The buy and sell signals are identified by the blue circles. How did I identify these areas as turning points? It is much easier then you might think.
This trading system combines buy and hold, cash flow and a trend following timing model.
This strategy I’ve dubbed, The Money Flow, was developed after years of research. It isn’t perfect but when combined with a high yield product like CEFL/YYY it does catch the meat of the trends while paying a handsome dividend (coupon payment) for playing.
The Money Flow Trading System seeks to be long a full position when the market is trending upward and in half position when the trend turns down.
Key point: never sell completely out of the position.
There is no short selling involved. I am never wrong on a trade. If I sell half of my position because of a sell signal I didn’t lose any money, I just made less than if I owned a full position.
CEFL pays a large dividend currently compounding at 20% and best of all it pays monthly. I know crazy, sounds crazy but it’s true.
$1,000 at risk – $14.40 monthly coupon payment.
$10,000 at risk – $144 monthly coupon payment.
$100,000 at risk – $1,447 monthly coupon payment.
I seek to capture that monthly income by holding a half position at all times. Those monthly dividend payments are not reinvested until I receive the next “buy” signal at which time I add the full position plus any previously collected dividends.
2015 – 15% return
2016 – 51% return
The idea is to combine both buy and hold, timing and dividend income. I know sounds crazy…but a guy can dream can’t he!
I seek to minimize trade cost by trading with the trend. As few trades as possible but always on the side of the trend. This is determined first by price structure, then confirmed with indicators
The Money Flow trading system – My Free Trading Book….it’s free and still a work in progress…enjoy.
Notice the blue circles
My basic trade plan –
1. Trade with the trend
2. Manage Risk
3. Collect income in form of coupon payment or dividend
4. Compound the results.
Replace predicting with reacting – I have no clue what the market is going to do so I watch, wait, respond based price movement using a simple set of rules.