Lightyear FX: Financial Analyst, Financial Media Personality, Amateur Research Trading Technical Analysis. Stay on top of the latest cutting-edge technology and share your deepest industry insights. The following is from Just2Trade.
William Gann 6 ways to make a single:
1. Time is a very important factor in Gann's theory. It represents a cyclical cycle in the stock market. The time period is the most important, and the longer the market crosses the top or falls below the bottom, the greater the rise or fall. Always consider how long the market has gone up from the limit low, or how long it has fallen from the limit high.
2. In order to think that the balance of time and price is considered to be when two cycles appear at the same time, then there will be a reversal of the trend.
3. Each stock has a unique volatility that dominates the rise and fall of market prices. Time is an important factor in determining the movement of the market, history does repeat itself, you know the past, you can predict the future.
4. An in-depth study of the time cycle period reveals that the stock market operates according to a certain mathematical proportional relationship and the time cycle cycle, and clarifies the relationship between price and time, and also treats the market measurement system differently from the operating system.
5. In Gann's theory, the time period is the first, followed by the proportional relationship, and the second is the form.
The important cycles of the operation of the market can be short-term cycles, medium-term cycles and long-term cycles.
Three different cycle cycles, corresponding to different calculation times. In general:
The short-term cycle consists of hours, weekly and monthly cycles, with 1 hour, 2 hours and 4 hours... 18 hours, 24 hours, 3 weeks, 7 weeks, 13 weeks, 15 weeks, 3 months, 7 months;
The medium-term cycle mainly includes the annual cycle, with a cycle of 1 year, 2 years, 3 years, 5 years, 7 years, 10 years, 13 years, and 15 years;
The long-term cycle is a cycle from 20, 30, 45 to 49, 60, 82, 90 and 100 years.
6. In Gann's theory, the cycle of 10 years is the cycle of market reproduction. Like what:
The emergence of a new historical low should be a decade after an all-time high. And a new historical high should appear after a new historical low. In a bull market, the market is running upwards, so the gold that stays in the trough is usually relatively short-lived. The peak will form a relatively strong adjustment situation, stay for a long time, and it is not suitable to find the position of the peak.
When using Gann cycle theory for market forecasting, the cycle from trough to trough in a bull market is relatively accurate. In bear markets, the cycle from peak to peak is relatively accurate.
Graham's 9 ways to make a single:
1. The return on earnings of the stock should be greater than 2 times the yield of AAA-rated bonds.
2. The stock's price-to-earnings ratio should be less than 40% of its highest price-earnings ratio in the past five years.
3. The dividend payout ratio of the stock should be greater than 2/3 of the yield of AAA-rated bonds.
4. The stock price should be less than 2/3 of the net tangible asset value per share.
5. Total liabilities should be less than net tangible asset value.
6. The current ratio should be greater than 2.
7. Total liabilities should be less than 2 times the net current assets.
8. The average annualized earnings growth rate over the past 10 years is greater than 7%.
9. The profit growth rate that cannot be more than 2 times in the past 10 years is less than -5%.
John Borg 5 Ways to Make a Single:
1. Choose a low-cost fund
Passive funds are superior to active funds. Index funds use a passive investment method of tracking an underlying index, with low research and development costs and low transaction costs.
2. Carefully consider additional costs
There are currently about 3,000 funds in the U.S. market that have no sales commissions and no issuance fees, and John Borg believes that for investors with certain analytical skills, choosing such funds is a feasible solution. Under the premise of correct choice of fund varieties, the purchase of funds without issuance fees is equivalent to reducing the proportion of costs to future returns to a minimum.
3. Don't over-rate star funds
Star funds are the signature of fund companies and one of the most favored factors by investors, but John Borg does not care much about it. Because even if someone can foresee the absolute return of the market in the future, it is impossible to predict the return of individual funds relative to the market, at most the return of index funds.
4. Big is not necessarily good
The first reason is that the scale increases the transaction cost, and the larger the scale, the greater the impact on the price of the stocks held, which will further aggravate the stock price fluctuations in the time-critical transactions; the second is to maintain the liquidity and diversification principle of the fund, the large market value fund has to hold a larger number of stocks with a smaller degree of concentration, and the income that each holding variety can provide is also smaller; the third is that compared with the small market value fund, the large market value fund has higher liquidity requirements, so the stock varieties that can be selected are more limited.
5. Don't hold too many funds
John Borg said there is no need to hold more than 4-5 equity funds, because over-diversification is similar to an index fund, but due to the high cost of equity funds, the final return is likely to be lower than the index.