You can find all the articles I have written about the stock market at Ezine Articles and read my profile here:
http://ezinearticles.com/?expert=Gregg_Killpack
thanks,
Gregg Killpack
President
http://www.MarketTimingUniversity.com
This blog contains the articles posted for Trader Gregg at www.ezinearticles.com -- only you get to see the charts here. For Free Stock Picks for Investors, go to: www.tradergstocks.blogspot.com
Wednesday, June 26, 2013
Wednesday, November 28, 2012
Market Timing University
Hi Everyone,
I am in the process of setting up a new website to teach people the principles of investing for bigger profits. I have a basic site up now, but I will have a much better web site in a few months.
See my YouTube videos here: http://www.youtube.com/watch?v=9cMyEaGUgOc
See my website: http://www.MarketTimingUniversity.com
See you there!
I am in the process of setting up a new website to teach people the principles of investing for bigger profits. I have a basic site up now, but I will have a much better web site in a few months.
See my YouTube videos here: http://www.youtube.com/watch?v=9cMyEaGUgOc
See my website: http://www.MarketTimingUniversity.com
See you there!
Tuesday, August 31, 2010
The 3 Best Times to Buy for Short-Term Traders
Traders aren’t concerned about fundamental analysis or economic indicators because in the short-term, all stocks fluctuate up and down. They are more likely to profit from technical indicators that show what the stock is doing now. Investors, on the other hand, aren’t concerned with the short term ups and downs of a stock; they want to catch the broader move in stock prices over time.
In terms of technical analysis, there are three spots on stock charts that are the best times to buy. This is critical to know for short-term swing traders to limit risk and increase reward -- traders want to calculate what the risk and reward is going to be before entering the trade.
Why is that important? It’s important because you don’t know if the trade will work out. If you don't set up your trades properly before the trade then you aren't trading with an edge -- you aren't putting the odds in your favor. For example, if you profit from 50% of your trades risking $1000 per trade, you aren’t going to make any money! For every $1000 in profit, you will lose the same amount and end up treading water (before commissions). Since many swing traders only make money on 40-50% of their trades, setting up your trades properly must be done if you expect to succeed at trading.
There are two things you can do to trade with an edge:
1) Set up the trade so that your reward is better than 1:1 – instead of risking $1000 to make $1000, you make $2000-$5000 for every $1000 risked. That is what I will show you how to do in this article.
2) You research for setups that profit more than 50% of the time. You can set up an account with TradeStation or another broker that offers research tools to help you do this, or just do it yourself using free online services like Yahoo finance or Google finance. There are books that teach how to do this and I teach it in my private counseling sessions (see my website for more details...).
As a short-term or swing trader, you only want to enter a trade when your reward is at least 2.5:1 and the higher the better (I've seen it sometimes more than 10:1). Know your entry point, your stop loss point, and your target profit point before entering the trade. Then you can calculate risk vs. reward.
Now that you know this, here are the safest places technically to buy a stock:
1) Breakouts – a stock going sideways starts going up, especially on high volume. The sooner you catch the big up day on volume the better. These moves tend to keep going up for days or weeks to come. (You know you’re wrong when the first strong day doesn’t follow through within a week or if it goes below the low of the day it went up on high volume. That point is usually much closer than the profit target, making it a low-risk, high-reward setup.)
2) Pullbacks – a pullback is a stock in an uptrend, but goes back down for a short period. For example, ABC stock went up from $50 to $70 in the past three months and dropped to $62 over the past two weeks. In the past three days it went sideways in a tight range of $.50 and today it went up $1. This is an excellent buy spot to buy because we have reason to believe the longer-term uptrend will continue, that the stock will go back up to previous highs, and the stock appears to be starting that uptrend now. You will risk not more than $1.50-2 to make $7-8
3) Note that #1 above is for a stock that is starting to go up and #2 above is for a stock that is going up (stocks going up are generally the kind of stocks we want to buy….). This is for a stock that is going sideways. Over the past month we notice ABC stock stopped going up when it hit $100 (resistance) and stopped going down when it hit $80 (support). The stock again is headed for $80 when we notice it hits $79.72 and has held above that in the last four trading days. This makes an excellent time to buy because you can risk $1.50 to make $10, a reward: risk ratio of more than 6 to 1. If you made this trade five times and were right once, the outcome would be: 4 losses x $1.50 = $6 Loss……. and 1 win x $10 = $10 for a total profit of $10 – $6 = $4. That is how to be wrong 80% of the time and still make money.
