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Tuesday, April 8, 2008

Charting 101 (Series): How to Use Moving Averages When Trading and DTE Energy Purchase (VIDEO)

Challenge Accounts:

Investing Account Balance: $241.92
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $22.10

Personal Trading Thoughts: Cash. No positions. We might be seeing a small capitulation rally in this bear market right now, now that the 'talking heads' have admitted that we are in recession. They are like your best 'capitulation' guage. I have no swing positions as I have a vacation coming up; and I don't want to get caught in the middle of a swing trade, before I leave. Therefore, no trades this month.

Personal Investing Thoughts: Cash is my largest position. I still hold all of my long term stocks. My bearish outlook hasn't gone away. But there is another possibility. We could 'channel' for a while. In other words, a short-term bottom might be developing, as the market goes sideways for a while. I'm still prepared for a 35% drawdown from the highs. But at the same time, I have an itch to expand my personal investment portfolios. This morning, I bought, in my NON-CHALLENGE ACCOUNTS, DTE for a long term DRIP play at $40.21. Here's the certification of that purchase:

As I mentioned the other day. Just a nibble to scratch an itch. I maintain that if the recession is a short one (1 year) then the bottom could come any time as the market will be the first one out of the recession. If the recession is longer (2 years) then we haven't seen the bottom yet. I leave the predicting to God.

Ok. In the previous entries, we discussed the concepts of support, and resistance. How moving averages are constructed. That trends tend to continue, until proven otherwise, and that they come in long-term, short-term, and medium term trends.

Remember, when two different trends collide, the larger trend tends to win the battle.

In this video, we start bringing it all together.

In the future, I will be discussing Volume, Chart Patterns, and Indicators.

* * *

Investing Account Balance: $241.92
Stock / Futures Trading Balance: $734.39
Online Savings Balance: $22.10

Total Trades and Investments: 3
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $82.56
Average Loss: $82.56
Accuracy Rate: 33%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.02

Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research and tolerance for risk.

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