Let's make 2012 your best stock trading year ever!
The What’s New at Stock Trading Warrior Newsletter brings you stock trading news, analysis and tips. In this month's newsletter you'll find information on the following:
- How Much Should You Invest in Any One Stock?
- What Makes a Stock Go Up?
- STW Comedy Corner
- Are Commission Fees Eating Away at Your Portfolio?
- Stock Pix - Hot or Not?
Each month beginning in January 2012, the Stock Trading Warrior Newsletter will focus on developing part of a strong,
stock trading system
to help you create or fine-tune your stock trading performance.
The Stock Trading Warrior's Guide
to How Much Should You Invest
in Any One Stock?
Since the March newsletter, I hope you've had a chance to work through Step 3 of your Stock Trading System -
How to Read Stock Market Trend.
Once learned, the skill of reading stock market trend will increase your success by giving you solid judgment about when to enter a position and when to stand aside. It's a mindful, Warrior investing practice.
If you've moved through Step 3, then you've done the following:
- looked at several indicators for reading market trend, like moving averages for the Average Directional Index and picked one;
- picked an index to apply the chosen technical indicator;
- gotten into the habit of looking at the index and reading the current market trend.
Don't forget, I've also added a new webpage that I update each day during the week with a traffic light indicator letting you know when to enter new long positions, pause on positions or take short positions. This can help to verify your calls on what the market's doing. Visit the page at:
Free Daily Stock Market Direction Signal.
At this stage, and moving on to Step 4 of building a Stock Trading System, it's important to know how much you'll invest in any one stock position. This is called position sizing, and in this area you can control a good amount of the risk of stock investing and maintain a higher comfort level with your stock positions.
If you're ready to get started, the first step to position sizing is to have a good understanding of how much risk you can live with by reading the
Risk Management Position Sizing Primer
The next step is understanding what position sizing is and you can read about that on the webpage:
Position Sizing - Taking Control of Your Portfolio.
If you're ready to position size like the professionals go to
Stock Market Portfolio Position Sizing.
There you'll learn that position sizing can be easily calculated and you don't need position sizing software to do it. All you need is an Excel spreadsheet.
Next month, we'll cover Step 5 in creating a Stock Trading System - Having a Written Stock Investing Plan that you can use for clarity around your trading rules and goals to increase your wealth.
What Makes a Stock Go Up?
I recently developed a video presentation called "What Makes a Stock Go Up?" In it, I talk about what is really the cause of a stock price rising along with three characteristics of what to look for in a stock chart.
You'll find the video and supplementary resources for finding stocks that go up here:
What Makes a Stock Go Up?
STW Comedy Corner
Two women were walking through the woods when a frog called out to them and said: "Help me, ladies! I am a stockbroker who, through an evil witch's curse, has been transformed into a frog. If one of you will kiss me, I'll be returned to my former state!"
One woman took out her purse, grabbed the frog, and stuffed it inside her handbag. The other woman, aghast, screamed, "Didn't you hear him? If you kiss him, he'll turn into a stockbroker!"
The first woman replied, "Sure, but these days a talking frog is worth more than a stockbroker!"
Are Commission Fees Eating
Away at Your Portfolio?
If you feel like the online brokerage fees are eating away at your portfolio and you aren't using the fancier services some of them offer, consider a deeper discount brokerage like Zecco.com or TradeKing.com (Switch to TradeKing and get up to $150 in transfer fees reimbursed.) I happen to have accounts with both of them and enjoy the low commission fees of $4.95 per trade! Both of these brokerages have made huge strides in their services, have some powerful investing tools and community forums and even offer incentives for switching over like free cash or paid transfer fees.
Zecco.com offers the following: Stock Screener, ETF Screener, Mutual Fund Screener. The screener capabilities also offer technicals, candlestick chart patterns, performance and Zecco sentiment. Very easy to understand platform with the ability to save scans.
TradeKing.com (Switch to TradeKing and get up to $150 in transfer fees reimbursed.) offers the following: Options Scanner, Backtesting Screener, ETF Screener, Mutal Fund Screener, Stock Screener - easy to use predefined stocks or limited customizable abilities for technicals.
If you're paying more that $4.95 per trade, you owe it to yourself to look at these two brokerages.
Stock Trading Warrior Pix
Hot or Not?
GA (Giant Interactive Group, Inc) set up in late March with a buy price of $5.25. It's now up 5% from that buy point. We'll watch this stock and report back about it's performance.
ADX Double DI pick,
Aurcana Corp. (AUNFF) did not hit the buy price of $1.09. The buy strategy outlined in
The Stock Trading Warrior's Guide to Finding the Biggest and Best Stock Market Gainers
prevents a trader from getting into a stock if the price doesn't show signs of follow through. This technique has terrific value for preventing losses by keeping you out of lackluster trades.
Cost Plus, Inc. (CPWM) was a stock pick in January that earned a 17.84% gain when it was sold in February. In the middle of March the stock became a buy candidate again. As mentioned previously, when a stock has earned you a gain and is in a nice upward trend, it should remain a candidate for re-purchase. If the price moves above the previous high after pulling back it becomes a candidate. In this case, CPWM's price reached a new high on March 14th and 22nd - two opportunities to buy before it gapped up on the 23rd. If CPWM was not purchased before the gap, it's still a candidate for purchase because it's continuing to move in a trend.
The ADX Double DI Strategy looks for stocks like the ones discussed above that are setting up for strong momentum plays to hold for a week or two - up to several months. The ADX Double DI Strategy is described in detail, along with other trading plan strategies in the book:
The Stock Trading Warrior's Guide to Finding the Biggest and Best Stock Market Gainers Using the ADX Double DI Strategy.
Comes with a full money-back guarantee if you're not completely satisfied.
Click here for more information about the ADX Double DI Strategy ebook.
Don't forget to look for next month's newsletter for more current stock market news, analysis and Step 4 of
How to Create Stock Trading Systems.
If you have any stock trading questions at all, please submit them on the
Stock Trading Warrior contact page.
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