Picture books for us dumb guys.

[aqecaen]

Is there anyway you guys could make a dumbed down picture so I understand why you choose specific stocks and what helps you decide on market direction and how you'd plan an entry and exit. I realize I'm beating a dead horse but I still don't get it. So maybe pictures will help.

Also I've lost interest in the options genre simply because I'm trying to learn too many things at once and its messing me up. Not putting it aside permanently but until I have learned the basics of stock direction and entry & exit.

Here is my picture. I had originally made it to kind of explain to a friend who understands less than me. He said it helped him understand a bit.
So the reason I would buy into intel is because.
-It's trending on both 5 day and monthly.
-It broke resistance not too long ago.

How would you plan an exit point on this?
Am I correct for being sold on it, why or why not?

[aoyoubuquusu]

I'm a very short-term trader. Bearing that in mind, I would not buy long on Intel right now as it appears I would be "buying the high". Why? Because...
1. It's crossed the $27 mark three times. Twice it went back down, and this time it's not showing any signs of taking off either. Just creeping around in the mid-27's like it doesn't know whether it wants to really breakout or do another pullback.
2. Yesterday's closing price of $27.66 is $1.07 above the 50-day Moving Average.

So when would I buy? Give me a day of bad news for Intel, like they missed earnings or something, which causes people to panic sell and push the price down to $26 or less. Then I'd be interested in buying because the chart tells me the price would very probably return to above $27 rather shortly. Thus, I'd set my "sell trigger" at $27.

[apifxonm85]

Ye...... paper trade 50 stocks at a 6 month high and see what happens, maybe it works for you....You can make whatever assumption you want about this stock. Whether you are right or wrong will be proven out by the market. Not by what we say.

So maybe make 50 more assumptions by Monday and track how they work out.....then do 50 more. It's what I did the first several months....I filled notebooks every week, read a stack of books, went through thousands of videos, I walked around with a bluetooth piece in my ear listening to anything I could from my phone. And I still do a lot of this but now I'm more focused....and I still only feel like I have scratched the surface.

Just keep at it by doing tons of these little drawings and then track how they work out and find what works for you. There is no right answer....only the market can validate your assumptions.

[asudaab]

Hey thanks for the info. Are you talking about it reaching $27 on the 10 year line chart? I'm just asking to see how much history I should use on reference. And calculating the entry and exit like that makes a whole lot more sense to me. So right now would actually be a really good time to get out of intel. I probably just squeezed the last gain out of it last night right? So would it be ideal to short as soon as you see it begin to come back down? Also I'm not very good with technical indicators so the SMA is almost meaningless to me right now...

[admin]

1. No. I was referencing the big 6-month chart you used showing from Dec of '13 to Jun of '14. Intel hit $27 about mid-Jan, mid-Apr, and last of May. Also, forget 10-year charts. As Blaine said, keep it at 6 months (or less if you're looking to be a short-term trader).
2. That's up to you. It's your goals and your strategy. At the moment you bought Intel is when you should have decided on what your "sell" price would be.
3. Not necessarily. It might go down twenty cents, or it might go down two dollars. Going short is riskier than going long. For me personally, I do not believe with any confidence whether Intel will go up or down next, plus it's not currently at a price I feel is a pleasant entry point. Thus I would choose to just keep it on a watchlist without taking any action at this time.