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Mikey's Short Term Trading Rules

1) Make up a list of stocks, commodities or ETF's to trade. This list should be names that have good earnings and high relative strength.
2) Monitor this list and throw out the weaker names
3) Buy only stocks or ETF's that are intermediate and daily up (green) and the market is Daily and intermediate term up (green)
4) Buy pullbacks on these stocks to the 20 and 50 day averages
Usually you get 4 to 6 20 day pullback buys and 2 or 3 50 day pullback buys in an intermediate term trend
5) More agressive traders can buy the 7 day average in the first 3 to 8 weeks of the uptrend.
6) Buy pullbacks not runups. A buy should not be easy or exciting but difficult and somewhat scary. DO NOT CHASE
7) Place stop at 5% below the buy price. Do not remove
8) Sell 3 to 5 days after the stock price takes out its most recent 2 week high with at least 15% gains
9) Uptrends that are 12 weeks or more may be ripe for a correction. The first 2 pullbacks to the 50 day are usually safe.
Intermediate term uptrends and downtrends generally last from 8 to 16 weeks with 12 weeks being the norm.
10) Shorting is a viable strategy in downtrends for experienced traders only. In general, reverse the above rules
11) Tweet Mikey @themarketshadow with questions or ideas

Monday, November 24, 2008

Please read my Profile

As you follow my Blog I am only posting what I see through my eyes. I post my trades and comment about the market the way that I see it based upon my experience. I am an agressive trader and as such many of my trades may not be appropiate for you. This game is a game of confidence. I have that confidence but that does not mean that my short term calls will be right.
If you like my ideas don't invest on my say so. The last 8 weeks have been the worst I have seen in the past 30 years. Nothing I have seen has been like this. This makes 1987 look like a cake walk.
I will continue to make comments and post trades but I am no longer a financial advisor and do not give advise. As you read my blog please keep this in mind. I know that in the end that I will be pressed on my trades and am prepared for this.
Usually the first couple of buys I put on will be in a losing position. I expect that. I try to make these first two buys small because that is my history. This last selloff I have as many as 6 buys and that is not normal for what I do. That being said I think that the lows have been seen here for now and expect to be profitiable on all of my positions within 5 months.

PS Using margin or options on what I do is a disaster. I look 5 to 6 months out and am usually going against the trend in the beginning. I most often look bad in the beginning of the trade. If I used margin or options I would be broke.
The beat goes on Mikey
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