Trading 101

It all starts with charts,

Stockcharts.com – You don’t need to instal any fancy software or proprietary trading system. Stockcharts will work just fine for home gamers. For about $1 a day you can upgrade to real time account.

Trading is skill combined with art. There is no right way to trade. You do need to pick a method of trading and stick to it over a long period of time. As your skill grows you can expand your trading.

I am of the opinion that a lot of trading styles are more art then skill and more religion then science. 

Basic cardinal rule: 

The 20 day moving avegerage gives u a visual picture of the last month of price. 

If price is printing above the 20 day simple moving average you should be looking to trade long and if price is printing below the 20’day simple moving average you should be looking to trade short, downsizing or at least locking in any potiental profit. 

The chart below is the SPY with a 20 day simple moving average plotted on a daily chart. When price is above the moving average notice prices trend up. 


Near end of November we see price move above the moving average and trend up till march where starts to dip below the moving average and the uptrend comes under pressure.

There are many great trading books to choose from…to name a few must reads are…

Trading for a Living –

This is a trading/investing strategy I have been using (still refining)  to participate in the high risk world of leveraged ETN products by UBS Etracs ( http://etracs.ubs.com/ ) Primary focus is the ETN CEFL.

YYY – is non leveraged ETF option for those less Risk adverse.

CEFL – Monthly Pay 2x Leveraged Closed-End Fund is an exchange-traded note linked to the monthly compounded 2x leveraged performance of the ISE High Income™ Index, reduced by the Accrued Fees. (mouth full I know!) These aren’t your grandma mutual funds…

The System – (Also see The Money Flow Trading System – Free Trading Book)

* Combing Timing / Buy and Hold / and High Dividend Income Potential.

* Low transaction cost – few trades – 1-2 a month on average.

* Minimize downside risk by taking half position when CEFL trends downward and be fully invested when CEFL is in an uptrend. I define trend in

* High Monthly Income Potential in the form of  monthly coupon.

While I focus primarily on CEFL & YYY here The Money Flow Trading System can be used to trade stocks, ETF’s, or commodities.
If you would like to contact me:

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