We have lots of experienced traders on MoneyAM who would be glad to help if you have any trading questions.

i have been looking at a company that has taken my eye of late the epic is AFN i dont now much about it,the picture of the share does look good an i have a little money that a granma left me in a jam jar...have you any comment pleese.

thank u a novice just starting out invester looking to day trade fuull time in about 10 years time.i would like to buy about 500 shares for a rainy day some one said phil me boots but i dont want to be to greedy i would like to leave some for other.some people say that a new person has bean in charge for some time and he nows what he is doing after taking over from some one that made a muck up and they called him a bald headed old git....i dont like people bean called names it is not veeery nice.
Have got to get back to my teletext television to update my picture on this firm.

rick a newbie

Croc, I appreciate your time and trouble in answering my question.I tend to agree with you on the wider basis with construction, many advisors are still encouraging 'buys' in this sector and it may seem unfair but it strikes me a bit like high tech was a couple of years back - being hyped too high and for too long - particularly for those NOT looking at trading on a very short term basis. County & Metro. needs more research on my part, but I have doubts.
Many thanks!! Stockbunny

Thanks stockbunny

Thanks for that, Croc. Lots of good info on those links. I agree about level 2 books. There's nothing. I'll just have to try and learn as I go.
Aside from my WMY short (stop in place - only a small trade coz this stock has a tendancy to gap) I'm flat at the moment. I agree the market's not falling yet, but on so many stocks I see bearish oscillator divergence. Also, the LOG charts of many indices (including FTSE, CAC and DOW, but not S&P) are up to, but not beyond, their long term downtrend lines. Am I giving too much weight to these? Should I stay with things while they're still inching up, because if you stay too long you give a lot back before it's clearly time to be out. I wanna go to the party, but I want to leave before there's any trouble, if you know what I mean.
After belatedly joining the rally, I've taken my (small) long profits and I'm just going to wait and see for a while. No position is a position etc.
ZOLTAR

btw my nephew told me a joke a few days ago.....a bloke goes into a cafe and says 'I'll have a crocodile sandwich please, and make it snappy'
Apologies.

What does 'cover' mean.
i.e. to cover my shorts or longs etc.

to cover your position means "to close your position"

ie if you are short 'have sold' 100 shares. then, when they have fallen far enough and made you very happy because you are short, you buy them back for less 'cover your short position' and pocket the difference. this is usually done on a mobile phone whilst down the pub with all your mates ;).

To 'cover' can also mean to cower behind the sofa under a very snug warm blanket sucking your thumb whilst the market moves against your position.ie A bit like my SPX shorts are doing at the moment! ;)

Croc

do you do anything with FX at all?? i wouldnt mind hearing how you approach that if you do.

cheers
fred

Zoltar, :-)

fredbear
Nope nothing with currency trading but my colleauge David Jones (Limpsfield Chartist) was a currency trader in the city, I believe he trades the Euro quite often as it tends to trend very well. I will ask him to say hello on here!
May well look at it the future as the TA I use for indices seems to do the same job.
Thanks
D.

Mega Bucks -- yeah, right! MM

:-)

Thanks fredbear.

I got a question for you. Why do most of the stocks on AIM have such lage spread between us the cutomer and the market makers.


Maybe we could set up our own little in house transfer agency adverttising here if we want to buy or sell......the two parties if they have the time could meet up outside fill in the transfer forms sign them them hand over da cash and hey bing no middle man any more !

good morning all, how does a company with a market cap of 4 million trade at the same price as a much larger company?

Mitch1967

Way back, when market makers (ex. jobbers) did exactly what was they were supposed to do - they made markets in securities. Widget plc might have been quoted at say 30 - 36. Six points on thirty is a large turn but it was (arguably) justified when the jobbers were actually making a market. Their profits came from the skill in matching the book over time and the turn could be warranted.

Today when so many markets are in reality matched bargains - and I am talking of fully listed and AIM stocks, not those officially designated matched bargains - there is no justification whatsoever for extravagant spreads.

These days business is simply just not transacted unless the market maker knows or believes he can match his position almost immediately. He will not "go out on a limb", be it short or long, as did the Merchant Ventures of old and that being the case there is today no case whatsoever to be made for spreads of 10, 20 or 30%. Although, at a squeeze, there could be a case that there is a lot of uncertainty involed in buying AIM listed stock, hence the spread.

danny

Its all do to with the number of shares in issue.

e.g. co. A and co. B have a share price of 200p.

