TrendTrader | Trend Trading

Trend Trading System – GMMA – EMA

Getting involved in trend trading requires that you have discipline. You never want to trend trade–or in fact, do any kind of investing–on emotions. You don’t want to be a pawn of greed and fear like the masses of traders are. So, the way to take emotions out of the picture is to have a system in place that you know you will use before you begin trading.

One of the most often used trend trading systems out there is the GMMA, or the Guppy Multiple Moving Average. With the GMMA, the trader puts together two different groups of moving averages that have different time periods.

One of these groups is quite often used by traders with a short-term horizon. The number of days in their time horizon is, most of the time, one of the following: three, five, eight, 10, 12, or 15. For those who are involved with long-term investing as trend traders, they use time frames that consist of 30, 35, 40, 45, 50, or 60 days.

Trend Trading – Profit From Trends

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Trend trading is an investment strategy that attempts to leverage momentum for financial gain. If a stock is trending upward, the trader enters into a long position on it, whereas if it’s trending downward the trader enters into a short position.

By “trend” we mean that the stock is moving in a particular direction without much back-and-forth (that is, up-and-down) movement. A trend trader is assuming that the stock in question is going to continue in its particular direction for a significant enough amount of time to make it worthwhile to invest in that momentum and profit from it.

What that significant time frame is all depends on the trader in question. In fact, that time frame can be as short as, say, 15 minutes or as long as a few months. But however long his chosen time horizon is, the trend trader will remain in the position he opened until he feels that the stock has reached its resistance and is about to reverse its trending. He then closes his position and takes profits.

Low Risk Day Trading Strategies

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I’ll be honest, I don’t like gambling. If I go to Vegas, I’d rather just skip the trip to the casino and go see shows or enjoy the great food.

That doesn’t mean I don’t like risk. In the real world, I’m an entrepreneur and taking risks comes with the territory. It doesn’t bother me.

However, I feel like there’s a big difference between me and people gambling in Vegas. I’m able to stack the odds in my favor. In Vegas, you close your eyes and hope lady fate is feeling generous that day. To me that just seems stupid. I’d rather not take risks where the result is completely up to chance.

So what does this have to do with day trading? Everything. Did you know that only 5% of people doing day trading ever make any money? Most people lose money and some get completely wiped out when they try it. Why? They’re not stacking the odds in their favor and they’re taking big unnecessary risks.

Low Risk Day Trading Strategies

So if you’d like to join the land of the 5%, let me give you a few low risk day trading strategies you can use to make excellent returns (about 12.8% per month – that’ll more than quadruple your money in a year)
[Read more...]

Filed Under: Low Risk Trading, Trend Trading Tagged With: day trading, intraday trends, low risk day trading, trade with the trend, Trend Trading

ETF Investing

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I wanted to make a quick post to cover ETF investing and give some of the main advantages of Exchange Traded Funds and why they’re starting to become a preferred investing model over the classic mutual fund.

They do have a lot in common with mutual funds, so let’s start there.

Just like a mutual fund, ETFs are a diversified investment. However, they’re much easier to sell and there are fewer restrictions on them.

Exchange Traded Funds are still relatively new to the investing scene and there aren’t a lot of investors or financial managers who have the expertise necessary to invest in them so that’s probably why you haven’t heard as much about them as other investing models.

There are 6 main advantages to ETF Investing:

[Read more...]

Filed Under: ETF Trading

ETF Trading – Benefits Of Exchange Traded Funds

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ETF Trading

Exchange Traded Funds (ETF) have recently become a great and frequently preferred alternative to the mutual fund.

What Is An Exchange Traded Fund?

ETFs are securities that are made up of many different stocks. In that way, it’s quite similar to a mutual fund. However, with and ETF, the stocks all have something in common (we’ll get to why that’s such a huge advantage in a bit). It may be based on an index or an industry sector. Those are the most common. Sometimes, a fund may be based on the country the companies are tied to, but this isn’t common.

Like mutual funds, ETFs are diversified investments, so your risk of loss is roughly the same as it would be with mutual funds. However, they hold several advantages over mutual funds.