Stick to your stops! Put in your stop loss order immediately after the purchase. If you get stopped out, take a step back and take another look at the stock and what's going on.
If you flip these examples upside down, you also have the three best times to short a stock.
Traders who want to be consistently profitable in their trading need to understand these types of concepts that I teach. Go to my website for more information:
http://www.tradergstocks.blogspot.com/
Many profitable returns,
Trader Gregg
In terms of technical analysis, there are three spots on stock charts that are the best times to buy. This is critical to know for short-term swing traders to limit risk and increase reward -- traders want to calculate what the risk and reward is going to be before entering the trade.
Why is that important? It’s important because you don’t know if the trade will work out. If you don't set up your trades properly before the trade then you aren't trading with an edge -- you aren't putting the odds in your favor. For example, if you profit from 50% of your trades risking $1000 per trade, you aren’t going to make any money! For every $1000 in profit, you will lose the same amount and end up treading water (before commissions). Since many swing traders only make money on 40-50% of their trades, setting up your trades properly must be done if you expect to succeed at trading.
There are two things you can do to trade with an edge:
1) Set up the trade so that your reward is better than 1:1 – instead of risking $1000 to make $1000, you make $2000-$5000 for every $1000 risked. That is what I will show you how to do in this article.
2) You research for setups that profit more than 50% of the time. You can set up an account with TradeStation or another broker that offers research tools to help you do this, or just do it yourself using free online services like Yahoo finance or Google finance. There are books that teach how to do this and I teach it in my private counseling sessions (see my website for more details...).
As a short-term or swing trader, you only want to enter a trade when your reward is at least 2.5:1 and the higher the better (I've seen it sometimes more than 10:1). Know your entry point, your stop loss point, and your target profit point before entering the trade. Then you can calculate risk vs. reward.
Now that you know this, here are the safest places technically to buy a stock:
1) Breakouts – a stock going sideways starts going up, especially on high volume. The sooner you catch the big up day on volume the better. These moves tend to keep going up for days or weeks to come. (You know you’re wrong when the first strong day doesn’t follow through within a week or if it goes below the low of the day it went up on high volume. That point is usually much closer than the profit target, making it a low-risk, high-reward setup.)
2) Pullbacks – a pullback is a stock in an uptrend, but goes back down for a short period. For example, ABC stock went up from $50 to $70 in the past three months and dropped to $62 over the past two weeks. In the past three days it went sideways in a tight range of $.50 and today it went up $1. This is an excellent buy spot to buy because we have reason to believe the longer-term uptrend will continue, that the stock will go back up to previous highs, and the stock appears to be starting that uptrend now. You will risk not more than $1.50-2 to make $7-8
3) Note that #1 above is for a stock that is starting to go up and #2 above is for a stock that is going up (stocks going up are generally the kind of stocks we want to buy….). This is for a stock that is going sideways. Over the past month we notice ABC stock stopped going up when it hit $100 (resistance) and stopped going down when it hit $80 (support). The stock again is headed for $80 when we notice it hits $79.72 and has held above that in the last four trading days. This makes an excellent time to buy because you can risk $1.50 to make $10, a reward: risk ratio of more than 6 to 1. If you made this trade five times and were right once, the outcome would be: 4 losses x $1.50 = $6 Loss……. and 1 win x $10 = $10 for a total profit of $10 – $6 = $4. That is how to be wrong 80% of the time and still make money.
Stick to your stops! Put in your stop loss order immediately after the purchase. If you get stopped out, take a step back and take another look at the stock and what's going on.
If you flip these examples upside down, you also have the three best times to short a stock.
