| The
Traders index is your guide to better investing by providing
the user with a complete set of rules for trading these
dynamic markets. |
| Never
chase a market. |
If
you are considering a trade to either buy a stock or
mutual fund from a money market or cash position and
there was a huge rally during the day, chances are that
if you enter a long position, the following day your
position will be a losing one. The reason has to do with
short term market players who were long at the beginning
of the rally and are now looking to take profit. |
| Sell
into strength and buy into weakness. |
This
is a general rule used by large institutions These companies
trade large blocks of stock and in order to move out
of a position or into one they need to have volume on
their side to do it. You can do the very same thing.
If the market is in a rally and you own shares in a long
position, this is where you will need to sell with a
high asking price. The market will move up and into your
position and the fill will be exactly what you wanted.
You should never plan on hitting the exact top of a market. |
| The
trend is your Friend |
Have
you ever heard of this before? Chances are that you have.
So what does this mean? It really depends on what kind
of moving average is important. Some long term traders
look at a simple 200 day moving average. If this is your
choice then you need to be patient and decide on how
much above or below the 200 day moving average a market
can go. Generally speaking 2 to 2-1/2 years is the normal
range for a long term trend. Shorter trends can create
trading opportunities as well. You will need to know
which moving average works best for your temperament.
A very short moving average would be 13 period exponential
moving average. A 20 or 50 period are also used with
great success. |
| |
|
Products 