Top 4 Benefits Of Exchange Traded Funds

1) Trending – Due to the fact that the stocks all have something in common, they tend to trend more predictably that regular stocks. That means whether the trend goes up or down, you can make significant returns with very little effort (Learn how to make money from ETF Trend Trading). This is the biggest advantage and the reason why you should consider adding ETFs to your portfolio.

2) Bought And Sold Like Stocks – And ETF is bought and sold just like a regular stock so stop-loss and limit orders are available.

3) Lower Fees – Another selling point of ETFs is their low fees, some as low as .2%. Since the companies all have something in common, the amount spent on market analysis is significantly reduced.

4) Transparency – While a mutual fund only reports their holdings twice a year, an ETF can be viewed in real time any time you want.

ETF Trading

Exchange Traded Funds (ETF) have been gaining attention recently and are quickly becoming the preferred alternative to mutual funds.

What Is An Exchange Traded Fund?

Like mutual funds, ETFs are diversified investments, so your risk of loss is roughly the same as it would be with mutual funds. However, they hold several advantages over mutual funds.

Top 4 Benefits Of Exchange Traded Funds [Read more...]

Filed Under: ETF Trading Tagged With: etf, ETF Trading, etfs, exchange traded funds, mutual funds, Trend Trading, trending

Low Risk Trading And Investing Tips

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Low Risk Trading And Investing Tips

When it comes to trading strategies, it seems like just about everybody has their own little scheme for getting massive returns.

Heck, just do a search online and you’ll find people claiming to have the secret to getting 500%, 600%, even 1000% yearly returns.

All you need to do is give them a bunch of money and they’ll reveal their secrets to you.

If you dismiss the outright scams, you’ll find that the ones that promise those kind of returns do so at dramatic risk to your entire portfolio. Sometimes your exposure can be 10 or even 20% of you’re entire portfolio.

If you have a few losses in a row (and every system will at some point no matter how good it is), you could find yourself wiped out.

Let me give you an example of why you really need to stick to low risk investing strategies and keep your exposure at a minimum.

Let’s say you have $30,000 in your account and you have a few bad trades and your account is reduced to $18,000.

You’ve just lost 40% of your account. What percentage of a return do you need now to get back to even?

The typical answer is, “Well, I lost 40%, I have to make back 40%.”

Wrong!

Since you lost $12,000, you now have a lower base of money to work with so undoing that $12,000 loss requires you to get a 66.6% percent return on your money just to get back to even.

Remember, you are going to have losing trades and no matter how good your system is, there will be times where you will have multiple losers in a row.

Here’s a breakdown so you can see just how much you’ll need to get back when you lose a percentage of your account.

Drawdown % To Get Back To Even

10% 11.1%

20% 25%

30% 42.8%

40% 66.6%

50% 100%

60% 150%

70% 233.3%

80% 400%

90% 900%

Are you starting to see why professional money managers are only willing to risk at most 2% per trade and more often it’s .5% or 1%?

Even if you have 10 consecutive bad trades, if you’re risking 1-2% of your account, you’ll be down about 20%. A good trade or two can make that up. Beyond that, however, and you’re entering risky territory.

As far as low risk trading goes, there is one system that I recommend above all others. It takes only 5-10 minutes per day to do after the markets have closed, and averages a 6.43% return each month. (With monthly compounding, that’s over 100% a year.)

It’s called ETF Trend Trading, and it’s really an amazing system and definitely a low risk system.

Here’s an interesting piece of trivia. Warren Buffet became the world’s richest man by averaging a compounded annual return of 22%.

Low Risk Trading

When it comes to trading strategies, it seems like just about everybody has their own little scheme for getting massive returns.

Heck, just do a search online and you’ll find people claiming to have the secret to getting 500%, 600%, even 1000% yearly returns.

All you need to do is give them a bunch of money and they’ll reveal their secrets to you.

If you have a few losses in a row (and every system will at some point no matter how good it is), you could find yourself wiped out.

Let me give you an example of why you really need to stick to low risk investing strategies and keep your exposure at a minimum. [Read more...]

Filed Under: Featured, Low Risk Trading Tagged With: drawdown, investing losses, low risk investing, Low Risk Trading, risk, warren buffett

Trend Trading System – GMMA – EMA

Trend Trading – Profit From Trends

Low Risk Day Trading Strategies

ETF Investing

Low Risk Trading And Investing Tips

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