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Interview with Ron
(September 20, 2002) His "bread and butter"
Trading System:
Point and Figure charting accounts
for about 90% of Ron's Technical Analysis.
He usually uses 3 times one
fluctuation...but if the fluctuation of the stock is less than 1%, then
he uses 2 times 2 fluctuations. For low priced stocks, he uses a two point
reversal.
He says, "I don't have a
fixed parameter, it depends on the price of the share and its volatility
and its spread."
He says, "Point and Figure
charts are much better in showing tops than bottoms because tops take a
long time to distribute. Bottoms are not easy to see because they will
often just spike."
All of Ron's Point and Figure charts
are done by hand.
He says, "The problem with
Point and Figure charts in most charting softwares is that the computer only follows the existing, primary trend and then
stops, so if a stock opens higher and then collapses, only the upmove is
shown. If the stock recovers next day, much information is lost. The
only accurate way is to do it in intra day by hand."
To learn more about Point and Figure
charting, he advices readers to check out Dorsey
Wright and Associates and Stockcharts.com.
Other Technical Tools that he
uses:
Stochastics in conjunction with
Japanese Candlesticks
He says, "I use filtered
candlesticks wherein the screen is divided in half. The top shows
candlesticks (60 days) while the bottom has a secret stochastic. I only
follow signals when the stochastic is above 80 turning down, or below 20
turning up. Otherwise, the candlesticks give too many wrong signals.
DMI, MACD and particularly CCI
He also said that Kagi charting may
be a good substitute for Point and Figure charting.
He says, "I like using
oscillators that don't have an upper and lower limitation."
He is not a believer in Elliot Wave,
Gann or Fibonacci.
Market Forecasts:
He says, "I have been
consistently bearish of the market since Jan 1997 ever since the Point and
Figure charts have all been pointing downwards but, at the moment, I
feel that we will probably not test the 1080 bottom...but, if there is a
war with Iraq and Saddam targets the Saudi oil fields, we'll have oil up
to $40.00 per barrel and all the economies of the world would
collapse."
He says, "I have no stock
recommendations at the moment."
What do you think separates the
men from the boys?
Discipline and Patience. The ability
to stay out of the market for months, if need be.
Final Word of Advice:
P
- Prolong
O
- Our
P
- Profits
C
- Cut
O
- Our
L
- Losses
A
- Aggressively
He
advices everyone to read "Market Wizards" by Jack Schwager.
You
may reach Ron at mrbearbull@hotmail.com
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