Traders who want to be consistently profitable in their trading need to understand these types of concepts that I teach. Go to my website for more information:
http://www.tradergstocks.blogspot.com/
Many profitable returns,
Trader Gregg
Monday, August 23, 2010
Understanding Economic Indicators
Economic indicators are confusing. On the same day, some of them are positive and show a growing economy while others are negative and reflect a declining economy. How can anyone know where the economy is headed?
The key to understanding economic indicators is whether the indicator is leading, coincident, or lagging.
All Indicators are Not Created Equal
Economic indicators are like driving in your car. Leading indicators are like looking through the front windshield to see where you’re going, Coincident indicators are like looking out the side mirror to show you where you are, and Lagging indicators are like looking in the rearview mirror to see where you have been. The problem comes when you look at all three images and don’t know which is forward, sideways, or backwards. Trying to drive with the views garbled would be difficult indeed.
As investors, leading indicators are the most important to us because the stock market is also a leading indicator. We want to find the earliest leading indicators that we can and notice the co-incident indicators to confirm what the leading indicators are telling us. That will help us invest at the right time – when stocks are going up or about to go up. Stock prices follow corporate profits, so we want to find economic indicators that rise before corporate profits.
Leading indicators include Hourly Earnings, Consumer Spending, and the Consumer Price Index or CPI.
Average Hourly Wages show the wages that employees earn. Many employees will spend all they make, so as this number goes up there is more money being spent and the economy grows.
Consumer Spending, known officially as Personal Consumption Expenditures or PCE, is similar to hourly wages. As consumers spend more, the economy improves soon after. Corporate profits tend to follow average hourly wages and consumer spending up and down.
The Consumer Price Index or CPI is a broad measure of inflation. It breaks down inflation into many different categories that give a solid understanding of where inflation is coming from – if it is across the board or just a temporary reading in one sector.
This leading indicator is a huge danger signal to warn against coming bear markets. When inflation gets too high, the Federal Reserve raises interest rates. All companies with debt are forced to pay higher rates, cutting directly into profits, not to mention consumers. When the Fed continues to raise rates, a bear market is sure to follow.
The best coincident indicator to watch is the GDP or Gross Domestic Product of the most recent quarter. That is the ultimate indication of how well an economy has done without showing where it is heading. Seeing the trend of GDP gives some indication to help in our analysis of the economy.
The most important Lagging Indicator is Unemployment – it is important to ignore. The Unemployment rate is one of the most commonly reported indicators on the evening news. Most people look at it (especially if they are among the unemployed) and think that is where the economy is headed, but that is incorrect. The truth is that companies hire after their financial situations improve, but by then stock prices have already climbed to reflect this rise in profits. In August 2010, the stock market has been in a bull market for 18 months while the national unemployment rate has not improved much over the same period. This shows unemployment is a lagging indicator.
Keep an eye on the Leading Indicators to drive the vehicle of your investments and you will improve where you want to go.
I offer Free Stock Picks for Investors at: http://tradergstocks.blogspot.com/
Many Profitable Returns,
Gregg Killpack
The key to understanding economic indicators is whether the indicator is leading, coincident, or lagging.
All Indicators are Not Created Equal
Economic indicators are like driving in your car. Leading indicators are like looking through the front windshield to see where you’re going, Coincident indicators are like looking out the side mirror to show you where you are, and Lagging indicators are like looking in the rearview mirror to see where you have been. The problem comes when you look at all three images and don’t know which is forward, sideways, or backwards. Trying to drive with the views garbled would be difficult indeed.
As investors, leading indicators are the most important to us because the stock market is also a leading indicator. We want to find the earliest leading indicators that we can and notice the co-incident indicators to confirm what the leading indicators are telling us. That will help us invest at the right time – when stocks are going up or about to go up. Stock prices follow corporate profits, so we want to find economic indicators that rise before corporate profits.
Leading indicators include Hourly Earnings, Consumer Spending, and the Consumer Price Index or CPI.
Average Hourly Wages show the wages that employees earn. Many employees will spend all they make, so as this number goes up there is more money being spent and the economy grows.
Consumer Spending, known officially as Personal Consumption Expenditures or PCE, is similar to hourly wages. As consumers spend more, the economy improves soon after. Corporate profits tend to follow average hourly wages and consumer spending up and down.
