"His money making style was about mammoth home runs and many small strikeouts. If there was a ‘secret’, he knew that you had to be able accept losses both psychologically and physiologically."
~ Michael W. Covel
Author, The Complete Turtle Trader
The Legend, the Lessons, the Results
On
Richard Dennis’ Trading Style
“One must always have a clear strategy to play the market and clear rules to follow. I have found that it is easy to pick up the phone and pull the trigger by buying and selling. The problem is knowing when and what to do, and to follow religiously your own rules and discipline."
~Jesse Livermore
“If I have positions going against me, I get right out; if they are going for me, I keep them… Risk management and control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.”
~Pual Tudor Jones
"I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where you buy and sell."
~Tom Basso
"Great investors conceptualize problems differently than other investors. These investors don’t succeed by accessing better information; they succeed by using the information differently than others."
~ Michael J Mauboussin,
Chief Investment Strategist of Legg Mason Capital Management
One can use RSI to detect the uptrend of a stock. In the case of Cisco (CSCO), during the uptrend as depicted in the picture above, the RSI did not fall below 33.33 from end Jul 2006 to beginning Jan 2007.
Important Take Away – Video 1
=> * MACD Crossover (i.e. the MACD & the 9 days MACD moving average) is faster than the crossover between the 12 and 26 days EMA.
=> * MACD Divergence (about 7 min 30 s).
~Weakening in momentum of Uptrend (opportunity for short): Price at higher high but MACD lower high.
~Weakening in momentum Downtrend (opportunity for long): Price at lower low but MACD higher low.
Important Take Away – Video 2
==> * MACD & Signal Line cross-over, frequent but not reliable.
==> * MACD Centre Line cross-over, lagging but fairly reliable for longer term moves.
==> * Most powerful MACD signal: Divergence with Price (2nd Video, @ 2 m 30 s)
Extensive and detail explanation of MACD from Stockcharts.com
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