In the MarketVision Chronicle, I write about five questions you need to ask of your trading plan, and a follow up on Bollinger Bands.
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The Bollinger Band Follow Up
Last week we spoke about Bollinger Bands and I’d promised to talk about a few stocks doing the rounds of M-Tops and W-Bottoms. Not too many stocks are reaching M-Tops (as in, the formation doesn’t seem complete for most.
But a number of them are showing strong W-Bottoms. One ofthem, DLF, is in here: 
You’ll notice that the W-Bottom isn’t very clear but we have seen some big volumes on Friday. The MACD line Is crossing zero – a key level – and at the same time the stock is approaching a resistance at 240. It would be interesting above this, but you will need to keep a stop loss of the 20 DMA or around 222.
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Five Important Questions To Ask
If you’re trading, or learning to, it’s important to have a plan. You can rush into trading or investing in any way you want, but eventually to avoid the ad-hoc approach, a structured approach helps. Avoiding the harmful effects of emotion is very useful.
What’s my style?
Some people love the feel of intraday trading, and it brings out the best in them. Others want profits in the short term, and yet others are happier being long term passive investors. If you can’t figure this out by thinking about it, then try them until you do.
I’ve always thought I’d do intraday trading, and for a few years I’ve done it on and off, and realized it’s just not my style. It leaves me too tired to do meaningful research and I’ve realized that most of the work is done outside of the markets. With intraday trading you need a terminal on all the time.
Long term passive isn’t for me either , I’m better off as a short term trader, and as someone who’d like to trade in both directions. You have to find what works for you.
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Editor’s Picks
A set of links chosen just for you (Visit our Picks section for a regular update)
The Cost Of Owning 150,000 Foreclosed Homes : NPR
Fannie Mae is the nation’s largest owner of foreclosed homes. That means it spends hundreds of millions of dollars each year on maintenance and upkeep, including mowing tens of thousands of lawns each month.
Steve Forbes Interview: Author Joel Greenblatt – Forbes
The Little Book Steve Forbes: Joel, good to have you with us. Joel Greenblatt: Thank you. Forbes: We had you on a little over a year ago, but since then you’ve come out with a new book called The Big Secret. This follows another book that you had. Why two […]
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Videos
Conversations: Buying a House in the US? With Manish Jain.
Deepak Shenoy speaks with Manish Jain from MProfit about buying property in the US. As an Indian resident, you can remit upto $200,000 abroad, and when you hear that houses are going for less than $85,000 you might want to jump at the opportunity. But like Manish says, things are not hunky-dory in that land either.
There is a substantial difference in cost, realization and opportunity. Manish takes us through various things you must look out for, and what else to consider when you hear that outrageously low price tag for a house in America.
Visit Manish Jain’s blog at celestri.org.
Past Short Takes:
- Reviewing a ULIP: HDFC SL Crest
- Monthly Income Plans
- Conversations: Manish Jain on What’s Good About ULIPs
- What is VWAP?
- Liquid and Ultra Short Term Mutual Funds
- ….
(Read the MarketVision Chronicle)
