Investing and Trading on the Internet
Fred H. Schlereth, Virgil W. Eveleigh,
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Tradersweb,
Inc
Investing and Trading on the Internet Fred H. Schlereth, Virgil W. Eveleigh, |
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Investing
A New Strategy for Investing and Trading in Stocks and Options |
Use the Web and Tradersweb to take Control of your Investments |
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Mission and Goal Our mission is to help investors and traders locate securities offering unusually good profit potential and provide technical analysis support to define attractive buying and selling opportunities for selected securities. |
Our primary goal is to help investors gain real control over their investments. | |
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Three Elements 1) Select stocks based on sound fundamental analysis. 2) Use technical analysis to determine entry and exit timing. 3) Use the Web to collect "other" information prior to making the final buy/sell decision. |
Here we are stressing the use of the Web, in general and using Tradersweb, in particular. Trading decisions are made using the first two elements. The third is used as corroborating information. |
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Fundamental Analysis P/E Earnings Growth Company Growth GIV Link to Definitions and other indicators. |
There are many fundamental indicators, but we stress those (such as GIV) that provide a measure of expected performance. The fundamental indicators provide comparative analysis. Tradersweb measures such as GIV provide hard buy/sell information. |
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Technical Analysis Momentum Stochastics MACD OBV For definitions of these indicators and others, see "The Encyclopedia of
Technical Analysis", R.W. Colby and T.A. Meyers; Irwin, 1988.
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Any of a number of standard indicators are appropriate. Remember, however, that technical indicators do not measure the strength of a company. Technical indicators indicate whether the buyers or sellers are in control and, more importantly, when the "smart money" is consummating the transactions. |
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Other Information Insider Trading Analyst Estimates Recent News The Fed The Market in General |
This kind of information is also not useful for making a primary trading decision. However it is important as a confirmation of the fundamental and technical analysis. |
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Traditional Methods for Investing Buy and Hold Dollar Cost Averaging Mutual Funds Investment Advisors |
These are pretty much passe now because of information on the Web and low trading costs... and...Tradersweb. |
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Our Method Pick a good stock Watch the short to intermediate trends using the STT advisor. Buy at an appropriate time. Set a mental stop loss. Take a position in one or two stocks. Keep tabs on about 15, to have a ready supply. |
Invest in the market, not in individual stocks. Do not hesitate to admit an error. |
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Recent Example |
One of many we could cite using our predictions. |
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Another Example |
Here's one using Big Charts. |
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STT Trader Our signals are are derived from several standard technical indicators. Timeliness is at the heart of successful trading. Being even a day late with a prediction can make all the difference in the record of performance. Link to a description of the use of STT for short term trading. Similar considerations apply to the use of STT Trader for monitoring your portfolio. |
TradersWeb Short Term Trader predicts the short-term price movement of selected stocks. The trading signals we publish assist in the selection of a specific time to make a trade. New signals are published on the Web each day for the stocks we follow. Click here for recent predictions. (Then, select the "recent predictions" link under "See an Example" on the Tradersweb page.) |
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Effort and Time We have designed this service so that the user is able to track the evolution of a particular position each day with a small expenditure of time. We are very sensitive to the 'time' issue, realizing that most of our clients have other major demands and responsibilities. TradersWeb requires minimum effort to reap large rewards. |
It may take some effort to get used to our detailed analysis and recommendations, but the concepts are not difficult and with just a little practice trading will become second nature. |
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Detecting the Signals Moving average crossovers Positive or Negative Money Flow Positive or Negative Volume Accumulation Divergence Price OBV (On Balance Volume) |
Clearly it will take some practice to detect these signals. We, at Tradersweb, perform these analyses using automated tools which we have developed. We use these tools to search for "events" signalling price movement, but check all results manually before publishing a recommendation. |
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Example Emerson Electric |
This example is a working chart taken from Omega Research "SuperCharts" program. It shows a typical trading signal. |
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Strategy We do not recommend a specific buy-sell strategy. Instead we rely on the general principle that the investor should arrange to stop losses, and devise a strategy for taking profits. |
Such decisions are highly personal and for this reason we hesitate to suggest hard and fast rules. |
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STT Indicators There are four indicators; up, dn, cu, cd. The first two are a prediction for a price movement in the indicated direction. The second two denote that the prediction is no longer valid, but that a reversal is not warranted. |
These indicators form the basis for our short and intermediate term trading recommendations |
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Services A monthly newsletter providing commentary on the economy, market conditions, and roughly 350-400 stocks of special interest selected from a universe of 4000-5000 candidates. Regular web site updates on market conditions and stocks covered in the newsletter. Specific recommendations. Short-term buy and sell signals on over 100 stocks, updated daily on our web site. |
Because of the dual nature of the Tradersweb Service we are in a unique position to support Dynamic Investing. |
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Who Benefits Retired, has about $2
million;
Just starting out, has
accumulated about $36,000;
Mid-career with about
$200,000;
Single mom - less than
$10,000;
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Dynamic investing serves the needs of a wide range of individuals. These examples are excerpted from a recent Schwab ad in IBD. Recent survey's have shown that investors who trade on the Internet like to make their own decisions. They also like to do their own research on the companies they are considering making an investment. They don't want to have a stockbroker tell them what the "hottest" new company is going to be, they want to find it themselves. |
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Newsletter Data Are you interested in focusing attention on stocks which have the following characteristics? Price trend is up. Consensus of analysts recommendations is strongly positive. Insiders have recently been buying, or at least not selling. Long term profit potential is significant. Prospects are strong for the industry area. The company has a distinguished record of sales, earnings and dividend growth. Current price and PE seem fair relative to predicted earnings growth rate over the next five years. |
All of these
characteristics are clearly indicated for each of the 350-400 stocks
on which we report regularly in our three investment categories:
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STT Data Are you interested in focusing attention on stocks which have the following characteristics? About to enter a positive or negative trend. Near the bottom (or top) of a cycle. In a narrow trading range. |
This is the sort of information which is available on a daily basis. It takes just a minute or two to determine current state of particular stock. |
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Conclusion Invest in individual stocks Stay away from mutual funds Trade on the Internet Use IRAs to the maximum extent possible Spend a few minutes to check the status of your investments. |
Good information is key to successful investing. Information is derived from an understanding of the meaning of the fundamental and technical parameters of a stock. News bites in the paper or CNBC are not to be confused with "information". Rather these should be used only to provide corroborating data. And...sometimes these may be deliberately misleading. |
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