Stock Trading Made Easy

Posted On: 2006-09-17
Length: 16:44

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Hello and welcome to on-demand radio with The Market Guys. I'm AJ Monte. Today Rick and I are going to talk about simplicity. We've found that through some of the communications we've been reading via email, some of you out there are making it way too complicated. What we're talking about today is how to bring it back to the simple concepts of finding a stock, when to get in, when to get out, and it's as simple as that.

You know AJ I think one of the reasons why people are drawn into the trap of making things too complicated is because they start with the simple things, and they're not successful in their trading, so they think that rather than adjust with the simplicity of what they're using, that the secret really lies in becoming a little more complicated. So they figure, ok, the moving average isn't working for me, and I lost on that trade, so maybe what I need to do next is to try the Bollinger band. Well the Bollinger band doesn't work for them, and so they try the Fibonacci retracements, and that's not working, and the next thing you know they're looking at fifth waves on the Elliott, and they're still not making money in trading, and they're always in search of that Rosetta stone that's going to unlock the secrets of trading for them. And that's really not the issue.

That's right. And you know, you and I were in the studio yesterday recording our television program, Wealth and Wisdom, and at the back of the studio we had a surprise visit from an old charting master, Jim Raubach. And Jim goes back to the early to mid 60s when computers really weren't the rage in technical analysis. This is when people were charting with sharpened pencils, and chart paper. And we had the opportunity to talk to Jim, and he had agreed to be on one of our future podcasts, and we can't wait to have him in the studio to tell you about his technique. But it was very simple. And we're going to cover some of that today so that when you listen to Jim on his broadcast you'll know exactly how to follow along and pick his stock. Now he's been rated in the Top Ten stock timers, market timers I should say in the world. And he's held this position for about 15 years. So he's doing something right. And Rick, you know that simplicity is perfection in our world.

Well the fact of the matter is, that the simpler the indicator you use, the more robust it's going to be. Now we've talked about the simplest of indicators, and that's price. In fact we refer to that as the leading indicator, the forgotten leading indicator. That is the simplest that you can place on a chart. In fact we talk about when somebody should be starting charting, how do you learn charting. Do you put all your moving averages on, do you put everything on. No. You start with a simple price chart and then you put on volume and then you step back and take a look at that. Well, the price or the very basic of the indicators are going to be the more robust indicators. They're going to be the ones that you can rely on more often. Because the fact of the matter is, the more out of the ballpark you get with an indicator, the more arcane it is...