Trading Habits/Strategy:
All JIMO and FWIW- Use at your own risk!!! I do not recommend buying any stocks ever!!!
Multiple Entries - Taking smaller entries minimizes risk while taking a position in a trade and it allows room to "Average Down" in the case the price declines further.
(With $10,ooo to invest - Enter $2,000 at a time etc...)
Buy on support(MAs- 5, 20, 50, 100, 200) /-or on the dips
Averaging Down - Buy 10,ooo shares @ .01 = $100
Buy 20,ooo shares @ .005 = $100.oo
Totals = 30,000 shares - $200.oo investment - "Average Cost Per Share" is .0066
Never Overinvest - Invest modestly and only what you can afford to lose. I like to keep less than 10% of my capital in any one trade.
100% RULE - Sell Half of holdings at 100% profit. - Free Shares/No Risk to Original Investment
Know when to take profits. - Locking in some profits during an increase is a good practice IMO. - Also taking profits at resistance levels (Moving Averages, SAR etc) is suggested.
Sell at the ask when possible. - If you are selling into a bullish run then it is very possible to get filled at the ask. Many traders put in their sell orders at specific prices in advance as well. - It is standard to sell at the bid and buy at the ask but this standard is not by any means a rule.
Buy the dips not the peaks. - Buying the peaks will result in losses the majority of the time. Certain exceptions are made for short term Momentum plays where the RSI 14 is above 70. - Many traders say "Wait for it to come back to you".
(Buy on support)
Stop Losses - These should be utilized and managed diligently in an effort to "Minimize Loss" on bad entries. - If you are buying "support" then a stop should be placed just below.
"Trailing" Stop Loss - As the Price rises, so should your stop loss. This attempts to insure earned profits as we have all had profits only to lose them on the re-trace. - Place stop a percentage/number below current price, MA, BB etc...
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Jrods Method
Everything I could think of that is relevant.
I really am an open book as anyone can watch my posts and see me follow my own strategy as I have previously posted it.
I do this because I am making money through this strategy and my intention is only to share what has made me profitable.
FWIW...
The 20 day moving average is my main entry/exit indicator and I do not like to hold beneath this MA 20.
The reason is because while studying charts, I have seen many runs where the price used this MA 20 as support and was the lowest point during an uptrend - or best entry point.
But once the Price crosses below the MA 20 the price tends to decline.
The "swings" that I play involve selling the peaks or as close as I can get to them, and I am aiming to reload at the MA 20.
While I am reloading I use an "Averaging Down" strategy in an attempt to get the lowest entry possible.
This means I load up in multiple transactions and as the price declines.
I start reloading at my perceived support or low point and if it dips lower I buy this cheaper price which lowers my "average cost per share".
At this point the price will either retain the 20 day moving average support or the price will cross below it and decline further.
If it retains the 20 MA support then I am loaded for the next upswing.
If it crosses below the MA 20 support then by my rules I must sell to minimize my risk/loss.
As you can tell I am simply playing the trend of the MA 20 but attempting to only hold the upswings and average down the downswings....within this MA 20 trend.
I use trend lines to help spot the change in sentiment for these swings as well as breakouts, entry/exit points etc...
I do not typically use patterns (triangles. wedges etc...) although sometimes they do inadvertently show up in my trend lines as trend lines are used to draw patterns.
Sometimes I will post a test of a trading strategy like the current "Wolfe Wave" but I never suggest trading by these tests. All are welcome to follow it with me and form their own opinions and if I find it to be successful I may incorporate it into my trading strategy.
My trading strategy comes from a gathering of many different styles from candle sticking to mathematical trading and everything in between. A great man once said "study every style you can but take only what you find to work for you".
One suggestion I have made many times is....
always sell 50% if you make it to 100% profit and play with "free shares" or earned money instead of original capital. This eliminates the risk to your original investment capital and guarantees that you will not lose on this trade.
I will admit I will hold further than 100% sometimes myself but this is when I feel very confident about the trend. (I should not break this rule but sometimes I get greedy...lol)
Another thing I suggest is using stop losses for any trade in order to "minimize risk"(a price where you will not hold because it does not fit your criteria any more).
Also along the same lines and a great way to "Maximize profits" while taking the guess work out of where to sell is:
"Trailing Stops". Same as above,- as the price climbs, so does your "Stop loss". Follow by percentage or ticks.
If you cannot use electronic stop losses then a white board and diligence work just as well in fact that is what I do. lol, and right now my stop for BKMP is a closing price of .0008. Should have a good idea of where it will close before the end of the session and I will trade accordingly there.
There is a lot of well thought out Math in my trading strategy and I sincerely believe the odds are in my favor because of these rules as I have listed them and I attribute all profits to this strategy as well.
I did not have anyone teach me and I have studied and researched to come to these conclusions from the ground up for about 8 years now. This represents literally thousands of hours of back-testing (I am kind of slow...lol)
Another thing is while charting I consider Moving Averages to be simply support/resistance indicators.