The Consumer Price Index or CPI is a broad measure of inflation. It breaks down inflation into many different categories that give a solid understanding of where inflation is coming from – if it is across the board or just a temporary reading in one sector.
This leading indicator is a huge danger signal to warn against coming bear markets. When inflation gets too high, the Federal Reserve raises interest rates. All companies with debt are forced to pay higher rates, cutting directly into profits, not to mention consumers. When the Fed continues to raise rates, a bear market is sure to follow.
The best coincident indicator to watch is the GDP or Gross Domestic Product of the most recent quarter. That is the ultimate indication of how well an economy has done without showing where it is heading. Seeing the trend of GDP gives some indication to help in our analysis of the economy.
The most important Lagging Indicator is Unemployment – it is important to ignore. The Unemployment rate is one of the most commonly reported indicators on the evening news. Most people look at it (especially if they are among the unemployed) and think that is where the economy is headed, but that is incorrect. The truth is that companies hire after their financial situations improve, but by then stock prices have already climbed to reflect this rise in profits. In August 2010, the stock market has been in a bull market for 18 months while the national unemployment rate has not improved much over the same period. This shows unemployment is a lagging indicator.
Keep an eye on the Leading Indicators to drive the vehicle of your investments and you will improve where you want to go.
I offer Free Stock Picks for Investors at: http://tradergstocks.blogspot.com/
Many Profitable Returns,
Gregg Killpack
Saturday, August 14, 2010
The Economy & Stocks – What Comes Next?
Are you nervous about the economy? Are you afraid that stock prices might drop further from here?
Amateur investors typically get nervous at times like this. The nice uptrend in stocks from March 2009 until April 2010 has now faltered over the past 3 ½ months. Suddenly many press releases and articles on investor sentiment that were so rosy previously are suggesting we’ve entered another bear market and that the U.S. may see a “double-dip” recession. Without being an expert on the stock market or the economy, how can you really know what is going on?
The answer: just look at stock prices.
The Dow Jones Industrial Average is an index that averages the prices of 30 major stocks. These stocks are from a diverse list of industries and sectors, giving us a snapshot of how the economy looks overall. Therefore, the prices of the stocks in this index indicate what the smart money thinks of how the economy is doing.
So you don’t need to be an economist; you just need to see how amateurs and professionals have voted with their money. This can be seen in the stock charts.
This is a chart of the DJIA from the March 2009 low to mid-August 2010. This is a good chart to look at because this is the big picture. This is what is really happening with stock prices.
You can see we had a full year of stock gains from March 2009 to April 2010 and the DJIA went up from around 6,800 to over 11,200. That is a gain of 65%. Since the high, we have had a pullback of 10-15%. That is just a tiny pullback after such a big rise in stock prices. It is perfectly normal for stocks to take a breather and go sideways, more or less, for a few months until the bull market resumes. The market is acting very much like the run up in stocks in 2003 and the sideways action in mid-2004. In fact, I predict future stock prices for the remainder of this year to act much like they did in the Fall of 2004.
If the smart money really thought that the economy was in big trouble, it wouldn’t be going sideways after a big run up – it would be going down. In fact, if the smart money really believed such bad things for the economy, the big rise in prices never would have happened in the first place.
You may have noticed that, certainly not all, but many companies have posted excellent earnings in the last earnings season. That is the most important thing to watch right now, because that is what drives stock prices, and watch the DJIA. Ignore the pessimistic articles. They are written mainly by people trying to scare you to death so you will buy something from them.
I offer Free Stock Picks for Investors at:
http://tradergstocks.blogspot.com/
You can see this article with the charts included at:
http://traderg-ezine-articles.blogspot.com/
Amateur investors typically get nervous at times like this. The nice uptrend in stocks from March 2009 until April 2010 has now faltered over the past 3 ½ months. Suddenly many press releases and articles on investor sentiment that were so rosy previously are suggesting we’ve entered another bear market and that the U.S. may see a “double-dip” recession. Without being an expert on the stock market or the economy, how can you really know what is going on?
The answer: just look at stock prices.
