Some time ago, a friend of mine came to me and said he thought he had a way to predict stock prices over time.
What followed was a 9 month black hole in my life where I focused exclusely on stocks.
I thought long and hard on how to prove the trading system works. I remember programming it at a table in the corner
of a Chicago Mariott, at the Figi in Zeist, Holland. I played the signals it generated on paper for months.
In the end, I gathered all my friends (the rare lucky (?) few) and had them start trading on my signals.
This advice represents what I've learned along the way and what I would want you to know if you're going to
trade. Learn from my mistakes.
This message system is not a recommendation to buy, or a guarantee of fitness of any stock.
Active Exchanges: NYSE. NASDAQS.
News:
It works. I'm now thoroughly convinced the system works. I turned it loose for the general public, without charge.
(Against the advice of the aforemention greedy friends. They wanted to see the formula to Warren Buffet of all people.)
10X Solid Advice:
1. Don't panic.
2. Check Google, Yahoo, StockCharts.com using Exp Mov. Avg, STO and CCI as listed in the method. Do you see the crossover and trend?
3. Stop trading companies you like. Like only companies with the positive trend. Stocks you liked yesterday are not your friends today. The trend is your friend. Be wary of liking stocks you know. These stocks are not your pet. Stick to the trend not your preference for say, Pepsi. Of course, immediately after I put that in here, Pepsi Americas trended up for a 10$ profit. =)
4. Set a reasonable price. Buy the stock on the 0-50% Skid. Do not pay a premium. Do not pay afterhours fees. Do not pay comissions. Open a Zecco account. It's amazing how much money you can make not paying comissions.
5. When buying stocks, use limit orders, and a discounted price. Do not wait for the stock to go up and buy it on the uptick! Send them as limit orders.
6. Now that you've made or lost unrealized money, what will you do? If it's made money, don't sell it. That whole thing about one in the hand is worth two in the bush is not for stock traders. You know the trend relating birds in the bush. Don't sell it. Not until the trend switches back down. Watch the new high stock on StockCharts.com. Set a stop loss or VTSO if you can. Don't cut your legs off. If your stock is losing, what level will you allow it to go down? Watch the chart. Is it still trending upward? Decide at what level of loss you'll sell the stock off before you begin. 1-2% of your total equity is common. So, if you invest 1000 and you stock loses 10, cut it out. Don't sell a winning stock to keep a losing stock.
7. Expect a three day drawdown when you hit a new 52-week high, or after a stock split. Don't panic.
8. Don't try to take revenge on the market.
9. Watch the trend, both market and stock.
10. Don't panic.
Above my charts on my wall, I have some signs:
I see no reason to sell a rising stock.
No revenge trading.
Margin is not money.
Good companies have more to lose.