Much to cover today, and not a lot of time to waste with me gabbing. Let's get started.
Did you want them to succeed or to fail? That is, the erstwhile market forecasters
I profiled here in September: money manager Vic Castroll, 25, who also runs a trading system service, and the
duo, its president, Elizabeth Seger, 24, and vice president, Chris Brown, 23.
And, by the way, I know full well most of you were definitely in one camp or the other. I certainly heard from the "what could they possibly know" crowd, who, for whatever reason, was hoping they'd wind up in a trash heap somewhere.
Less vocal, but still present, was the "hey, I hope these kids are onto something" group, many of whom signed up for free trials with either Vic, MarketBeacon, or both.
Technical Analysis: Join the discussion on
Well, whatever camp you're in, there's something here for everyone. Read on, but remember: I'm neither touting nor slamming either of these parties. I'm just trying to delve into new areas and present new ideas. The final decision, as always, is yours.
As a way of assembling data, I thought it best (and frankly easiest) to let each party describe their progress to date. The data track with what they've been sending me all along and are current as of Friday, Oct. 22. Also, in the interest of fairness, I counted only signals that started since the first column ran in late September. MarketBeacon actually had a superb summer, and Vic may have as well. But for today, just the recent results.
First up is our friend Vic, who can be reached at
firstname.lastname@example.org. Vic also wanted me to pass along that his Web site has been upgraded. You can get there by going to
Brother, can you spare a trend? A trend!!! I need a trend!!! Here is my performance over the last month. -- Vic
Next up, our young entrepreneurs from MarketBeacon:
Gary, Here are the latest performance figures for MarketBeacon, as of the close today. Our last two trades met with equivocal results, which caused us to remind our subscribers that not every trade is going to be a success. (For example, on Aug. 11, 1997, the MarketBeacon model forecast went "long" and the S&P 500 lost 3.9% in four trading days. And on July 23, 1998, the forecast went "long" and the S&P 500 lost 5.9% in eight trading days.) Given how few trades our model generates in a year, we also decided it would be wise to extend all of our "30-day" free trials until Dec. 31. We still believe in our model and want as many people as possible to see it work well. -- Elizabeth and Chris
So, conclusions? A few. One, the numbers speak for themselves. They stink. Two, a month is a short time period. In any random 30 days, I have a few stinkers myself. Three, trading and market forecasting is tough. Damn tough.
'Nuff said. We'll revisit Vic and MarketBeacon in the coming months!
Fundamentalist, chartist or both?
Gary, That Don't Sweat the Market piece was great, the questions I was asking myself and was wanting to ask you as well. Digging deeper into this question, if you suggest forgetting about the market, what about news concerning your stock? If your stock suddenly has a big move down or up, do you go and read about what's driving it? What I find really difficult is to balance being a chartist and a fundamentalist. When you're at the extreme ends, that's fine. But if you're in between, it gets difficult. I like to look at charts to get in and out of stocks, but to buy a stock, I'm just more comfortable doing research and knowing about the company beforehand. Hence, major news regarding my stock concerns me more than the chart at times, while in other cases, the chart tells me something else. This just gets confusing and doesn't seem to work effectively most of the time. I don't think I'm alone (at least I hope not) in this predicament, and would like to ask for your diagnosis of the problem I'm not seeing. Should I just stick with being a fundamentalist or a total chartist? Am I simply not taking the plunge? -- So Santoso
This is a question I get a lot, so I decided to address it yet again, but this time in the larger setting of this Monday column.
First off, there is no right answer. You can rely totally on fundamentals, totally on TA, or anywhere in between, and make an excellent living in the market. The hard part, as So points out, is that area in the middle.
And the difficulty boils down to two factors. First, where do you draw the line on how much fundamental analysis to use? (Or, how much TA to use.) Really, what is "major" news? Earnings probably are, but what about earnings "guidance"? How about a major product announcement? A joint marketing agreement? A lawsuit?
See, it starts to get tough to discern what's important and what's not. In short, it's the very problem technicians wrestle with. That is, the relevance of a lot of news falls into the subjective category. Much like trend lines are subject to discretion, figuring out what news is important and what's not essentially becomes discretionary.
But, if you do have a handle on what's important and what's not, So raises the issue of what to do when they're in conflict. Well, I don't know the answer to that. That's the cost, I suppose, of trying to marry two different disciplines.
The best advice I can give is this. It is extremely difficult to trade over the course of many years, with a complicated, subjective set of rules that require constant interpretation. The tendency for most of us is to make our trading more and more complex in the hope of "covering all the bases." In reality, though, you will be much happier and less conflicted by continually striving to make your trading simpler. However, the definition of "simple" is up to you. Find the answer, though, and you will be one step closer to becoming a great trader.
Laptops. Yes, I received a number of questions recently on what I employ and why.
So, for the record, I use an
iSeries laptop, model 1411. Why a laptop to begin with? Because I've found that I'm a lot more productive when I have the ability to work anywhere, anytime, without being confined to my desk (as an example, this column is being composed poolside at 5:48 a.m.).
Therefore, I wanted a laptop that essentially replicated my desktop machine: 14" screen, CD-ROM, diskette drive, modem, 64 MB RAM, all part of the same machine. I just shut down, put my laptop in the bag, and I can trade and write from anywhere.
The other question, though, is why IBM vs.
? That's an easy one: I grew up with the Trackpoint cursor and find the touchpad technology used by Dell and others to be cumbersome. Really, no other reason for choosing Big Blue.
So, that's my answer, but I really don't do the entire laptop discussion justice. However, the excellent Walter Mossberg of the
does, and in a
recent column, he described exactly what you need to look for in your next laptop.
And that pretty much empties my in-basket of all questions that needed emergency answers! Still working on those non-911 queries.
Gary B. Smith is a freelance writer who trades for his own account from his Maryland home using technical analysis. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Smith writes five technical analysis columns for TheStreet.com each week, including Technician's Take, Charted Territory and TSC Technical Forum. While he cannot provide investment advice or recommendations, he
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