Technitrader - Running Diary

DVDs 5, 6 & 7

Well, it's been a crappy week filled with flu, holiday parties and a lot of work. Still, I was able to watch a few more dvds along the way. Since I'm behind on these posts, I'm gonna do a fairly condensed summary of 5, 6 & 7 (I'm dropping the f/k/a moniker, mainly due to laziness). I've seen people talk about watching all the dvds twice or three times before starting to paper trade, but honestly, I think that I'll probably just watch them the one time. Between watching the dvd, rewriting my notes into an outline and reviewing all the prior outline material each time I add notes (plus these postings), it's probably taking me 2 or 3 hours for each dvd. Plus, I really think I'm getting more out of it by doing the note taking and outline creating than I would from just sitting and passively watching the dvds 2 or 3 times, though that probably isn't a bad method either.

Dvd 5 continued on with indicators and got into regression lines a little bit. I consider myself to be of at least average intelligence and this stuff is by no means easy. On top of that, they provide a lot of info, but they fly through it. I'm constantly stopping and starting the dvd player to take notes or to back up and try to understand just what Martha was explaining. This stuff could be a real mind bender for some, especially if you're not a naturally "technically minded" person. The wrap up of indicators took up all of dvd 5. The big point here was that indicators are ONLY to be used to back up or tear down a buy signal and should NOT be used as buy signals themselves.

Dvd 6 started with a little pep talk by Martha about how everyone feels overwhelmed at this point and how it's like driving a car. Feels super fast and confusing at first, but very quickly becomes second nature. Phew! Was nervous there for a few. . .

In this dvd we learn how to go back and caculate how long an upcoming run might last and what kind of point gain we might expect from it. This was followed by some retracing and summarizing of where we've been so far and how it all fits together in your nightly stock picking. They do this a lot and it's a good technique because sometimes you can't see the forest for the trees, so to speak, and it's nice to hear Martha or Howard go back and tie it all together. There was some explanation about chart history and how you have to go back and figure out what different trendlines, buy signals and indicators have meant to a particular stock when they happened in the past. Makes sense, right? Some discussion of splits and how you can make money on them, but not in the way most amateur investors think you can. (mainly you do it by taking advantage of those amateur investors' ignorance. sorry guys.) From there, it was homework time. Homework consisted of going through some charts, picking your stocks, calculating buy stop limit prices and explaining why you chose the stocks. Basically a little trial run of what you would be doing every night. Afterwards, Martha walked (ok, she ran) through the charts and talked about which ones were good, which were bad, and what would have happened had you bought them. I did ok, but did miss one of the really good ones. You'll be happy to know that I remained emotionless about it though. The Martha3000 would be so proud! (wait, is proud an emotion? ok, then maybe she wouldn't be. . .)

The rest of dvd 6 was a discussion by Howard about money management (what kind of share lots to buy, how to caculate your gains/losses, when to start buying larger share lots, etc.) and the different options that online brokers offer. I have to say that some of the money management seems kind of wacky. Some of it made more sense after a little explanation, but some of it still seems kind of weird. They're the professionals though, so I'm going to trust them for now. The point with online brokers is that they don't all offer the same things, and for us, some things are mandatory, such as buy stop limit orders and OSO order processing (execution of one order submits a second order).

Dvd 7

Dvd 7 starts with Howie talking about the different types of sell orders and when/why they should be used. Very similar to the buy order discussion, though, unlike buy orders, there are a couple of different orders that you can use to sell, depending on the situation. After that Martha spend the rest of the dvd talking about long term buying strategies. Very informative and very insightful. I'm focused on short swing trading, but Martha says that long term investing is where the real wealth (i.e. the kind that allows your grandchildren to become celbutantes) comes from, and I guess that makes sense. She also says that you really can't just short swing, you have to do both long and short term trading. Ok, ok, I'll do it. Not as s3xy, but I'm all about passing down a ton of wealth to my unappreciative grandkids someday (for the record, I don't even have a kid yet, so i'm not actually slamming on my grandkids), so I'll make that part of my overall strategy. We go through a fairly lengthy discussion of product cycles and how stock prices relate to the different points of those cycles. It was literally an entire semester of a business school class in about 35 minutes, and honestly, it made a TON of sense and was probably taught better than it is at your average business school. It certainly got me thinking more seriously about what industries are ripe for long term trading. My understanding is that you get a decent amount of help with long term trading in the emails after you've finished the course and began your trading.

Ok, so I kind of flew through all of this, but hopefully it's still somewhat helpful. At the rate I'm going, I'm hoping to be paper trading fairly early in January, so maybe these posts will get a little more interesting then. . .