I don't understand the cup 'n handles, head 'n shoulders and other patterns yet. I think the Bollinger bands are good indicators for buy points. I haven't exactly used them yet as the major indicator.
I watch and watch and do what my instincts tell me. I've missed so many opportunities to make money since I've been sitting it out but I'm just not seeing anything I want.
Either the stocks I have a feel for are stuck around a pivotal point for weeks now or I feel they are over-priced.
I'll tell you what I was doing. I wasn't ready to buy in 1000 lots, max was 300 for me. You should really start at opening and watch all day; they all seem to take off up or down. I look at the general past trend, then pull up a 1 day 1 minute chart, keep refreshing it. That combined with the MACD and started watching volume, I was getting fairly good at hitting the highs and lows for the day. Also the RSI. That isn't foolproof, but when a stock goes into oversold at the bottom, sometimes a couple bounces, that's a good point to buy in. But some stocks aren't that volatile. Some stay on a narrower channel.
My biggest problem is when a trade starts to go bad, I have a sale ready to get out as soon as I buy but it hard to resist the temptation to hang on. One day it went bad on me, 300 sh I sold at about 80 loss. So I see where to buy back in, stayed in, maybe that one was a swing and made about 180 on it. Net gain not so good. But those amounts are still considerable cash for me.
I guess I just got cold feet. I am risk averse right now.
Have any of you tried buying and selling ETF funds? I have been looking at them as it would be nicer to buy a bunch of stocks at one time. The ETF accomplishes that goal.
Black rock have lots to chose from.
I was looking at the IYT fund iShares Transportation ETF
and the
ITA Fund iShares U.S. Aerospace & Defense ETF
don't understand the cup 'n handles
IBD uses them so much I'd been thinking that they invented them, but it seems lots of people like 'em. Here's the basic pattern (from here) and when I looked I even found a youtube chat here. Several times a week IBD has several dozen stock graphs and they point out what the buy points are --for a while I was writing down the 30 or 40 buypoints they were announcing and used those for my "buy" list.
So using cup'n'handles is easy (or head'n'shoulders or whatever). The hard part is making money off 'em. After about a year or more of sooo many IBD cup'n'handles I wasn't making as much money as I was before, so a few months ago I decided to ignore those patterns and all I'm doing is I buy stocks with good valuation numbers that's got good steady price growth. Seems to be working better & it's a lot easier.
Everyone has their own risk tolerance and their own investment goals so there's not right or wrong here. The only rule is to understand what we're doing and then be happy with what we did.