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Over the course of these last few sections, you have learnt about several different trading instruments you can use to trade stocks
These are...
Straightforward Stock Trading
Margined Stock Trading
CFD's and Spread Betting
Call Options
Put Options
Dow Index Trading
We have also added a number of resources, and web-links to brokers, to add to your knowledge base. At this stage, it is a great idea to log in to your insight.net online service, and experiment with the different information screens... view individual stocks by clicking on the various links on the left hand side. This will allow you to familiarize yourself with the way the system works - it is in essence very simple...
Click on "Nasdaq 100 Stocks" to view these stocks with their color-coded 'trend index' position. On this screen, you will see a grid of 100 stocks, which all belong to the Nasdaq-100 family. A blue box means the trend index in the stock is UP. Red means the trend index in the stock is DOWN...
Notice also at the top of the screen, you will see whether the trend index in the MAJOR index itself [in this case, the Nasdaq 100 index] is UP or DOWN. If it is BLUE, it means the trend index in the Nasdaq-100 is UP, so look to trade individual stocks, which are in the BLUE box. If it is RED, it means the trend index in the Nasdaq-100 is DOWN, so look to trade individual stocks, which are in the RED box.
When you expect a stock to move UP, you could trade straightforward stocks, or margined stocks, or spread-bets/CFD's, or 'call' options. This is up to you - to find which instrument you feel most at ease with [start with straightforward or margined stocks as this is the easiest instrument to work with].
When you expect a stock to move DOWN, you can use 'short' stock trading instruments, such as 'shorting' stocks, CFD's, spread-bets, or 'put' options.
You can also view other screens: Click on "Dow 30 Stocks" to view these stocks. Click on the "FTSE 100 Stocks" screen to view the top 100 UK stocks. And so on.
Also, if you want to view the lesser popular stocks [ie., stocks which are not in the Nasdaq 100, or the Dow Jones, or the FTSE 100], then you may click on "Stock-Charts" from the left hand side menu, in order to view charts [including the trend index indicator] for any stock you wish. We cover over 16,000 stocks and indexes worldwide. You may even go directly to any major index screen from the left hand side menu, eg., Dow Jones Index, Singapore Straits Index, Japanese Nikkei Index, etc.
At the top of any screen, you will notice a useful "Learn-It" button...
When you click on this button, a screen opens up, which provides a comprehensive single-page of step-by-step information covering how that particular screen works, and how to use this information to profit from these opportunities.
Keeping Things Simple...
Throughout this Learn
Center, we have aimed to keep the learning process as simple and to the
point as possible. It is not necessary to enter into in-depth
discussions and complex strategies in order to demonstrate what is
important about trading…
The basic premise of trading is to buy and sell, and produce a profit.
It makes little difference whether the amount of profit is large or
small. A profit is a profit. What is more important is consistency,
and being on the right side of the market.
On some trades, profitability will be extremely high, especially in runaway bull markets. On other trades, the profits will be more limited...
However, it is important to observe and appreciate that ‘consistency’ of profit far outweighs the amount of money made on any particular trade. So, the goal remains always a basic tenet – to buy low, sell higher and achieve a profit on a consistent basis, whereby the majority of your trades will be winners. Also remember, crucial to the complete plan of action is to observe on every trade, the stop-loss and re-entry rules - these have been developed to ensure you contain any losses on a trade to a bare minimum, while keeping the opportunity to capture the major swings open.
We started the manual with a brief intro on the stock market, what it is, what drives traders, and the advent of mathematical/technical analysis to the markets...
Charting is the means by which the movements in the price of a stock over a period of time can be viewed. The candlestick charting format is utilized by all our charts, which is the most popularly used format for the majority of career and professional traders...
On the screen, you can adjust your charts so you can view it in different formats, for example you can change the number of bars you wish to view [30 bars, 60 bars, 120 bars etc.]. You may even view simple high-low bars instead of candlesticks if you so wish. Play with these settings at the bottom of any chart on your screen.
The trend index indicator is the result of a continual analysis, dedication, and testing of a systematic approach to trading, which measures the 'mood' of the market. The trend of the general market [major indexes] as well as individual stocks can be gauged using this tool, and provides the backbone for our trading/decision making...
At the core of this technology is a powerful 4-layer equation which combines on balance volume, accumulation & distribution components, money-flow and relative volatility measurements. The formula provides the opportunity to 'align' both the trend in the stock itself and the trend in the major index, to provide opportunities when a stock enjoys the 'path of least resistance' to move in a particular direction.
The major challenge in developing the Trend Index was to present a complex strategy, which involves excessive levels of day-to-day number-crunching [which thankfully, ever powerful PC’s and server based software is completely capable of performing with dependable efficiency], into a simple, easy-to-use format which is then immediately accessible by any person who wishes to utilize it. Effortlessly, you can determine a stocks underlying trend, aligned with the trend of the major market...
