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Never Ever Follow The Villager Into Equities

  
  Education
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It’s a moot point: Is the Buffalo leading the Villager or is the Villager Following The Buffalo? The Chinese are contemplating the same.

Nobody has seen the village chief.

Just months ago, his courtyard home at the edge of the orchard was a makeshift trading floor where local farmers gathered to share tips and track the Shanghai Composite. Now, the gates are closed, a security camera stands watch, and nobody wants to talk about the stock-trading local party secretary.

“Out for the whole day,” ventured a neighbor.

“Who?” said another.

“Maybe he flew away in a plane,” joked a third. The country was gripped by stock fever, a frenzy of borrowing and buying that saw Chinese markets soar to historic heights, drawing in tens of millions of first-time investors, including dozens of people in this northern Chinese village.

The rally was bolstered by rah-rah editorials in the state-controlled press. Invoking President Xi Jinping’s vision for a powerful and prosperous China, the People’s Daily called rising stock prices “carriers of the China dream.” When the benchmark index hit 4000 points, an editorial in the same party flagship promised it was “just the beginning” of the bull run.

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When should traders be in or out of the market?

  
  Education
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There are times when traders should NOT be in the market. There are other times when the market is rocking and traders should get aggressive. How can you tell the difference? Here are 5 helpful tips.

1) Accumulation and Distribution Days: When should traders go to cash? Follow the big boys! The big institutions control the market, so pay attention to their actions by tracking accumulation anddistribution days. When institutional selling builds up over a short period of time (2-4 weeks) AND leading stocks start to break down, that is a great sign to start raising cash. Why? Because 4 out of 5 stocks move in the general direction of the market. I don’t care how good the company is, when the market’s in a downtrend, you don’t want to fight it.

2) Uptrends and Downtrends: Don’t get caught up with the terms Bull and Bear market. Just recognize if we are in an uptrend or a downtrend. For example, use the 50-day moving average on the NASDAQ Composite as a general indicator to be in or out of the market. Above the line usually means we’re in an uptrend and it’s a green light to be in stocks…below the line, downtrend and red light.

3) Scale In: When conditions start to improve, SLOWLY scale back in. There’s no reason to rush. Take a few positions and test the waters. If the rally is for real, there will be PLENTY OF TIME to make money. If you are wrong, at least you can get out quick with minimal damage and protect your portfolio. Think Defense First!

4) Buy the Strongest Earnings & Sales Growth: When markets are in a confirmed uptrend, what stocks should you buy? Be in the best! Don’t settle for low rate stocks. Look for companies that have strong earnings and sales growth. Why be in dead-money stocks with little growth potential? We’re in this to make money, right? So be in stocks that have a higher probability of moving up!

5) Fundamentals AND Technicals: Why does it only have to be one or the other? Why not USE BOTH! We want as many factors as possible in our favor when trading the market. Therefore, start with strong fundamental companies AND combine the proper technical timing to identify ideal entry points to effect your best risk vs reward trades. (more…)

Tells

  
  Education
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tellTells: Look for them, and you will find them. Poker players and stock markets have tells — giveaway moves that are very revealing. Learn to recognize them. History is your textbook. (For example, improving corporate financials usually presage a rally; conversely, deteriorating financials usually augur poor market performance)

“Intraday – Instant Gains…Position Calls – Bumper Gains”

  
Analysis, Education
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ASR-MINTMONEYSo it happened Yesterday as well.  Once NF crossed our Laxman Rekha of 5077, it went to 5139 – our level mentioned in the morning was 5140 !!!! 

Now Look at Instant Gains in Intra-day:  I wrote yesterday morning that above 103  JINDAL COTEX  will shoot upto 109, 111 and could hit circuit too.  It’s a tribute to Technicals, it actually skyrocketed to 120-70. 

 See the precision in day trade.  TULIP went upto 962.50  –  our level was 963, it would have taken off brilliantly only had it crossed.

 Now see the Bumper gains in Position Calls.  I am writing since 1 week about bullishness in AIRLINE Stocks.  All had a rally.  My best pick was KINGFISHER Airlines: Recommended @ Rs.52 on 26th Nov / Thu to buy with a target of 74+ and even 100 too.  The lowest that it can slide to before the rallying was 49.  Mesmerisingly it touched a low of 49-50 in last weeks Dubai debacle only to rally upto 57-10 today.  So far in Just  4 sessions a gain of Rs.30000+ per each F&O Lot of  4250.  Anything else is called Bumper Gain ???

-In Last two sessions enjoyed rally  in DLF ,Unitech ,HDIL or not ?

 Yesterday  on website we have mentioned only 2 stocks.  But to our subscribers:

Manali Petro upperfreeze, CONCOR rallied from 1185 to 1220, Rel Media from 265 to 280 and many others.

 Our Levels pour money in your lap before you could even count.

Richard Rhodes' Trading Rules

  
  Education
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If I’ve learned anything in my decades of trading, I’ve learned that the simple methods work best. Those who need to rely upon complex stochastics, linear weighted moving averages, smoothing techniques, Fibonacci numbers etc., usually find that they have so many things rolling around in their heads that they cannot make a rational decision. One technique says buy; another says sell. Another says sit tight while another says add to the trade. It sounds like a cliche, but simple methods work best.

  1. The first and most important rule is – in bull markets, one is supposed to be long. This may sound obvious, but how many of us have sold the first rally in every bull market, saying that the market has moved too far, too fast. I have before, and I suspect I’ll do it again at some point in the future. Thus, we’ve not enjoyed the profits that should have accrued to us for our initial bullish outlook, but have actually lost money while being short. In a bull market, one can only be long or on the sidelines. Remember, not having a position is a position.
  2. Buy that which is showing strength – sell that which is showing weakness. The public continues to buy when prices have fallen. The professional buys because prices have rallied. This difference may not sound logical, but buying strength works. The rule of survival is not to “buy low, sell high”, but to “buy higher and sell higher”. Furthermore, when comparing various stocks within a group, buy only the strongest and sell the weakest.
  3. When putting on a trade, enter it as if it has the potential to be the biggest trade of the year. Don’t enter a trade until it has been well thought out, a campaign has been devised for adding to the trade, and contingency plans set for exiting the trade.
  4. On minor corrections against the major trend, add to trades. In bull markets, add to the trade on minor corrections back into support levels. In bear markets, add on corrections into resistance. Use the 33-50% corrections level of the previous movement or the proper moving average as a first point in which to add.
  5. Be patient. If a trade is missed, wait for a correction to occur before putting the trade on. (more…)
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