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Strategies & Market Trends : KEEP IT SIMPLE TRADING

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To: mistermj who wrote (184)	2/20/2004 2:15:35 AM
From: mistermj	of 321

*** Basic trading framework for sector and index calls. This is the basic trading framework for sector and index calls made here at 3:45p.m EST for the next day of trading.If you are following a signal it would be expected you would enter the position before the close on the day of the signal. 1.Trading signals are meant for a one hour to 3 day time period,with the emphasis on one hour to one day.The signals will often predict gap ups or gap downs.Our intent with the signals is to capture relatively low risk short term momentum moves in an index or sector. IMO it is less risky to use 2-1 leverage and sell into or cover any gap the next trading day.If you are using leverage,bank profits quickly and move on to the next trade. This is a system designed to provide steady base hits...not home runs.Larger profits are possible holding to the EOD with more risk of a reversal. Think of the signals as a possible opportunity to capture 1-3% moves within the next 3 days...with the emphasis being on what you can safely capture the next day.The signals often telegraph intermediate trend changes(3 days to two weeks) so they can be used with other TA to lengthen trade periods.It depends on your style,but I would suggest you think short term until you get a feel for it. 2.Guidelines for trade exits: I recommend being short term oriented but there are opportunities for longer trades if you are good with TA,resistance ect.I can't possibly provide all that so that part is up to the individual trader.Think of the signals as a heads up that you can use to implement your own trading style. For traders sticking to the short term style, holding trades past one day from the signal might occur in a flat market with out the expected follow through.Sometimes follow through is delayed for one or two days.This can get tricky...traders will have to use their own discretion on whether or not to exit the trade. Guidelines to use would be to watch out for bearish candles on long calls and bullish candles on short calls.Counter trend moves with volume and a strong EOD close would be danger signs to exit the trade. Indecision candles can often be held through until the expected move comes the next day.In general,for the short term style,if you have a decent profit the first day...take it and wait for the next signal. 3.Do your own DD.If you use leverage ,make sure you understand how to use it.Bank profits...there is always another trade right around the corner. 4.Set a stop loss to protect yourself.This is a highly individual choice IMO.General guidleines range from 1% to 2%,but the choice and responsibility is up to you. 5.Once again,think of the signals as suggestions of possible trades that could be made in that sector or index.The actual trade is up to you.I will not be available for hand holding or extensive follow ups all the time. I hope this is sufficient for now.Its very hard to communicate these types of things sometimes. Feel free to ask questions.I may have to revise and change this list as we go along.This is a work in progress.

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