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Strategies & Market Trends : Ted Warren's Investolator

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To: WEagle who wrote (1765)8/9/2025 12:52:33 AM
From: James Traylor  Read Replies (1) of 1789
 
Hello WEagle,

I talk about this in my book I just released on Amazon titled, Don't Trade, Investolate. My methods are heavily influenced by Ted Warren. I do have a chapter in my book that is directly related to trading. In it I say if you are going to trade don't swing trade (unless you're already great at it), position trade instead. The reason is you can put up similar or better returns if you position trade with much less effort than if you swing trade. If you position trade, look for the Ted Warren type patterns (long-term base breakouts out of low range bases are my favorite) and have a stop loss that is 10% max below the purchase price (oftentimes I'll cut the position if it breaks below the breakout point for a loss smaller than 10%) and if you don't get stopped out then just ride it until you get a sell signal on the monthly chart (this solves the problem of not having enough profits to cover your losses because monthly charts yield much bigger average gains than daily charts that swing traders often rely on - just use daily charts to time your entry and manage risk).

The reason a trader uses stop-losses is because they are trying to compound their money as fast as reasonably possible and don't want their money stuck in sluggards (and also to manage risk). Some Ted Warren type stocks might meander for years before taking off, while others might drop and never go back up. Some might go up a lot in a relatively short period of time - these are the ones a position trader is trying to catch and oftentimes they go up from the start rather than falling back into the long-term base. The traditional Ted Warren investolator method (which I recommend for most people) is best for people who don't have a lot of time to monitor the market because with that method they don't have to worry about getting stopped out and rely solely on monthly charts which need to be monitored much less closely than daily or weekly charts.
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