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I just use the charts Jon, that HL provide as I use them for my buying and selling
Trading in and out is not my game, i don't have the experience to do that.
Id be weary of trading in and out of AGL right now. They have the the meeting at the end of the month,i wouldn't be surprised if there was more pharma contracts before then.
The the submission should be within a week or two of that.
Not to mention potential studies that will come out
what platform do you use to check the rsi of a stock?
Hi SLF72,
support and resistance levels are based on the SP action. A support level is a target that if a SP is falling, it may fall to that level and rise from it and therefore it supported the SP. Resistance is the recent "top" of a stocks SP and often when it gets to that level falls back down as it acts as a "resistance" to further gains.
However just because a SP falls to a support level, ie 96-98p on AGK, it does not mean it will simply bounce back up. It could just carry on falling to the next support level!
Indicators running alongside a chart pattern are there to give the viewer extra confirmation of what is most likely to happen next. Some chartists will run 2 or 3 or 4 indicators alongside the chart pattern and if they all say the same thing then as you can imagine it makes the likely event, that more predictable.
The RSI is an algorthym of the SP action and has values between 1-1 00. Generally if it has value of 80 or above it is "over bought" (ie people have piled in and the SP has got ahead of itself, other people recognise this, believe the stock now to be over valued and sell). like wise if people panic sell and the RSI falls to 20 or below then others will think the sell off is over done and see value and buy in.
So using AGL as an example I use the RSI as an indicator to show when the stock has probably got a bit ahead of itself and is therefore likely to fall. The RSI is currently at 80.33. and the last 2 days it has closed at about the same price as 110p.
It looks to be running out of steam and with this RSI just in the over bought area it looks, more likely than not to fall back a bit.
But heres the thing. It might have great day tomorrow and hold on to those gains that it tried to today and yesterday and close at 118p and be even more overbought!!
So I am waiting for the inevitable down day and not predicting when it will be or at what level but I will react when the patterns unfold and its clearer.
Patience is key, and so is decisiveness and it took me a while to realise they are not mutually exclusive concepts in trading!
i did. it was a beautiful thing.
this dispassionate 'no knowledge' TA method makes a lot of sense. i've been looking at charts a little over the last few weeks, but seeing as i don't think i've based any decisions on it, it must just be because i like the pretty colours.
my 'company analysis' tells me i love AGL and i've just got to sit tight to increase my capital. but i can totally see that does not mean a TA approach is in any way necessarily less valid or profitable. in fact, thinking about it now, i guess it fundamentally does safe guard my investment. (having lost everything at THQ a few yrs back, and having suffered horribly more recently on AGM, BYOT, BARC, BPC.)
Wyn, you've mentioned 'support' are you just identifying this by looking at the levels at which an rsi has reversed in the past?
A few agenda driven de-rampers have had a go, but they only last a couple of posts. The problem they have is trying to find a negative 'angle' with Parsotix, there isn't one.
See what i did there
thanks for confirming this was an LSE board.
after reading with interest a sensible discussion with DIFFERING views and approaches and not seeing any sign of abuse, I thought I must have got lost.
maybe its you lot that are lost!! :)
Bloody LSE BB lag
I've never thought that AGL could get close to zero even if the company failed, as the IP and patents have a lot of value and would have been auctioned off to highest bidder
I've never thought AGL could possibly go to zero even if the company failed as the IP and patents had a lot of value and would have been auctioned off to highest bidder
yes but some silly buys around 70-80. i am being honest when i say that sometimes i forgot i had them. think i piled in couple of months after FDA submission
Fair enough... although they could have gone lower. :0))
(I'm presuming you bought in the mid 20s? back then?)
I've held some for 10 + years but only 1/10 of what I hold now. I basically considered them spare cash, they were so low they couldn't get any lower. Sort of like premium bonds
I no longer have the facility to short stocks so I am only looking to time entries on what I think will be rising stocks.
So I haven't traded this stock, only added, (although I missed a sitter yesterday when I could have sold at 118p. The logic was, although it could have gone higher, that it was not likely to close at 118p as that would then have put it around 90 on the RSI for opening today, which means it would almost definitely have fallen today. So I could have (theoretically) bought in at any point lower than 118p and just got more shares for a straight buy back. Trouble is I am so relaxed about buying and only adding to a position these days, I did not see what was staring me in the face! (A bit of a Simpsons Doh moment.!)
So, I have developed a bit of a hybrid system and it seems to work for me so who knows! maybe after all this time I have cracked it! (Famous last words....)
And last, thing the only point perhaps I might highlight, is that recently there were a number of posts from LTH saying they had been in the stock for 10 years. I thought blimey, you really should have had your money working a bit harder! And that's what charts can help with.
If I have learnt nothing else, Timing is everything, absolutely everything.
Quick question Whyn, it's not clear if you are trading AGL or not. and by trading I mean opening a position then closing then opening ... And not just using charting to find good top up points and leaving the bulk long term. Because that isn't really trading.
My opinion is that although AGL looks very tradeable, because of the usually very high spread and the possibility that the smallest news can send this rocketing, it's too risky to trade. You may win battles but you could lose the war.
I'm not against trading and I do trade crude, very short term, circa minutes to an hour, may do 10 or so short/longs in an afternoon. But for me this isn't worth it here. AGL will reap rewards long term and there is no need to get greedy with it.
Div, the only follow up I would make based on your comment:
" For me and I think you noted with your longer term view on the stock, that perhaps this is not for trading given the upcoming newsflow."
Is that, actually, yes it is.
