Please note: GorillaTrades is a registered trademark of GorillaTrades, Inc. Neither WealthJunkie.com, its publisher, nor the authors of these articles have any affiliation with the GorillaTrades service.
Over the weekend, I spent some time reviewing the e-mails I received during my trial of GorillaTrades.
The Gorilla makes 12 of the 14 technical indicators in his program public. However, the last two are left a secret. (Why? To disclose the last two would be like the Colonel giving away his secret chicken recipe!)
The 12 known indicators in their “recipe” are:
- MACD - Moving Average Convergence/Divergence
- Volume
- Moving Average
- Money Flow
- OBV - On-Balance Volume
- Volume/Price Trend
- Volatility
- Volume Oscillator
- SK-SD Stochastics
- Relative Strength Index
- Accumulation/Distribution
- Velocity
Click here to read the Gorilla’s own explanation of these terms and how they are used.
I can read an annual or quarterly report. And every day I am getting better at understanding them. But these 12 indicators are like rocket science According to Wikipedia, the MACD is “computed using two exponentially smoothed moving averages of the security’s historical price, and is usually shown over a period of time on a chart. By then comparing the MACD to its own moving average (usually called the “signal line”), traders believe they can detect when the security is likely to rise or fall.”
Can you define “exponentially-smoothed moving average”? How can you follow their stock picks if you don’t even understand how they picked them?
Modern portfolio theory is elaborate. There are lots of little Greek letters and all kinds of things to make you think you’re in the big leagues. But there is no value added.
–Warren Buffett, as quoted at the 1996 Berkshire Hathaway Shareholders’ Meeting
Day to day price movements in the stock market are influenced by countless factors - earnings, hedge funds, the price of oil, interest rates, new home construction, unemployment, retail sales, and even George Bush. With so many influences on market movements, how can they be predicted in the short term? Are these technical indicators GorillaTrades uses in its “secret recipe” - a rocket scientists’s explaination of the stock market volume and pricing trends - just trying to explain something that really cannot be understood?
I have no idea what the Gorilla’s other two indicators are. But I can guess two factors the Gorilla does not use - price and earnings. Because, in the long run, that would make too much sense.
September 20th, 2005 at 11:54 pm
Summary: GorillaTrades uses technical analyses, the Wealth Junkie prefers fundamental, so does Buffett.
September 21st, 2005 at 3:53 pm
Appreciate your summary, but it’s actually a little more complicated than that.
GorillaTrades sells itself as a service that teaches you how to pick stocks, yet they never explain the “how” part.
The stuff they use is like using quantum physics to bet on where your dog will go to the bathroom - it just doesn’t need to be that complicated.
August 26th, 2006 at 8:25 pm
Mr. Barbara. My mind totally rebelled when you raised some caustic query as to what ” exponential moving average” was. If you do not know that, your should not be allowed to comment on any system using techinical indicators. What a dummy!
Earl McHugh
September 25th, 2006 at 6:35 pm
All of the technical indicators mentioned above can be viewed for free at Yahoo! Finance. They have an excellent tutorial on what the different indicators are at http://biz.yahoo.com/charts/index.html
November 7th, 2006 at 5:51 am
an exponentially smoothed moving average is one that gives a disporportionate amount of weight to the last days price and or volume. for example in a simple moving average you take the last 13, 20, 50, or 200 days total them and then divide by the same number i.e. thelast 20 days closing price/20 gives you the simple 20 day moving average. an exponential moving average could be as follows take the first 19 of the last 20 days closing price add the numbers together then divide by 19. then take this figure add it to the 20th days close and divide by 2 and you arrive at the exponential moving average. In this example the first 19 days constitute 50% of the final exponential moving average and the 20th day constitutes the other 50%. this is somewhat of a simplification but the idea is the most recent price move/s are the most important and therefor should be overweighted in calculating the moving average price.
You ask …..I answered in somewhat simplfied terms so that all readers could understand. EMA can be quite complex depending on the method used for example one could take the first two days of the last twenty add them then divide by two; then take this number add it to the third day and divide by two….ect and so on in this way the 1st day may only be weighted at 2% of the EMA with every subsequent day being a larger proportion of the average with the last closing price being the most important and influential
rich
November 7th, 2006 at 8:52 am
Hi Rich,
Thanks for the explaination.
Wikipedia has a very good page on exponential moving average calculations as well - I have found it to be very informative:
http://en.wikipedia.org/wiki/Weighted_moving_average#Exponential_moving_average
March 28th, 2007 at 12:32 pm
I was searching the web for a site that would offer a little more than what the monkey offers and I found a gold mine. http://www.angeltrades.net I have been buying their picks and making a great return.
April 18th, 2007 at 8:40 pm
I too have my wings, and have been making my money work for me. Angeltrades.net and the guardian have come up with a winning strategy, although my wife still thinks I am picking the stocks.
R. Jones
May 28th, 2007 at 9:30 am
Hello,
One indicator that is missing from your list that Gorilla use is the ADX indicator.
It determines trend, when it’s low in its range, under 23, the stock will change its trend soon.
Couple this with other indicators like MACD and volume with accumulation/distribution and you get the same result, if not better than Gorilla do.
And to beat their entry, only if the stock passes its 52 week high.
One last thing, a quick look at fundamentals to make sure it has a solid base.
Regards,
Andrew Rowe