I'm still fascinated by the stock market. It has been a slightly tumultuous, interesting and (definitely) continuing learning process.
I have been through a few different phases where what I believe about the markets has changed. Random Walk
, buy and hold
, and other variations
of the shotgun approach have caught my eye. I still believe in diversification of assets, low cost index funds, and no load funds, as well as finding out how your "advisor" actually gets paid.
It might turn out to be an expensive and foolish errand, but I still think there is more to that world than dollar cost averaging into VTSMX
for 45 years. At the same time I was sure markets were always efficient, my mother was getting her second Ipod. People were stampeding, camping out, and bickering over Guitar Hero, Nintendo Wii, and Iphones. World of Warcraft was causing divorces. Lifted F150 pickups were becoming a stereotype in my neck of the woods. Everyone was paying through the nose for gas. Public companies were involved in all of those transactions, and anyone with a little bit of money could participate.
There are also new vehicles with which to participate. ETFs
allow you to buy all sorts of industry and regional sectors with much lower expense ratios than most mutual funds, and trade them like individual stocks with things like trailing stop losses and whatever time frame you prefer. These vehicles are what brought me to this book. I'm not under the impression I can beat the pro traders in the pits of the world. Most of them can't beat the indexes consistently and they're professionals. I do want to use ETFs and individual stocks when applicable in order to juice overall returns.
This is the mindset I brought to Turner's book. It came highly recommended by people who were always talking to me about "hammers" "gapping up" and other terminology that was foreign to me.
This book really has a lot of information, but seems scant in some areas. Turner encourages people to continue to study the markets, protect their principal at all times, and take trading classes, which is very responsible. I shudder to think about people who marched into battle with this book as their only weapon. I kept waiting for the chapter on fundamental analysis
, but the author gave some basic guidelines and deferred to Investor's Business Daily several times when it was brought up. Fundamentals can help you separate the wheat from the chaff, but the main thrust of this book is intraday trading. I guess someone who's not going to hold a stock overnight can probably do well even on the momentum of a crap company, especially if they have a stop in place.
Turner goes into detail about candlestick charts, volume, breakouts, support and resistance, the moving averages, how to use them to your advantage as well as which ones are appropriate for your time frame. I skipped whole chapters on shorting stocks, scalping, and Level II systems because I don't feel ready for those techniques and technology at this point. This book will definitely be reread, further highlighted and dogeared.