This is one of the reasons I love charting as a method.
You are making the assumption that the news flow will all be positive aren't you, based on your company analysis?
Using TA, looking at the chart I don't know any of this potential positive news flow. so how would I trade it?
Well, the "trend is your friend" and clearly the trend is up so I would not look to be shorting the stock (unless I saw very clear signs of a reversal), so now all I would be looking to do is to time my entry. Currently 97p is a support and it might come back to test that level, (if it did I would top up there). However as the rise is still ongoing as I said in a previous post, new support levels above 97p might form. Who knows.
What I don't want to do , (as a chartist), is get sucked into buying now at 116p with an RSI above 80 for FOMO, and then 2 days later the SP falls to 97p! I may well get money back as the SP recovers from 97p and in my invented example goes to 130p, but in terms of overall profit, its crucial.
But, and here is the kicker.... What would happen to the SP if FDA was not granted? Sometimes (actually most times), not knowing the fundamentals is very helpful as it stops preconceived ideas potentially blinding the individual to the risks that are always there on any stock.
Patience and no emotion so you can stick to your plan is key, and if you can nail that, then its not as hard or as slightly weird as it (TA) may come across as. ;0))
That’s quite a detailed response and I appreciate your time. I would perhaps agree that TA and more specifically RSI can work well in some specific cases, but not necessarily all.
For me and I think you noted with your longer term view on the stock, that perhaps this is not for trading given the upcoming newsflow. In the same way that we would know if an oil well has been spud and that we can expect a result, we do not know what that result could be. In the same way we don’t know what the FDA result will be and/or what new corporate activity we can expect and when. Therefore the requirement to take that longer term view and consider the probability of success, as you would the Cos of a well is what delivers alternative returns depending on your investment strategy.
This is a market of opinions and each to their own, your approach with RSI works well for you. For me, unless your a cultured/experienced investor, over trading can kill your returns. GL to those that try to time this one with any degree of success.
Hi Div, actually yes it is. I have used a lot of indicators of the years and I have found only the RSI to be reliable enough to be of use. (But this is very personal and different chartists will have their favourite indicators and methods)
I don't know how much you use or know about TA so forgive me at the outset if I am teaching you to suck eggs!
TA is not infallible (no system is), and it does not predict the future.
TA is simply forecasting the most likely future event so effectively is just an odds game.
Charts are just graphical representations of the peoples buying and selling actions. As its people that buy & sell shares and given that people in crowds are reasonably predictable, it follows that the patterns these graphical representations (charts) make, will likely be repeated more often then not. That's TA in a nut shell.
The big thing, I think, that Fundamental analysists either overlook or don't accept, is that the SP is never in sync with the company it represents. As a result FA is irrelevant (that's not meant to be provocative btw!)
All the known (FA) info is already in the current SP. So, for example future FDA approval (which is not a given but likely) is already reflected in the current SP, so I don't need to know that bit of FA
You have highlighted an example where using my method I would have missed out on a gain. Which (although I might argue the toss on exactly how much and when), is a fair point. But that's OK, TA is not full proof, but if (for the sake of argument) my method stops me buying at the top of a SP just before it falls back say 5-10%, 95% of the time, then I am happy to miss out on the very rare occasion on the example you highlight.
Most TA books will tell the reader to find and develop "their system" which is very daunting when you start out, but its true I think and using myself as an example, for the amount of time I hold a stock, I have developed a profitable methodology that works for me more often than not leading to good short term profits.
There are reasons why "traders" don't profit as much as they should is because their mentality is wrong. TA does not suit a gambling personality, but it attracts mostly exactly that type, and it leads inevitably to over trading.
I have made over the years, every text book mistake in trading and learnt very much the hard way and although its taken me probably longer than most to figure it out, I seem to have stumbled on a way that suits me (and at last my bank balance!) pretty well.
Wyn, I assume the RSI is not the only indicator you use?
RSI from 38p to 96p was overbought at 49p on the last run so you would of missed out on significant gains had you of only used this indicator.
No indicator for fundamentals, so when using TA what else do you use to not miss out? I like the fact that the traders are here as they provide liquidity, so this is purely a TA question.
Hi CI, yes, charting can easily send "mixed" signals depending on what time frame is being used.
I like to use the daily close charts, so monthly/3 monthly/yearly on HL. If you look at the weekly chart that gives daily 15 minute intervals then its a different picture.
So you would use the time interval that suits your trading time frame best (when I day traded I used 1 min/5 min and 15 min intra day intervals.)
As I am taking a much longer view on this stock I am using the daily close chart with the RSI.
So, yes the intraday 15 min chart shows plenty of space for upward movement with the RSI.
However the daily chart is in over bought territory so I will wait for the inevitable down day(s) to take place. As yet it has not occurred so the pattern is still unfolding. As it does it will probably produce new support and resistance lines which will all go into the mix.
My philosophy is to try and get in at the lowest point at that time. So I would be happy eventually, for the sake of argument topping up at 122p if the indicators said that to me. I get personal satisfaction if it then just goes up from my entry point!! (sometimes that happens!)
In any event, every trade I do I view as a separate entity on its own merits. The actual price is irrelevant, its the profit % (or loss) is my criteria for judging success or failure.
Cheers
Wyn- Just observing the 1 day/1week RSI and it seems to tick back down to 60.. despite it being all time highs.. really strange. Does that mean further upward potential. However, the yearly RSI is 80+ which is no surprise. Not sure how you would interpret this is meaningful at all? Thought it's quite interesting. Would be great to learn your valued input from a TA perspective :) GL mate.