You enter positions based on this core analysis, while at the same time, insure yourself against any excessive risk/loss by way of the initial stop-loss setup we showed you in section 12. The stop-loss is there to protect you against adverse risk, but at the same time, it should allow you the ability to re-enter should the trend maintain strength [orange], thus ensuring that you will never miss out on the major swings which is where significant profits are captured.
In a nutshell...
Our Complete Trading System Step-by-Step - If you have read this manual
from start to finish the following sequences will make perfect sense. If
not, you should study the manual in detail again. The whole process is
essentially simple, but very efficient...
Whenever you have...
Blue Bar At The Top [Main Index Trend UP]
PLUS
Gray-Gray-Orange Sequence In The Stock
Then...
BUY Stock Pre-Close Or At The Next Open [Note the entry price].
AND...
Place A Stop-Loss At The Day’s LOW minus ONE CENT
If Stop-Loss Is Hit, Then Exit
BUT...
Re-Enter The Stock Again
IF Trend Index In The Stock Stays Orange
AND
The Stock Climbs Back To Original BUY Point
OTHERWISE...
If Stock Trend Index Is Gray, Then Leave It
And Look For Fresh New Opportunities.
Other disciplines we follow in our trades [not rules, but a matter of choice]...
Trade One Stock At A Time, Unless Capital Exceeds $5,000.
If Capital Exceeds $5,000...
Then Trade 2-3 Stocks example: $10k = 2 stocks, $15k = 3 stocks etc.
No more than $5,000 placed into a single stock.
Stick To Fixed Stop-Loss Rules To Ensure Minimal Risk,
And Maximum Swing Opportunity Through The Re-Entry System
You may trade any instrument you wish, eg., straightforward stocks, margined stocks, CFD's, spread bets [if they are available in your country], options, etc. This is entirely up to you - key rule is to start small with straight/margined stocks, then progress into learning about advanced instruments such as options/dow emini's, etc.
Striving for perfection...
It makes no difference whether you are a beginner learning about how to trade stocks more intelligently, or a seasoned professional looking to improve his/her already existing systems. The trend index indicator is a powerful trading 'tool' which is based on some very complex math, but is beautifully simple to use and apply. This is what you will see at the heart of any successful software organization - to deliver ever simpler ways of doing things, behind which there is an unseen complexity of minds.
We have members from many walks of life... We have full-time traders with million dollar portfolios who simply want a way to find the right stocks to trade, for quick, short term gains. We also have traders who use both simple and advanced 'options' strategies to profit from the trend index triggers.
We even have traders who focus entirely on four or five stocks and trade them again and again, using 'margined' stocks, capturing the positive swings in those stocks repeatedly. This is all perfectly fine.
The point is, it really makes no difference which market or instrument you personally choose to trade. Find an instrument you personally feel most comfortable with. Start with straightforward [or margined] stocks, try out options slowly. If you are in the UK, test the water with spread-betting. Find out first hand what you feel most comfortable and at ease with...
What is most important is to make sure you are on the right side of the market, and capture those critical swings that make money. Remember, trading is trading pure and simple. If it makes money consistently [and that is an important word], then you should harness the discipline, and go with that strategy!
It is important to learn about trading, in unison with paper trading [trading with imaginary money, keeping notes etc], to gain practice and iron out any points of uncertainty. If you are unclear about something, this is a great way to resolve any gray areas/issues. This is a critical stage, essential to developing confidence.
This online trading manual will be continually improved wherever possible. You will find interim add-ons and updates, from time to time, which are all aimed at presenting an easy to use, jargon-free body of trading information and knowledge.
The screen adopts an equally simple design and structure, making it easy-to-use. Behind the screen is a dedicated team of professional programmers, system developers, ears that listen to traders feedback and inspired idea development. The continual improvement of the product will not cease as long as new ideas and feedback continues, as it has become a passion to produce a simple-to-use, powerful interface, dedicated to the online stock/options trader.
In closing we will leave you with this thought..
Do not try to 'predict' which way the stock market will move next. Instead, allow the market itself to determine your actions. All stock prices represent a 'perception' of value - what the crowd/market 'think' a stock is worth. All perception of value is based on 'moods' which swing like a pendulum between positive and negative. To align yourself into these rhythmic cycles, is the same as allowing the market itself to provide clues, and determine your actions.
In sincere appreciation of your patronage to our service, we remain dedicated to continue developing ever powerful [but always simple-to-use] functionality, an ever easier-to-read Learn Center, and everything to do with improving your trading wherever possible. This is our zeal, and commitment to you, our valued members.
This is the beginning…
Happy Trading!
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