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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » One SECRET revealed: bending time to earn money

One SECRET revealed: bending time to earn money

Go down  Message [Page 1 of 1]

hunter

hunter
Moderator
Moderator
This is supposed to be a sequence to an earlier thread and related posts;

http://forum.srilankaequity.com/t9873-untold-secrets-of-the-stock-market-how-to-turn-losses-into-profits#66319

The objective of these discussions is to identify how we can improve our chances of making profits in the stock market.

So far, we have discussed the following:

* If we trade randomly, our winning chances are less than 30%
* A biased (bent) coin can demonstrate the importance of using probability to win in the long run.
* Stock market is made up of 4 variables: shares, prices, volumes and time


Now, let's look at the variable - time.

Usual perception of most of us about time is something like; it always moves forward; it is not reversible; it goes in a straight line etc.

Does time ravel in a straight line always?
Can't we bend it?

If you monitor the stock market or shares over a period of time, you will see non of them (their prices or volumes) move in a straight line. There are always ups, downs sideways etc.

Suppose we knew exactly when a share would start moving up and exactly when it would stop moving.....
That is enough to make a living out of; isn't it?

Now, if you monitor them slowly and more closely, you might suspect, there could possible be a pattern to these movements, or there could be an external pattern of events affecting their movement.

Sounds too technical?

OK, let's make it easier;

There are two type of patterns in the market (with respect to time)

1. Irregular patterns
2. Regular patterns (or cyclic patterns)

OK?

I will take regular patterns or cycles to our discussion first. Let's look at 4 such possible cycles.

1. Time of the year cycle:

There are some shares (please note not all shares only some shares) goes through an annual cycle. For example; there could be shares drop in price during December and rise in price during January, or there could be shares with bottoms in April and peaks in September and so on.

2. Time of the Month.

Likewise, some shares (not all only some) may behave according to a monthly pattern.
For example, their prices may drop during the last week of the month and peak during the mid week etc.

3. Time of the week.

Similarly, we might identify some patterns within a week as well. There could exit shares which go up on Mondays and drop on Fridays etc.

4. Time of the day pattern.

Sometimes, we may see intra-day patterns as well. For example, may be some shares peak between 10~11 am and drop during 12.30~1.30 pm.


In addition to the above, we might see irregular patterns as well. For example, if there has been exceptional drought periods in the country, some of the plantation sector shares may have taken the same pattern of dry period and wet period.

Do I make any sense here?

To make things more significant, we can try combining some of these patterns together. Say, you have identified all 4 cyclic patterns of one share. Then you can wait for buying (in reverse, selling as well) your share until the right month comes and wait further until the right week comes and wait further until the right day comes and finally press the trigger at the right time.

Combination of multiple such cycles can create a powerful-enough standalone tool to bring you consistent profits. Believe me; there could exist some investors just do that and earn regular profits.

Anyway, let's not go into extremes. Let's just attribute a fair percentage of our winning probability to this (bent) nature of time. I would assign 10% to it. Fair enough?

[An additional word here: I am not an expert in identifying all such cycles in time. But there must be experts out there (even in this forum) mastered this subject matter. For example, there could be people who (follow some macroeconomic trends) can say what is the best time to enter (or exit) banking sector shares; there could be experts who can point out the perfect Month to buy (or sell) hotel sector shares. The objective of this discussion is to enable us to identify such patterns ourselves or take expert views with an understanding of their effect on our profit making probability. (time bending) EXPERTS, we want you to help us here!].

OK!

Earlier, our chance of winning was 30%.
Now, with making use of these 'bents' in time, our winning probability becomes 30%+10% = 40%.

But, still 40% is not good enough to make consistent profits.
Therefore, we need to move forward in our quest for more 'bent coins'.

If you find this discussion useful and there are no questions, we can take another 'variable' in to our discussion.


To be contd........

stumpy

stumpy
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Dude! Great content!

Keep it up brother! Very Happy

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Hunter,

I appreciate and admire the effort you are putting here. I specially admire an erudite constructive article as I too am an Educator ( University Lecturer by profession).

