4/03/2007

Methods trump markets

One of the things which you learn after spending few years in market is that the day to day news and New York Times headline or conventional wisdom in most cases is priced in by the market. So when you read slowing economy, sub prime bankruptcies, China trade wars, inflation, Iran adventures, and so on and start trading based on it. You are likely to find very little success. In fact you might have to give up trading and find job with NYT to join in with the doom and gloom party.

The market price cycles and news price cycles never match. That is why the market is said to climb a wall of worry. The money making opportunities exist because the news and bearish analysts create a distraction for most average speculators. While majority are busy waiting for the doom to take the market down, the market acts contrary to expectations and offers bullish opportunities.

If you think about it and contemplate why it happens, you can pretty much figure out the information lag between large speculators and small speculators. Take for example the sub prime news, you can be rest assured the big banks and smart speculators were aware of it months in advance and had already acted on that information.

The other more interesting thing about the market is that it offers varying degree of opportunities to different set of speculators for same time period, depending on their skills and methodology. That is why rather than focusing on the markets you should focus on the methods. The markets are not controllable, but your methods are. None of the methods I use like Episodic Pivots, 100% plus, IBD200, or Earnings breakout changed during or after the market correction. Post correction the same method continue to bring opportunities to table. A significant one time effort in putting together a structured and well defined method can pay you long term dividend. I watch with great fun, how traders flirt from one methodology to another. Putting together your conveyor belt of ideas once is the key. You can tinker with it a bit but the structure should be in place to bring opportunities to you on daily basis.

If your method differs depending on whether it is Monday, Tuesday, or Wednesday, you may simply have no methods. Or your method consists of running 32 different scans, probably you have no defined method and no way to prioritize market opportunities. Or if your method gets influenced by what you read or what Buffet does, or what Soros does, or what some growth or value manager puts in his portfolio, you have no method of your own. Even worse is if you are following someone else who follows such half baked approach. Lot of activity is not a profitable strategy. Worse is if you are paying for following such person.

Just defining one method in detail and following it day in and day out can help beat the market noise. Choice is a big problem in the markets.Few want to define and trade one method. Every week I get emails from people wanting to learn one of my methods in detail.My message is same just master one method thoroughly and see the results for few months , then go to another. It is my experience so far that 99% within two or three weeks are in search of new method or get excited by something else and go chasing after a new method and new opportunities. It takes around six month to master one strategy., if you do not commit that much resource to a method, you seldom find good results. Brownian motion is a big problem for unsuccessful traders.

Later I will have more on "Why choice is a big problem"





Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.




What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading site that offer free trail or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.


How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.


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    2 comments:

    65Trader said...

    Great post pradeep. I think it takes a while to find a system that fits your personality and one that you trust enough to trade it consistently without doubt. Unfortunately, I dont think you get this confort level with a system until you have spent blood sweat and tears on it.

    What works for one person may not 'fit' another person. I agree, alot of traders switch from one thing to the next. This becomes exhausting after a while.

    Pradeep Bonde said...

    Thanks.

    The problem for many new traders is they should still have capital left to trade by the time they figure out profitable method.

    But this problem is not only restricted to new traders, I have seen many traders who have been trading for many years and still basically following whatever is hot for the day or week or month.