First, you do NOT have to have all your money in the market at all times to make a fortune trading.



Second, you should not have all your trading funds in the market at all times ever!

Third, wait for a stock to come to you. What I mean is for it to be done falling to play the upside, or done going up to play the downside " but don't enter in the middle of nowhere on a trade.

I like to use about half of my funds to trade and have the other half available for some fantastic, unexpected buying opportunities that might come around once in awhile or to double up on a trade that has not exactly worked out as fast as I had planned.

What I am about to discuss I have slightly touched on somewhat in a recent newsletter, but since timing is so critical, and I still see seasoned traders after years of trading still not getting this" I feel the need to stress it in more detail.

When I wrote my 40 CENTS DVD series, it was in a hopes of helping students see the power of waiting for stocks to reach the perfect point to play them. Where is that perfect point? It is really not that hard to find. I like to look at support and resistance using candlesticks. To me I want to get in at the very beginning of a run to the upside or a fall to the downside.

UPSIDE:

I will wait for the stock to stop falling. I look for a market close doji or open candlestick at support as a sign it may have stopped falling. However, it is critical to confirm it with a continuation pattern the next trading day. The next day if the stock continues up I enter the trade intra-day for the upside. If it is moving up and down and I am not quite sure, then I use the high of yesterday to give me an entry point. If it breaks that high, I can enter. However, if it is not going up DO NOT ENTER" but I see so many students enter here anyway and I just want to scream WHY DID YOU DO THAT!

DOWNSIDE:

I wait for a sign that the stock has stopped rising, a market close doji or closed candlestick at resistance as my sign it may have stopped going up. Remember I still need to confirm it the next day. The next day if the stock continues to fall, I can enter the trade intra-day to play the downside. If it is moving up and down and I am not sure, then I use the low of yesterday to give me a confirmed entry point. If it breaks that low, I can enter. It is really easy to set an alert to my cell phone to let me know it hit that point, instead of watching the stock all day to see if I can enter the trade. However, if it is not going down DO NOT ENTER" just use common sense before entering a trade and profits can be yours!

OTHER CONCERNS:

Of course you want to look at other trading indicators to confirm direction" and there are a lot you could pick from. My rule of thumb is to just pick 5 you love and that's ENOUGH! Here are some of my favorites:

1. Support and Resistance

2. Using candlesticks with number 1

3. Volume

4. Exponential Moving averages 4 & 8

5. Bollinger Bands

Then always consider market conditions. If the market is too high and the signs say it has to fall (sentiment indicators) then look for stocks that follow that market at resistance to play the downside. Don't try to play stocks to the upside with this scenario" again just use common sense and go with the FLOW of the market.

Remember some stocks do not follow the market. This means if the market is going down they go up, they do the opposite of the market. In this case you should already be able to see that is happening so you would do the opposite of the market for the trend on these stocks. An example is OIL; if the market is running up OIL is usually running down in price, etc"

Some stocks have compelling reasons to run up even against market conditions, such as a stock running into an earnings report or a stock split, but the market is due to fall. In this case set your bail alerts daily and if it turns over get out of the up trade fast. However, you can play these against the market falling or about to fall if you are good at exiting fast if the trade goes against you. If you tend to stay in the trade too long don't play trades against market direction even if the stock has a compelling reason to do the opposite. Wait until you are more seasoned and understand that pulling the plug when a trade goes wrong is critical, not to mention it can be very profitable when you exit and switch hats to play the other direction.

I wish you huge success trading. Sometimes the simplest things are the most important. Buy low " sell high! I hope to see you soon in a live class. Below is the schedule for my upcoming classes.

Happy Trading,

Darlene with BetterTrades