... or penalties.... though I'm up for an audit right now... on last years return... :("

SporeMonger said: "[QUOTE=thezster]Depends on your outlook. I always do my taxes twice. The first time is exactly as Uncle Sam would prefer I do them. The second time I take every deduction I can find, even the questionable ones. Then I compare the difference on my taxes. The worst that can happen is an audit - and the questionable deductions disallowed ... at which time I pay the taxes on the difference and any penalties that come with it. Let's just say... I've never paid any extra taxes... or penalties.... though I'm up for an audit right now... on last years return... :([/QUOTE] Thanks again. I hope things go well with the audit for you."