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Monday, November 3, 2008

Dan! What Strategy Do You Use for Trading?

"Simplicity is the ultimate sophistication." - Leonardo Da Vinci

There are certain questions I receive more than others. How do I begin? What are some good books to read to get started? Where do you see the economy in 3 months?

Another question I often receive is: "What method do you use to pick your trades?"

So here it is. The ultimate, super-duper, not-so-secret method for investing and trading. I have my underlying money management strategy, and then combine the following:

1) Consider what the 'smart money' is doing.
2) Look to cyclical reversal time periods
3) Support and Resistance (Price Action + Volume)
4) Moving Averages in Multiple Time Frames
5) Seasonality

That's all. That's it. That's all I consider. On the surface, it doesn't appear that complicated. It does have a bit of an intuitive feel to it. But it's honestly not all that complicated.

And many, many, many other people trade in the same manner. I don't feel that 'revealing' how I trade? Is going to give away my 'secret' to profitable trading. Why? Because as I said, many, many people trade in this same manner. And many, many people lose money day after day. But that's because two people can take exactly identical trades, and one can make money, and the other lose. As I often say: It's about money management principles. Not the strategy.

So what strategy should you use? I discuss that in the following video.

(Video Included. If you're seeing this from Email subscription? Click on the Title Link in the Email to View the Video ...)

But please do not feel that it has to be complicated trading strategy, to work well. It doesn't. It has to 'fit you', and it has to bring results. And it has to follow money management principles.

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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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