If co. A has 1,000,000 shares in issue them mkt cap is 2 (share price) x 1 million (no. of shares) = 2m

If co B has 5,000,000 shares in issue then its market cap is 2 x 5 million = 10 million

So the share price is not an indicator of mkt cap

removed - Limpy beat me to it ;-)

Zoltar,

Go on one of Croc's one day L2 courses..it costs more than a book but is I believe well worth it. Croc is too shy to market his own services. Limpy and Bullie do very good one-day courses as well..check them out.

As to market direction, here's something I posted on the other traders thread this am which may be useful, bearing in mind that the US mkts "tend" to lead the uk mkts...

TomL - 16 Sep'03 - 08:30 - 37 of 140

Greenspan "talks" again today. This reminded me of my favorite American market commentator, Brian Carver of Market Clues.

Below is his take for today (including his words on Greenspan) principally vis the S&P 500. You can get a 90 day (3 months) free trial subscription and the subscription price is not demanding either!

Market Clues website for a free trial is at www.marketclues.net. Here's what Brian had to say today:-

"Stocks: Out of Gas?

The market attempted to continue rallying Monday morning, but ran into stiff resistance at about the halfway retracement of last week's range. Money Flow turned bearish in most indices (it was still positive in the Dow, but didn't translate into higher prices even so).

That turndown at the 50% retracement level is quite bearish because it leaves open the distinct possibility that last week's slide was actually wave 1 down in the second major leg down in the bear market. The implication there is that the rally into the 8th of September completed wave v. Unless the market is able to show more strength here, we're going to assume this more bearish interpretation and expect the market is in a countertrend bounce within what could be a severe move down. That puts stiff limits on the upside here and opens the doors to a strong move to the downside once this countertrend bounce is finished.

The analogy to the Japanese Nikkei chart of a decade ago continues to be eerie. During that move of the 'Nineties, the Japanese market rallied 31% off its low before rolling over and plunging to retest its lows. To date, the S&P 500 has rallied off its low you guessed it! 31%!:

("http://www.constant.com/~bcarver/n22520030915.gif")
("http://www.constant.com/~bcarver/spx20030915.gif")

The piraz.com site took their chart of Fed repo activity down, unfortunately, before some had a chance to view it. We will explore the possibility of tracking this data in the future now that it's clear that Alan Greenspan has become such a disruptive force in the stock market. There was an article published in June which discusses in more detail the close correlatiion between repo activity and rises and falls in the stock market: Repurchase Agreements and The Dow by Michael Bolser

("http://www.financialsense.com/editorials/bolser/2003/0602.htm").

For new subscribers and those who missed it, a link to our weekend comments: Detailed Comments Page . . . ."

TomL....:>)

And if you are into position or swing trading, then you all may be familiar with Jim Slater's stuff on stock selection.
PEG Factors (price:earnings ratio divided by growth in earnings)

Fair value on a PEG is 1.0; below 0.75 is regarded as especially interesting (ie definitely a stock to shortlist and subject to other constraints that MUST be passed) and >1.25 is getting expensive.

PEG factors should never be used on their own and the whole process (including all other constraints used with an array of good worked examples) is extremely well set out in Jim Slater's definitive guide, Beyond The Zulu Principle - Isbn 1 85797 552 9 Orion Books priced 19.99 (may cost less now).

Jim Slater's mandatory constraints include:-

1. Does the company have at least a 4 year pattern of growth, even if forward earnings prospects have to be combined with past to achieve the minimum requirement? You see from this if a company has been awarded a PEG that is an achievement in itself. Less that half the all-share constituents qualify. Its quite a hurdle in that sense;

2.A prospective PER of not more than 20?

3. Strong cash flow? ie are earnings being turned into cash..your Enron accounting is out the window (remember this book was first published in 1996);

4. Low gearing (ie not in excess of 50% or if so only allowed if cash flow is very strong);

5.High relative strength? When I first read this some years ago, I gave it a wry smile because it was clear that Jim Slater understood some technical indicator was needed to avoid getting into "value stocks" whose price got stuck in the same place for a long time. The constraint is the rsi in the previous 4 weeks must be positive (ie rising) and the prior 12 month rsi must be positive plus above the 1 month. As you know, he's simply making sure that he's not the only investor getting active in the stock with this constraint;

6. Competitive advantage. This requires no explanation except to say that high ROCE readings and good operating margins are usually the clues to support this constraint. Its a case of seeing whether a stock has these readings and finding out what precisely generates them or, if not, being careful about the whole package.

7. Directors dealings. Buying directors is highly desirable, the absence of selling is mandatory.

There are other constraints which are either highly desirable or bonus factors that he lists.

Hope the above gives you and others a small taster of what's packed into this approach. Sorry if its too long, not intended.

Wishing everyone a very good day.

TomL.

thanks limps. it all makes sense now