Trend Trade

By: Stock Barometer | Wed, Feb 4, 2009
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2/4/2009 10:04:05 PM

Here's a Trend Trade for Thursday morning...

There's a very simple methodology for trading trends. You wait for a stock to base out, test its lows and then when it recaptures the 10 week moving average, you go long.

How long do you hold? As long as it remains above the 10 week moving average.

Where do you apply your stop? At the 10 week moving average.

The nice thing about this type of trade is that it's slow motion. You can follow it on weekends. Don't need to stress about it during the work week. And if you are stressing about it, then you've invested too much in that one position. That's called the sleep test - it's a good way to tell if you're trading too much money.

Trading is a dangerous game. You can lose large sums of money rather quickly. Even the following stock can get a 50% haircut over night if something negative were to happen to it. You need to consider that in your trading plan. Too risky for you? Lower the initial amount you go in with. Still too risky, then divide your position in half and leg into it. You'll find what works best for you. It just takes time.

Here's the stock I'm recommending:

It's something I've been watching for a while. There are a lot of beaten up stocks out there and as they base and come up out of their base, they make great opportunities.

I know we've been a little slow of late - but that's more a function of the market. If things improve, this service will heat up... So stay tuned.

Regards,

 


 

Stock Barometer

Author: Stock Barometer

www.stockbarometer.com

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

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