abtrends
2009 is just days away which means it's time to focus on having a plan and trading a plan. I know what kind of investor I am, I have a plan, I know what to look for and how to trade it and have only one goal: to raise cash in my portfolio month over month. These are the elements that make for successful stock market investing.
So as I look ahead to the next year, I do so with confidence and excitement. But I also know I have to stay focused on my plan. This means reviewing my four stock market New Year resolutions.
RESOLUTION #1: I WILL CREATE A PLAN BASED ON WHO I AM AS AN INVESTOR
Before you can create a plan, you must determine what kind of investor you are. This is an absolute must!
WHAT EXACTLY ARE YOU TRYING TO ACCOMPLISH WITH YOUR INVESTMENT DOLLARS?
Do you have a plan? What exactly is that plan? The days of "buy any stock and it will go up" are long gone and by the looks of things they aren't coming back anytime soon. In today's market, you MUST have a plan. But the plan just can't be any old plan. It must be one that is based on who you are as an investor and what you are trying to accomplish. So who are you?
Are you an investor?
Are you a trader?
Do you go long only?
Do you go short only?
Do you do a combination of long and short?
These are all questions YOU have to ask yourself. YOU have to DEFINE WHO YOU ARE before YOU can develop a plan. That said, if you're long only, then in times of downtrends, you must be prepared to sit in cash or face some difficult times with your investments. If you're short only, then in times of uptrends, you too will have to sit in cash or face difficulty.
What I teach at All About Trends (www.allabouttrends.net) is how to get to a point where market direction doesn't matter. I want to see your plan take into account both sides of the coin. I want you to no longer have to ask:
Is the market going higher?
Is the market going lower?
I want your answers to the above questions to be "Don't know, don't care, I trade what I see, not what I think, feel or fear. But how do you get to that point?
You get there because you have a plan, are planning your trades and trading your plan. This is done according to the kind of investor YOU CHOOSE TO BE. The way you plan your trades and trade your plan defines the kind of investor you are.
If you want a plan that delivers consistent 4-digit profits month over month from conservative positions based on sound technical analysis, then sign up for my free newsletter at www.allabouttrends.net.
RESOLUTION #2: I WILL TRADE WHAT I SEE, NOT WHAT I THINK, HEAR OR FEAR
To be successful in today's market, it all comes down to understanding that you MUST "Trade what you see, not what you think, hear or fear." This means turning off the TV and staying focused on understanding what kind of patterns make for successful trades and to have the confidence to trade them as they trigger.
My plan is based on three principles:
Uptrend patterns
Downtrend patterns
Changes in trends patterns
And that's all I look for. I don't care what xyz analyst said about a stock, what Cramer had to say in last night's Lightning Round or if I didn't like the service I got at this company's store. None of that matters. All that matters is what the chart is telling me what I do as a result.
RESOLUTION #3: I UNDERSTAND IT'S A MARKET OF STOCKS, NOT A STOCK MARKET
I earned a profit of $32,396 in the past five months. Now as we all know, these weren't stellar months for the market. In fact, they were some of the worst months the market has had since the 1930's. Now what if I told you that only 12% of those trades were on the short side? So how do I earn $32,396 in five of the worst performing months in the history of the market with 88% of my trades on the long side?
That's because it's a market of stocks, not a stock market. Like I said in Resolution #1, market direction doesn't matter. All that matters is finding stocks that have completed set-ups ideal for significant short-term gains and doing what the chart tells me to do.
Even in the most raging bull market, a sector or two may suddenly fall out of favor and then I'll start seeing topping signs on the charts of the industry's leading stocks. This means it's time to go short -- even though the overall market is going up.
RESOLUTION #4: I WILL GET IN, GET MY POINTS AND MOVE ON TO THE NEXT TRADE
That's how to do it in today's market. The patterns I identify allow me to get in at the lowest point possible where my downside risk is minimal. From there, I'm not looking to hit a grand slam. I just want a single here and then move on and hit another single. That's how I have consistent profits month over month with little risk.
Which would you rather have -- $5,000 in gains per month or (1) 50% gain that yields you $5,000 in 3 months? In 3 months, I can earn $15,000 taking small gains and remaining mostly in cash vs. $5,000 in 3 months which requires me to tie up cash and needing a 50% gain in that one trade to get that return. When's the last time you got a 50% return?
It's much safer and easier to rack up significant gains investing only a little per trade and taking a series of small gains in a short time frame than hoping for a big gain and often needing more time to get that return. And by the way, while I am holding looking for that big gain, my cash is tied up in that trade and I am missing many other good opportunities.
I just try to keep it simple. I look to minimize risk by investing 200 shares in each trade and hold them for a 5 point gain. That's $1,000 per trade. And since I am only looking for five points, I usually get this within a week -- sometimes by the next day. And then it's on to the next trade. If you do just four or five trades per month like this, you'll have significant profits. That's it -- no sitting there holding it through earnings or a correction or an analyst downgrade. Get in, get your points and get out and look for the next trade.
