The TRENDadvisor Guide to Breakthrough Profits outlines an integrated approach to market analysis and a sound trading strategy, known as the TRENDadvisor Diamond Methodology, this book will assist traders and investors locate low-risk/high-reward trading opportunities. This proven system will help you profit in any market environment while trading any financial instrument. Whether you’re a seasoned professional trader or newcomer to the world of investing, you must develop a defined methodology and consistently apply it to control risk, preserve capital, and harvest profits.
Introduction:
This is a book about teaching you how to approach making money in the markets. How can you make money by trading or investing in the financial markets? Our answer is by having a methodology, consistently applying it, controlling risk to preserve capital, and taking profits. What we will do for you in this book is help you to develop a methodology so you can determine whether a stock, mutual fund, commodity, or any other financial instrument is something you want to own—either as an investment or as a trade. What we are going to teach you is how to analyze any financial instrument to determine whether it is a candidate for your investment or trading dollars. There is a variety of ways to make money in the markets. You can be an investor or a trader. In our world, investors tend to have longer time horizons; traders tend to be shorter term oriented. The common objective of both is making money in the markets.
For all market participants, there are two important decisions to make—when to get in and when to get out, or when to enter and when to exit. Where the exit is relative to the entry dictates the outcome of the trade or investment—profit or loss. What you use to determine your entry and your exit is your methodology. This book is about how to create your own methodology for trading or investing in financial instruments.
Your methodology for entries and exits is not the only important decision you must make. You also have to decide how many positions or trades you will carry, at a maximum, and how much capital you will devote to any single position. You will need to decide how much risk you will take in any single position by defining where your stop loss will be placed. Your stop is the amount of capital that will be forever gone from your account when it is triggered. It is one of two possible exits from your trade or investment. The other is your profit target—the area where you will be starting to liquidate your winning investment or trade. Most traders have no set methodology for harvesting profits. We encourage a different approach of having a defined methodology that helps set a target and harvesting part of your profits when it is achieved.
You will make more decisions when you select what you will be investing or trading. Stocks? Futures? Indexes (including exchange traded funds)? Commodities? Foreign exchange? Mutual funds? What timeframe will you be using—are your trades or investments going to be held for a few days or a week? Months? Years? What are your objectives? How much capital are you going to devote to reaching them?
The answers to these various questions are all part of a trading plan—an organized approach to how you will be doing your trading or investing. Trading or investing is like any business or economically motivated endeavor in that success is much more likely to come from a defined methodology, consistently applied, with good risk control—in short, a well organized plan—than by chance or random selections. In Chapter 10 we will guide you into creating a trading or investing plan of your own. As you read this book, please keep in mind that you are learning what you need to know to create a trading plan for yourself.
Contents:
- The Ins and Outs of Trends with a Toolkit for Analysis
- The Six Phases of the advisor Diamond
- The Recovery Phase
- The Accumulation Phase
- The Bullish Phase
- The Warning Phase
- The Distribution Phase
- The Bearish Phase
- Pulling It Together
- Discipline and Money Management Come from Your Trading Plan
- A Lens on the Past
The TRENDadvisor Guide to Breakthrough Profits: A Proven System for Building Wealth in the Financial Markets By Chuck Dukas, T. Parker Gallagher pdf
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