I also like your style of explaining and approach.

Keep going and All the very best.



Last edited by slstock on Tue Sep 13, 2011 7:57 am; edited 1 time in total

Roboticfx

Roboticfx
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I think with these methods( further need more)
we can gain 90%. Like a Star @ heaven Like a Star @ heaven Like a Star @ heaven

Hunter, your post is very convenient for all kinds of stock traders.
Thank You! Very Happy

yea! pattern is the base of share movements. I have also experienced it.
I hope more things related to this topic Sir! Very Happy

Wish you all the best! Very Happy

I'm very fond of your's explanation pattern such as explaining difficult things very simply. I'm not very good in English. So, this is very useful!

Thank You again! Very Happy Very Happy Very Happy

suja


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Please also try and grab the book trend followers. Its a very good one to assist us with the above post. As per the text written by a person after researching successful traders during the 2008 crash has identified trends in any market situation. This is beyond technical and also beyond gambling when HNWI push some stocks and retailers enter and make losses. What are the trends in our market. I feel that consumer goods and also clothing has a trend in December and January ,, can we highlight a few taking ayearly trend in to consideration. Daily , monthly will be good but too tough to predict?

pathum


Equity Analytic
Equity Analytic
Excellent Read! Hats off Sir!!!!

tanzanite

tanzanite
Senior Equity Analytic
Senior Equity Analytic
Hunter, cant put down in words how much your time and effort is appreciated. we dont belong to the HNW catogery, so your sacrificial effort will surely bring you rewards for this good deed done. At the end of the day, even though we dont personally know each other, you must know that there are people in society who know there is an unselfish friend living in a corner of the world by the name of 'hunter'!!! A million thanks dear friend.... Laughing

pitbull

pitbull
Senior Equity Analytic
Senior Equity Analytic
@ HUNTER ur explaining methodology is truly awesome !! n keep up ur good work im following you !i learnt lot of things from you !!
btw thanx alot for ur valuable lessons Smile

arrowms


Manager - Equity Analytics
Manager - Equity Analytics
I also noted the banking sector starts Oct to Dec every year and most of my investments are in this period. As a banker having no of years service i know it is because the unpublished third quarter results.
So so.... master go on

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Nice one in deed.. What we want is more and more these kinda articles.. Wink
Thanks and keep it up.

yoyo

yoyo
Manager - Equity Analytics
Manager - Equity Analytics
Nice Structure and simple style of explaining things Bro..Keep it up. I learnt lot from your post. This is becoming a very interesting conversation. Eager to read your next step.

wiki


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Thanks a lot ..Keep your good work going...
It put more value to this forum

dilshan

dilshan
Senior Equity Analytic
Senior Equity Analytic
~ Great!!! Smile ~

pushpakumara


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Dear Hunter

I use this forum to gain some knowledge on stock trading and quite a lot of seniors have cleared most of my queries. Contents of Your post is something new to me although I have heard about time cycles. Because you have now made it clear. Now the challenge is to identify such cylces against each stock or each sector and I am sure that some of us have such details as if some one try to do it on his own it will be a time consuming task. So dear keep up your good work and look forward to your next session.

hunter

hunter
Moderator
Moderator
Friends, thanks a lot for your appreciation of our efforts. To some extent, I am surprised to learn that we have lot of talents in this forum: professionals, industry experience veterans; young enthusiasts etc etc. It is a great feeling to have a chance to associate myself with you and try to help each other.

For a moment, I though there were some guys pretending as women, but @tanzanite, now I know you are genuinely 'female' because no 'man' on Earth can imitate that 'flattery' so effectively.
.
.
Ha ha haaa Laughing Laughing Laughing
Just kidding sister!

In fact you were one of the people who asked me to start this thread. Therefore, if ever, someone find this useful, a big portion of the credit should directly go to you.



I thought of starting a new thread to continue our discussion so that we have room in this thread to discuss anything related to cycles and patterns.

The URL of the new thread is;

http://forum.srilankaequity.com/t10022-secret-of-harnessing-the-intrinsic-value-to-gain-profits#67431

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