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Timing

fkheng said: "How can I effectively time the market? What is the most practical way? What do I have to know?"

Airelon said: "Do you mean by "time" the markets - I'm assuming you mean effective entry and exit points? I'd need a little more information before I could offer any thoughts of my own. What are you looking for in the markets? [I]Investing[/I]? (Investing, you are looking at the company for well, just that, investing in the company itself. You buy a stock to own it. Not to trade it off 1 month down the road. [I]Trading[/I]? - basically just buying low - selling high? How long do plan to hold positions in the markets? Long, medium or short-term? What's your personality type? Believe it or not, this makes a HUGE difference. I'm a fast paced guy. So I trade 3-5 days. I go into a store, I want to be in and out in 10 minutes. I know what I want. Some people are incredibly patient and trade looking for entrances and exits in 6 months. Those are the folks who know what they need in the store, but have no problem hanging out for a while, seeing if anything catches their eye, etc. I'd drive myself batty doing that. To each their own. Those are the first sorts of questions, in my humble opinion - you need to look at when trading the markets. If trading is your cup of tea - do you have any background in trading based on "Fundamentals"? Do you have any background in trading based on "Technicals"? (I suggest both) ??"

fkheng said: "yes, by timing the markets, i mean knowing when to enter and exit. if you ask me what i mean by investing (investing v trading), i am looking more at investing, coz i work and i doubt i'll have the time to trade on a 3-5 day basis...unless someone can tell me of a way to work and trade at the same time! well, i am aware that holding positions over long term are virtually useless in a secular bear market. i am still trying to set an investment strategy for myself, so i'm not sure whether holding long, medium or short term would be appropriate. i appreciate any help and advice. as for my personality, if i know what i want, i'll do it...but before i can know what i want, i need to know what stocks i want, and so that's the problem. in order to be practical, i can't analyse stocks on a daily basis. and i do not feel safe entrusting my stock investments into the hands of biased advisors. i have studied a little of fundamental analysis (using the DCFF model), how much fundamental analysis should i know? i am also planning of reading technical analysis soon...however, is that useful if i'm not looking at trading? it would be good if we could discuss further...i'm sure you'll be able to offer me better insights into becoming a stock investor...as i am beginning, please bear with me! thanks..."

Airelon said: "Well, I don't invest my assests [I]too[/I] much. I just decided on a percentie, and work towards that. So I do have a portion I will invest, but I primarily trade. When I do invest, it is usually in a sector that I know quite a bit about, such as Information Technology. Although I quite EDS some years ago ([I][SIZE=1]I was the first guy on scene to start supporting the network at GM's World Headquarters at the Renaissance Center, and one of the first four technicians to start supporting and administrating that entire network from the ground up[/SIZE][/I]) I still keep my ear to the ground. I know that field very well. When something good comes along, I will invest. I started putting money into Redhat as soon as the entire Redhat / Mandrake thing went down. We'll be seeing even more secure Open Source Unix / Linux servers as time passes. There are MANY reasons for that, not the least of which has to do with security issues. So I can't speak too much to investing however. I'd like to help you out there, but as to my day to day bread and butter, I'm a very short term trader. I can tell you what has helped me as far as trading, in the hope that some of the [I]principles [/I] will help, and then maybe I can talk a little bit about timing / entrances and exits. Basic principles that have helped me immensley: 1) Educate yourself. Always be willing to learn both from the markets, and from others. I have yet to come to a place where I say: "I know it all" and I don't think anyone else has either. There are as many ways to trade as there are people who are involved in the markets. 2) I do not believe anyone will ever hold the golden grail of trading / investing. Guys will always want to sell a "[I]sure fire system to make a bizzillion dollars in your first year[/I]". 90% of them are sheer crap. I've run across a few that are worth anything, and even then - many times they will try to present their ideas in such a way that "theirs is the only way" to make money in the markets. What they [I]are[/I] good for, is that they usually educate you as to basic principles behind the market, technical trading, or fundamentals. So for that aspect, they are great. That leads me to point 3: 3) Larry Williams once gave me the best piece of advice I've ever heard. [I]Develop your own "system[/I]" ([SIZE=1]I don't even like that word however, to tell you the truth[/SIZE]) [I]that works for you. Take tools (market timing tools as well as fundamental factors) that are available out there, and come up with ways to put them together in logical and new ways that fits your personality to understand how to make money[/I]. I swear to god, that is the truth. I've traded in just about everything, and if there is one thing that has helped my trading, it's that statement. 4) This is just my own feeling on the matter when it comes to trading (This may not affect those who primarily invest) . . . Expect to pay some "tuition fees" in the form of "learning mistakes". Took me 3 years before I started making good headway, and another 2 before I had paid back all of those "tuition" fees and made substantial progress. Yeah, you have to invest according to your circumstances. If you can't keep an eye on the the markets - that can be a bit dangerous. There is a way to deal with that, especially on a 4-5 day basis, but it takes some education into the markets. If you are going to buy into a company, and then watch ([I]or even want to watch[/I]) it's every single tick - I'm telling ya - long term investing isn't for you - regardless of circumstances. If you can buy into a company, and then keep track of it's closing price every day to every other day for observation purposes without any emotion involved - then it can be - as long as the principles of [i]Money Management[/i] are learned and adhered to."

Airelon said: "So . . . timing. . . :) First thing I do with the fundamentals of any markets - is screen a lot of factors. If you're looking for something for free - I think Yahoo has one, and Microsoft has a nice free one available for download that you can run off their site here: [url]http://moneycentral.msn.com/investor/research/welcome.asp[/url] Go down to stock screener, download the deluxe screener, and set it up how you wish. Once you have all of your screens in place, some stocks screened out, then finally selected by you - you can look for your entrance. At that point, is personally when I turn to technicals. Again, that's just me - and I don't like to take the position that you should do exactly what I do, or tell you how to invest your money. But technicals, at least to my way of thinking, is completely where it's at when it comes to TIMING only. With what I know now, I could never in a billion years imagine trading due to technicals. You trade because of fundamentals, and decide HOW to enter with technicals. How familiar are you with the basics of technical entrances and exits? Again, no need for apologies or to "bear" with you. Happy to help in any way I can. Just remember, I can't guarantee you anything I say will work for you or make you money. I look to help, but . . . well . . . I think you know what I mean."