Thursday, December 15, 2005

Kirk Report on improving watch list research

The Kirk Report had a great article today about reviewing the biggest winning stocks each year to see where you could improve your methods for identifying and making money from them. This is something that I have also been doing more than usual lately. The description I made for this blog when I started it over a year ago is about that exact subject: "Talk about stocks that are in play, and strategies for taking $$$ out of them." I've thought about changing this description many times, but I always change my mind because this blog chronicles my quest to make audacious returns from the best stocks the market has to offer.

After reading Kirk's post, I did some personal assessment. NTRI was the best performing stock of the year according to Kirk's scan. Well, I bought it on April 7'th, and you can read about how I played it here. It is kind of embarrassing to read this post now. The first stock I bought long this year was the biggest winning stock in the market! I knew it would be very good, but I did not expect it to be the next TASR. After buying near $6 and selling for a quick gain near $12.50, I bought NTRI again months later at a much higher price when it broke out from $32, but this time I'm not selling it so easy. The reason? I've looked back on charts like AAPL, GOOG, NTRI, CERN, SNDK, and the dozens of other stocks that have been in great uptrends this year. Finding the best stocks is easy for me, but making LOTS of money from the trend is so much more difficult for a lot of complicated reasons.

My reflections lately have really hammered home the idea that betting on the resillience of uptrending stocks pays so much more than betting on rare crashes and trying to outperform even these wild uptrends by trading in and out of them. This idea by itself was not enough though, it wasn't until I visualized the expansion and resulting volatility of my trading account with positions that had tripled and quadrupled while I pyramid into them with margin that I was ready to advance from a swing trader to a trend follower with a much longer time horizon and insensitivity to the day-to-day fluctuations.

Earlier this year I read Brad Koteshwar's book The Perfect Stock. Among other things, the book talks about a disciplined trend follower's trades in TASR. I highly recommend this book to anybody interested in trend following. It is another one of the great trend following fables like I talked about a couple weeks ago.


At 11:07 AM, Blogger Spencer Toth said...

Fickle Trader, I love reading your blog. After talking to Yee Sian, he gave me the link to it. Keep it up man.

All the best,

At 12:23 AM, Blogger jontait said...

Thanks for the positive feedback :D

At 5:09 PM, Blogger Hiren said...

Thanks for the information about the book.


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