8/04/2009

Why when it comes to trading, profiling is good



Currently profiling is in news and limelight. In the US the mere mention of word profiling has bad meaning. Racial profiling is the use of racial characters to determine how a person is likely to behave or to form conclusion about that persons occupation , income or likelihood of committing crime or buying products or services. There are laws banning racial profiling. But everyone in US , blacks, white, Hispanics, Chinese, Jews, Indians, or Koreans all get profiled in some way or the other. So police stop black driver more than white drivers, because based on past patterns they believe the likelihood of finding weapons or drugs is higher If there is a case of serial killing police starts looking for white lonely middle aged male. If you have to find an Indian in unknown city in USA, your probability is higher if you just find the nearest Dunkin' Donuts or Motel. If you see the flirting behavior in bars all around you it is also based on profiling. So using few pieces of information or past patterns we can quickly decide likely behavior of a person.


In reality profiling is all around us. Profiling is prevalent in all cultures. It is a deeply entrenched human behavior. In a world full of complexities it is our way of simplifying the world. It is more efficient way to handle information. It is based on past patterns we have seen and experienced. One of the biggest benefit of profiling to us is in improving our ability to make quick decision. That is why when it comes to trading profiling is good thing.
To quickly make a buy or sell decision or how much to risk on a trade decision in a fast moving market we must have "profiles" of:
  • "good stock"/""bad stock",
  • "lottery ticket stock"/"high conviction stock"
  • "growth stock"/"value stock"
  • "turnaround stock"/"cyclical growth stock"
  • "100% plus mover stock"/"50% plus mover stock"/"20% plus mover stock"
  • "junk stock"/"keeper stock"
  • "one month hold stock"/"one quarter hold stock"/"hold for a year stock"
  • "Chinese Stock"/"biotech stock"
If you have such profiles thought through based on historical behavior of stocks then you can make quick trading decisions. The effort involved in developing these profiles is one time effort. Once you develop, study, and internalize and embed such a profile in your brain, decision making is a snap. Given few pieces of information then you can make a quick decision. For example based on "biotech/drug stock'' profile when I see one in scan, I don't even bother to look at earnings or fundamentals, first thing I look for is whether there is a 250 million plus upfront deal with big pharma company. Or if I see a Chinese stock moving I know it is good for at least a 5 to 10% move.
Based on my past experience and study of the markets history I have such profiles embedded in my mind so when I see a stock reflexively I am trying to match it to right profile. Most of the time based on few pieces of information I would have profiled the stock in one slot or the other before I even look at earnings or news. This allows for quick ranking of opportunities, it speeds up information collection, and it improves speed of getting in and out of trades.
All successful traders use similar profiling techniques. Some are conscious of it and some are unconsciously doing it. If you study the process of expertise building in any field, it is more or less same. When you are novice, you have very few patterns or profiles of situation in your mind, as you develop expertise you have more and more such past patterns or studied patterns embedded in your mind as a result two things happen: first given a situation a novice might consider say 4-5 factors for decision making while a expert will bring in 1000's of factors to same decision making process and second the novice will take longer time to make a decision while expert will take less time.
Now if you spend years in trading you will gain such expertise or trading wisdom . But then it might be too late and costly way to gain expertise and wisdom. Like Og Mandino says about experience and wisdom : experience and wisdom is overrated usually by old men who nod wisely and speak stupidly. "In truth, experience teaches thoroughly yet her course of instruction devours men’s years so the value of her lessons diminishes with the time necessary to acquire her special wisdom. The end finds it wasted on dead men." The trick is to develop such expertise rapidly and systematically.
To do that you need to build profiles of kind of opportunities you want to find in your trading and document them and trade using those profiles. One such example of such a profile is :continued


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 sites that offer free trial 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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