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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, August 23, 2010

Trading Signals

I will be listing individual stocks and ETF's under the following format.

Stock MPI(Mikey Power Index)
RSI (Relative Strength)
MACD (Moving Ave/Convergence Divergence)
MACD Cross Negative or Positive
MACD Divergence

An uptrend will have:
An MPI greater than 55
An RSI greater than 60
An MACD greater than 0
A Positive MACD Cross
And no divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning

A Downtrend will have:

An MPI Less than 45
An RSI Less than 40
An MACD Less than 0
A negative MACD cross (Date of Cross)
No divergences ( I will use the term In Gear to indicate this)
A divergence is an early trend change warning


AAPL 247.82.MPI 40, RSI 39, MACD -229(new low), Negative cross(8/11), In Gear

Mikey
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