| I've used Worden Brothers' TC2000 for about a year and have made a
tidy sum (five figures worth of capital gains) that I attribute to using charts
to assist in buy-sell decisions.
I'm a strong advocate of CANSLIM (which was described earlier in
this conference), and frequently locate opportunities in Investor's Business
Daily, which I then download using TC2000. Usually, a breakout in volume
is what attracts my attention to a particular issue. If the chart shows me
that a stock is in an uptrend, or has made an emphatic break into an uptrend, I
then check business news on the stock over Dow/Jones News retrieval, and make
my buy decision based on a combination of CANSLIM technicals, and the
fundamentals of the particular issue.
Here's an example. I noticed increasing volume a year ago on Humana (HUM) when
it was around ten. I checked Dow Jones News //WIRES and say that there was
heavy insider buying. I figured Health Care was going to recover from Clinton,
that HMO's would be beneficieries, etc. and made a buy decision. I used the
TC2000 candlestick charts to track HUM, paying special attention to the daily
Volume and to the Stochastics (with 5 day and 15 day moving averages). Over
the course of a year, I bought and sold HUM four times, catching many of the
intermediate term dips and all of the intermediate highs (which you can usually
tell because volume dries up on the peaks and valleys and the stochastics
transition). I made about 20% on my money each time I bought and sold HUM,
which is not bad given that it was compounded. Did I make more money on HUM
than by buying and holding? In my case, I did, but sometimes you don't make
enough to warrant the time and commissions. What I did do, however, is reduce
my risk by reducing my market exposure. From my point of view, you have risk
when you are in the market and none when you are out, if you define risk as
risk to capital preservation. I was out of the market for much of the time, or
cycling my funds into other stocks (like Skywest) which had a nice trading
pattern, rather than sitting through downcycles. It's all a matter of taste, I
suppose, and I like trading.
I never buy during a downtrend, as the single instance that has burned me the
most has been trying to guess a bottom, and trendline analysis (looking at
periods of 1 day, 3 days and 1 week) is what tells me whether a stock is in a
long term downtrend, or not. For example, Telmex has been all over the place
and has recently come back to 58 (or so) from an intermediate low of 50. If
you look at a 1 day graph, you might think that TMX had bottomed. If you look
at a 5 day graph, you'll see that it is still cycling in a long term downtrend
and has not made a clear upside breakout yet. The chart also shows me that
there is weak support (for TMX) around 55, and that the next level of strong
support is close to 45. (At least this is how I read those tea leaves.)
For my part, I would much rather buy TMX as it shoots past 60 on strong volume
than take a chance on guessing that 50 is a bottom.
I have recently (successfully) used charting to find some place to make money
given the volatile state of the U.S. market. I cashed out in early April when
I saw the S&P 500 break through its 200 day moving average, and avoided most of
the carnage of early April. After looking at the U.S. market and all the
normal indicators, I decided there was too much risk (this is the "M" in
CANSLIM), and decided to look elsewhere in the World to make money. I
downloaded a large number of Country Funds into my Worden and looked for
two things:
What markets were in an uptrend?
What markets were acting pretty much independently of the
U.S. market - i.e. which did not crater in Feb. and April?
The Country funds gave me a real-world view. I looked at Malaysia, Japan,
United Kingdom, CHile, etc. etc. Of all of these, I saw that Italy looked
pretty good. I would not BUY a Country fund, becuase they sell at a premium to
the underlying stocks. For example, why buy Mexico Fund when you know it's
largest holding has to be TMX and you're going to pay 6% or better in hidden
loads? Discovering that Italy Fund's (ITA) chart looked good since the first
of the year lead me to look at Italian stocks, and I ended up buying Fiat (FIA),
Bennetton (BNG), and Montedison (MNT). Germany looked good too, but I held
off until the Bundesbank made its moves, then bought Daimler Benz - (DAI),
which charting showed to be reaching new highs.
Bottom line (whew), is that charting is a good tool to make buy/sell/trading
decisions after you have checked out the fundamentals of the company.
Worden is cheap, it's reliable, it's easy to use and to play with. You
can learn a lot using Worden, so that you can work up to more sophisticated
packages if you wish later on. It's downside is that you have to locate the
stock, and pay a minimum of $1.50 to download it to do your "what if" analysis.
I am currently moving up to Telescan (which a friend of mine has), that
charges a flat rate for data access to every stock. Telescan lets you
define your own algorithms, and even use CANSLIM criteria to locate stocks
which match a preset pattern. Telescan software costs almost $300. You
can "what if" as many stocks that you want by paying a flat, non-prime time
rate in the neighborhood of $75/month. Even still, I think Worden is an
excellent place to start. You can't beat the price - around $29, and my
monthly usage ran around $25. Since it's so cheap, you can start with it and
then make the decision to upgrade to another service if you find that you like
charting.