For more information, sign up for my free newsletter at www.allabouttrends.net.
So as I look ahead to the next year, I do so with confidence and excitement. But I also know I have to stay focused on my plan. This means reviewing my four stock market New Year resolutions.
RESOLUTION #1: I WILL CREATE A PLAN BASED ON WHO I AM AS AN INVESTOR
Before you can create a plan, you must determine what kind of investor you are. This is an absolute must!
WHAT EXACTLY ARE YOU TRYING TO ACCOMPLISH WITH YOUR INVESTMENT DOLLARS?
Do you have a plan? What exactly is that plan? The days of "buy any stock and it will go up" are long gone and by the looks of things they aren't coming back anytime soon. In today's market, you MUST have a plan. But the plan just can't be any old plan. It must be one that is based on who you are as an investor and what you are trying to accomplish. So who are you?
Are you an investor?
Are you a trader?
Do you go long only?
Do you go short only?
Do you do a combination of long and short?
These are all questions YOU have to ask yourself. YOU have to DEFINE WHO YOU ARE before YOU can develop a plan. That said, if you're long only, then in times of downtrends, you must be prepared to sit in cash or face some difficult times with your investments. If you're short only, then in times of uptrends, you too will have to sit in cash or face difficulty.
What I teach at All About Trends (www.allabouttrends.net) is how to get to a point where market direction doesn't matter. I want to see your plan take into account both sides of the coin. I want you to no longer have to ask:
Is the market going higher?
Is the market going lower?
I want your answers to the above questions to be "Don't know, don't care, I trade what I see, not what I think, feel or fear. But how do you get to that point?
You get there because you have a plan, are planning your trades and trading your plan. This is done according to the kind of investor YOU CHOOSE TO BE. The way you plan your trades and trade your plan defines the kind of investor you are.
If you want a plan that delivers consistent 4-digit profits month over month from conservative positions based on sound technical analysis, then sign up for my free newsletter at www.allabouttrends.net.
RESOLUTION #2: I WILL TRADE WHAT I SEE, NOT WHAT I THINK, HEAR OR FEAR
To be successful in today's market, it all comes down to understanding that you MUST "Trade what you see, not what you think, hear or fear." This means turning off the TV and staying focused on understanding what kind of patterns make for successful trades and to have the confidence to trade them as they trigger.
My plan is based on three principles:
Uptrend patterns
Downtrend patterns
Changes in trends patterns
And that's all I look for. I don't care what xyz analyst said about a stock, what Cramer had to say in last night's Lightning Round or if I didn't like the service I got at this company's store. None of that matters. All that matters is what the chart is telling me what I do as a result.
RESOLUTION #3: I UNDERSTAND IT'S A MARKET OF STOCKS, NOT A STOCK MARKET
I earned a profit of $32,396 in the past five months. Now as we all know, these weren't stellar months for the market. In fact, they were some of the worst months the market has had since the 1930's. Now what if I told you that only 12% of those trades were on the short side? So how do I earn $32,396 in five of the worst performing months in the history of the market with 88% of my trades on the long side?
That's because it's a market of stocks, not a stock market. Like I said in Resolution #1, market direction doesn't matter. All that matters is finding stocks that have completed set-ups ideal for significant short-term gains and doing what the chart tells me to do.
Even in the most raging bull market, a sector or two may suddenly fall out of favor and then I'll start seeing topping signs on the charts of the industry's leading stocks. This means it's time to go short -- even though the overall market is going up.
RESOLUTION #4: I WILL GET IN, GET MY POINTS AND MOVE ON TO THE NEXT TRADE
That's how to do it in today's market. The patterns I identify allow me to get in at the lowest point possible where my downside risk is minimal. From there, I'm not looking to hit a grand slam. I just want a single here and then move on and hit another single. That's how I have consistent profits month over month with little risk.
Which would you rather have -- $5,000 in gains per month or (1) 50% gain that yields you $5,000 in 3 months? In 3 months, I can earn $15,000 taking small gains and remaining mostly in cash vs. $5,000 in 3 months which requires me to tie up cash and needing a 50% gain in that one trade to get that return. When's the last time you got a 50% return?
It's much safer and easier to rack up significant gains investing only a little per trade and taking a series of small gains in a short time frame than hoping for a big gain and often needing more time to get that return. And by the way, while I am holding looking for that big gain, my cash is tied up in that trade and I am missing many other good opportunities.
I just try to keep it simple. I look to minimize risk by investing 200 shares in each trade and hold them for a 5 point gain. That's $1,000 per trade. And since I am only looking for five points, I usually get this within a week -- sometimes by the next day. And then it's on to the next trade. If you do just four or five trades per month like this, you'll have significant profits. That's it -- no sitting there holding it through earnings or a correction or an analyst downgrade. Get in, get your points and get out and look for the next trade.
For more information, sign up for my free newsletter at www.allabouttrends.net.