I only use the MA 5, 20, 50, 100 and 200 on every chart and every trade.
The MA 20 I covered but the MA 5 is used for short term, the MA 50 is used for medium term and the 100/200 are considered longer term indicators.
From there you will see me use the MACDs a lot. MACD means "moving average convergence/divergence" and it shows the relationship of any two moving averages whether bearish/bullish, Crossing over or converging/diverging.
I use the short version MACD 2,4,9 because it has a very specific relationship with the 5 and 20 day moving averages. As the price crosses above/below the MA 5 the faster line of the MACD 2,4,9 also crosses above/below the 0 point. This can be a very handy tell.
The same can be said for the slower line MACD 2,4,9 and the MA 20.
I also use the longer MACD 12,26,9 faster line above/below 0 in relationship to the price above/below the MA 50. This MACD should be above 0 and bullish for any given trade.
In addition to these MACDs, I also use both the short and longer MACD histograms to watch for convergence/divergence and a change in direction (short term) as well as divergence of price to pressure.
Another thing I rely heavily on is the RSIs.
I use the RSI 2 as a short term indication of strength. It measures strength today as compared to yesterday in essence.
Entries tend to be at the dip of this RSI 2 for a low point and visa versa for exits and depending on other factors of course.
The longer RSI 14 should be above the 50 line for any given trade as this shows bullish strength and a buyers market IMO.
When the RSI 14 crosses above the 70 line many times the Price will have a nice pop at the same time. This can make for nice profits and a good swing trade but ultimately longer term traders sell this oversold condition so it should also be thought of as an exit point.
Also, When the RSI is above 70 I call this the "Momentum Zone" because this is when a stock tends to see its largest increases.
This RSI above 70 condition or "momo zone" can last for quite some time driving the price higher and higher for a large run. As long as the RSI 14 remains above the 70 line I expect the price to continue climbing.
I use a 20 day Moving Average overlay on this RSI 14 as a signal line. When the RSI 14 crosses below this signal line (MA 20 overlay) and/or the 70 line, this is a sign that the price is about to consolidate and there is cheaper prices coming. (coming down from overbought)
In addition to the "loss of momo" signal I just described, the MA 20 overlay on the RSI 14 can also be used to spot a stock coming out of oversold territory.
It works the same but the RSI 14 is beneath 30 (oversold) and it crosses above 30 as well as the 20 MA overlay (or "signal line") representing a stock coming out of oversold. This may be a good longer term entry spot.
A final note on this 20 MA overlay on the RSI 14 is at times of a down/up trend, the signal line can support/resist the RSI 14 itself.
You also may notice I use a 20 MA overlay on my MACD 12,26,9 but this has very little application except to enhance my view.
A criteria I use for any trade is to get a feel for dilution through the use of the Accumulation/Distribution Indicator and the On Balance Volume Indicator. (I may look at other indicators as well but this is my main tool)
I want my ACC/DIS and OBV to be bullish and climbing for any given trade.
I also use a MA 20 overlay (signal line) on the ACC/DIS and the OBV. The MA 20 signal line should appear to support both the ACC/DIS and the OBV.
One note is many times the ACC/DIS will crossover the signal line and rise before the OBV follows and on occasion it has appeared that the definitive crossover of the OBV may be the signal of an up move coming, in this situation.
If you got this far then you now know how I trade and why I do it this way and as I said, I have nothing to hide and I have made myself an open book by this.
BTW, I put this all in one place as this removes any confusion on what I do, how I do it and Most importantly why I do it.
If anyone reads this post diligently then they will understand my opinions well at any given time by just a glance at my charts as I do not break my rules...as a rule...lol
I hope for good profits for everyone and I think by this post I have proved this as well.
GLTY and I am always willing to answer questions or explain something or even learn a lesson should the case arise. I want to be the best trader I can be and pride gets in the way of this so I will swallow it as needed although sometimes I can be a little stubborn.
I am probably the most transparent person on IHub now per this post but as I said...I have nothing to hide. All I do is follow these rules and post accordingly.
ALL JIMO and FWIW (I am not a professional of any kind and this only represents MY OPINIONS AND STRATEGIES - use at your own risk)
I do not recommend buying any stocks ever!!!
This is intended for study purposes and all who read this should form their own opinions accordingly.
Jrod
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Disclaimer
I DO NOT RECOMMEND BUYING ANY STOCKS EVER!!!
Everything seen here represents my opinion and only my opinion and it should not be mistaken as investment advice.
I am not licensed nor am I a professional in any way. I am just an average Joe with an opinion that may or may not be accurate.
I share my opinions for the purpose of study and I do not recommend using them outside of paper trading (Practice trading with fake money).
I recommend all who read this form their own opinions on anything seen here accordingly.
Any attempts to invest by anything seen here can and/or will result in the loss of ALL of your money.