Anyway you cut it, using charting tools is primarily useful to very active
traders, and probably of less use to buy-and-holders (although people who
bought Chrysler at 6 two years ago and held it to 60+ a couple of months ago
should take a close look at the charting pattern and make their own decision
whether or not the "cyclicals" have seen their cycle. The chart looks like
lower highs and lower lows to me.
P.S.
When you use charts, you have a selection of displays. I always use
"candlestick" charts, which show the open, close, high and low for a day.
There is quite a religion about reading candlesticks, and Worden's Press sells
some books on it. The predictive rate of candlestick chart patterns appears
to be pretty good if a stock is trending sideways or going up; not so good on a
decline.
P.P.S.
Worden publishes its own list of recommended stocks. Of course, if you
want to follow them you download them and pay the buck-and-a-half. This is OK
if their picks are good - not so, otherwise. So far, I'm not impressed with
Worden picks. Typically, they seem to be trying to locate stocks which
are recovering after a prolonged sell-off. This amounts to trying to guess a
bottom, which has never worked for me. I'd warn you to buy a Worden-recommended
stock very carefully.
|
| > I would imagine that loading data into TeleChart 2000 without using the
> data downloads from Worden Brothers is fairly difficult. After all,
> this is where they get most of their cash flow.
TeleChart comes with a standalone utility (DATACON, I believe is the name) that
converts to and from Metastock formatted files. You can do conversions
for a single stock or all stocks. You can also update Metastock files from TeleChart
files.
One restriction on moving data into TeleChart is that the ending date has to be
the same as the ending date of your TeleChart data. Metastock in turn can import
data from ASCII files, and I think the Metastock manual lists a Basic program for
reading there data files. I have moved a good amount of data from Dow Jones to
Metastock to TeleChart via this utility.
Worden periodically has half price sales for historical data, which makes it about
25 cents for a year of data. You also can get up to a 25% bonus when you deposit
funds in your Worden account, which reduces the cost to about 20 cents per year.
Worden's data is pretty clean and they use crc checks on the modem transfer,
so the data gets to you clean. One of the problems with some data providers is that
modem glitches end up in your data and are a pain to clean up.
So if you want to spend your time looking at charts and not cleaning up data, and
can restrain your self from downloading every stock you hear a rumor on, Worden's
is pretty good.
Rich
>
> Has any one had any experience with generating print outs from TC2000?
>
> Does TC2000 generate color graphs or only B&W prints?
>
> Also, what printers are compatible with TC2000?
>
> I believe that TC2000 requires one of a few print drivers (IBM
> Proprinter, Epson FX, and a HP something), but I am not sure what
> printers will support this application.
>
> TeleChart seems to be very strong on the screen displays, but
> interfacing to a printer does not appear to be very easy.
>
> Any comments about printing with TeleChart 2000 would be appreciated.
I just use an old NEC dot matrix printer and the B&W charts are ok.
But since you want current data on hundreds of stocks, just use laplink
to load the data on your color laptop and keep it with you. ;)
Rich
|
| > I would imagine that loading data into TeleChart 2000 without using the
> data downloads from Worden Brothers is fairly difficult. After all,
> this is where they get most of their cash flow.
TeleChart comes with a standalone utility (DATACON, I believe is the
name) that converts to and from Metastock formatted files. You can do
conversions for a single stock or all stocks. You can also update
Metastock files from TeleChart files.
One restriction on moving data into TeleChart is that the ending date
has to be the same as the ending date of your TeleChart data. Metastock
in turn can import data from ASCII files, and I think the Metastock
manual lists a Basic program for reading there data files. I have moved
a good amount of data from Dow Jones to Metastock to TeleChart via
this utility.
Worden periodically has half price sales for historical data, which
makes it about 25 cents for a year of data. You also can get up to a
25% bonus when you deposit funds in your Worden account, which reduces
the cost to about 20 cents per year. Worden's data is pretty clean and
they use crc checks on the modem transfer, so the data gets to you
clean. One of the problems with some data providers is that modem
glitches end up in your data and are a pain to clean up.
So if you want to spend your time looking at charts and not cleaning up
data, and can restrain your self from downloading every stock you hear
a rumor on, Worden's is pretty good.
Rich
>
> Has any one had any experience with generating print outs from TC2000?
>
> Does TC2000 generate color graphs or only B&W prints?
>
> Also, what printers are compatible with TC2000?
>
> I believe that TC2000 requires one of a few print drivers (IBM
> Proprinter, Epson FX, and a HP something), but I am not sure what
> printers will support this application.
>
> TeleChart seems to be very strong on the screen displays, but
> interfacing to a printer does not appear to be very easy.
>
> Any comments about printing with TeleChart 2000 would be appreciated.
I just use an old NEC dot matrix printer and the B&W charts are ok.
But since you want current data on hundreds of stocks, just use laplink
to load the data on your color laptop and keep it with you. ;)
Rich
|