Tom Dorsey's Trading Tips: A Playbook for Stock Market Success

by Dorsey, Thomas J.

• ISBN13: 9781576600771
• ISBN10: 1576600777
• Format: Hardcover
• Copyright: 2001-06-01
• Publisher: John Wiley & Sons Inc

Summary

A volume of trading tips drawing on the wisdom of Tom Dorsey and his colleagues, whose newsletter and Web site provide insights and research to brokers and investors. It includes coaching on the general market, point-and- figure charting techniques, options strategies, and other topics.

Author Biography

Thomas J. Dorsey is president of Dorsey, Wright & Associates, Inc.

Table of Contents

Acknowledgments	xi
Foreword	xiii
John Hannah
Introduction	1	(8)
Building a Foundation: Point and Figure Basics	9	(22)
Why You Should Combine Technical with Fundamental Analysis	10	(1)
Why We Use Point and Figure Charts	11	(2)
Point and Figure Chart Basics	13	(2)
Point and Figure Tips	15	(5)
Point and Figure Chart Patterns	20	(1)
Adjusting the Box Size on a Point and Figure Chart	21	(4)
The Bullish Percent Concept	25	(6)
Market Psychology	31	(18)
Finding a Discipline	32	(1)
Common Investor Mistakes	33	(2)
Ten Ways of Sabotage Your Portfolio	35	(3)
Our Adaptation of Baruch's Rules	38	(1)
Practice, Practice, and Then Practice Some More	39	(2)
Why Work with a Broker or Money Manager?	41	(1)
Decision Doesn't Dictate Outcome---Use the Tools Properly: That's the Best You Can Do	42	(1)
Magazine Covers	43	(2)
A Diary of Lessons	45	(4)
Market and Sector Applications	49	(38)
The 80 Percent--20 Percent Phenomenon	50	(2)
Why the S&P 500 Is Hard to Beat	52	(1)
Bogey Fever	53	(1)
Do You Know Your QQQs?	54	(6)
Using SPDRs and Other Products to Diversity	60	(1)
Market vs. Sector Timing	61	(2)
Which Side Are You On?: Sector Bullish Percent Charts	63	(5)
It Feels Like the Bullish Percent Should Be at 10 Percent!	68	(4)
Sector Relative Strength	72	(3)
It's an Art, Not a Science	75	(3)
Market Leadership	78	(2)
Dow Jones 20 Bond Average	80	(7)
Essentials of Stock Selection	87	(26)
Four Steps for Initiating New Positions	88	(1)
Stock Evaluation Checklist: Evaluating Technical Pros and Cons	89	(2)
Bullish Support Line	91	(1)
Bearish Resistance Line	91	(5)
Relative Strength: Motorboat vs. Rowboat	96	(1)
Good Stocks Stand Out in Market Declines	97	(2)
Best in Class: Using Peer Relative Strength to Buy the Best Stock in a Given Sector	99	(1)
Compare Your Stocks to the Market---Especially Market Leaders	100	(1)
Buying on a Pullback	101	(1)
Momentum	102	(4)
Using Pre-and Post-Split Charts	106	(4)
Insider Buying vs. Insider Selling	110	(1)
The Quality of the Merchandise Is Important	111	(2)
Risk/Reward Principles	113	(18)
A Free Lunch---Not: Higher Returns Come with Higher Risk	114	(1)
Evaluating Risk/Reward When Initiating New Positions	115	(4)
Catching a Falling Knife	119	(2)
Using Options as a Low-Risk Way to Initiate Positions	121	(2)
Reducing Risk in a Stock---Selling It and Buying a Call	123	(1)
The Mathematics of Losses	124	(3)
Stock Insurance---Purchasing Puts to Protect Your Stocks	127	(4)
Short-Term Trading Techniques	131	(14)
Tactics for the Short-Term Trader	132	(1)
Bulls Make Money, Bears Make Money, But Pigs Make Nothing	133	(1)
Long Tail of Os Down: A Trading Technique	134	(1)
High Short Interest	135	(1)
The Selling Climax	136	(1)
Spin-offs	137	(1)
When the High-Low Reverses up from below 10 Percent	138	(1)
Strategy for Option Expiration	139	(2)
Guideline for Selling Short	141	(4)
Managing Your Investment	145	(22)
The Tortoise and the Hare	146	(1)
Two Heads Are Better Than One	147	(2)
Keeping Turnover to a Minimum	149	(1)
Let Profits Run, Not Losses	150	(2)
Benefits of Position Sizing for Traders: Percent Risk Method	152	(4)
The Hardest Decision Is When to Sell: Taking Profits, Cutting Your Losses, Stop Points, and Trimming	156	(2)
Buy on Rumor, Sell on News: Stick to the Reason You Bought the Stock	158	(1)
How Good Are Your Defensive Skills?	159	(2)
Hedging Your Portfolio with Index Options	161	(2)
No Free Lunch: Selling Calls against Your Not-For-Sale Stock	163	(1)
Augmented Writing	164	(3)
Understanding Options Strategies	167	(26)
The Key to Understanding Options	168	(1)
Definition of a Call and Put	169	(1)
The Options Delta: An Important Term to Know	170	(1)
Call Guidelines	171	(2)
More Call Guidelines	173	(2)
Put Guidelines	175	(1)
More Put Guidelines	176	(2)
Overleveraging an Options Position	178	(1)
When Investing in Options, Buy Time	179	(2)
An Option Trader's Lesson from the Gym	181	(1)
Puts as Insurance	182	(2)
Uncovered Puts: Be Sure You Can Pay for Them	184	(2)
Buy, Sell, Hold, or Hedge?	186	(2)
Selecting the Right Covered Write	188	(1)
Overwriting Long Positions	189	(4)
Other Investment Tips	193	(19)
The Job of the Fundamental Analyst	194	(2)
Being the Inventory Manager	196	(2)
When Old Meets New: An Alternative to the Dogs of the Dow	198	(4)
Investing in Dividend Re-Investment Plans (DRIPs)	202	(1)
Cocktail Party Indicator	203	(3)
All I Needed to Know I Learned from Noah's Ark	206	(4)
To Be Successful, Continually Educate Yourself	210	(2)
Glossary	212	(4)
Index	216