The Dow Jones Industrial Average is an index that averages the prices of 30 major stocks. These stocks are from a diverse list of industries and sectors, giving us a snapshot of how the economy looks overall. Therefore, the prices of the stocks in this index indicate what the smart money thinks of how the economy is doing.
So you don’t need to be an economist; you just need to see how amateurs and professionals have voted with their money. This can be seen in the stock charts.
This is a chart of the DJIA from the March 2009 low to mid-August 2010. This is a good chart to look at because this is the big picture. This is what is really happening with stock prices.
You can see we had a full year of stock gains from March 2009 to April 2010 and the DJIA went up from around 6,800 to over 11,200. That is a gain of 65%. Since the high, we have had a pullback of 10-15%. That is just a tiny pullback after such a big rise in stock prices. It is perfectly normal for stocks to take a breather and go sideways, more or less, for a few months until the bull market resumes. The market is acting very much like the run up in stocks in 2003 and the sideways action in mid-2004. In fact, I predict future stock prices for the remainder of this year to act much like they did in the Fall of 2004.
If the smart money really thought that the economy was in big trouble, it wouldn’t be going sideways after a big run up – it would be going down. In fact, if the smart money really believed such bad things for the economy, the big rise in prices never would have happened in the first place.
You may have noticed that, certainly not all, but many companies have posted excellent earnings in the last earnings season. That is the most important thing to watch right now, because that is what drives stock prices, and watch the DJIA. Ignore the pessimistic articles. They are written mainly by people trying to scare you to death so you will buy something from them.
I offer Free Stock Picks for Investors at:
http://tradergstocks.blogspot.com/
You can see this article with the charts included at:
http://traderg-ezine-articles.blogspot.com/
Stock Market Timing is Everything
Buy-and-hold investors haven’t done so well over the past decade. Generally speaking, if you bought stocks ten years ago and held to today, you are sitting at break-even as seen in the chart below. However, if you knew how to buy near “A” on the chart, and sell somewhere near “B”, you would have doubled your money over a five-year period. If you chose the right stocks, you would have tripled your investment or more.
However, most investors don’t know how to do that. Most investors buy at the wrong time and sell at the wrong time. They don’t see the freight train coming in time to avoid getting run over. On the other hand, when stocks are bottoming out and starting to climb quickly, they wait too late to start buying again. They just got beat up badly and now they want more confirmation the market will keep going up before they get in. Meanwhile the market climbs, leaving them behind.
That’s exactly what happened with a fund I was in during the late 1990’s. The fund manager was aggressive and he made money fast while stocks were going up. Then he lost money fast when stocks went down in the 2000-2002 recession. It might have been ok if he had stayed aggressive and made money when stocks started to rise again, but he got conservative at the bottom and failed to make back the money he lost. Needless to say, I sold all shares in the fund…. permanently.
In 2000, I started buying stocks aggressively on margin at the very end of the bull market and lost several thousand dollars before the end of the year. In 2000 I learned the meaning of the words, “margin call.” My friend had more money in his portfolio. He watched the value of his account drop for two and a half years before he could take it no more and sold everything – almost near the exact bottom. A bull market began soon after.
Investors need to learn how high stocks tend to go over what time period and how far and how fast they fall. No one knows the future with certainty, but there are often signs that trouble is ahead with the economy and that we should at least proceed cautiously.
Learning more about investing in stocks and reading the economy can help you improve your returns. A little knowledge goes a long way in the stock market. We give free stock picks at:
http://tradergstocks.blogspot.com/
Many profitable returns,
Gregg Killpack
However, most investors don’t know how to do that. Most investors buy at the wrong time and sell at the wrong time. They don’t see the freight train coming in time to avoid getting run over. On the other hand, when stocks are bottoming out and starting to climb quickly, they wait too late to start buying again. They just got beat up badly and now they want more confirmation the market will keep going up before they get in. Meanwhile the market climbs, leaving them behind.
That’s exactly what happened with a fund I was in during the late 1990’s. The fund manager was aggressive and he made money fast while stocks were going up. Then he lost money fast when stocks went down in the 2000-2002 recession. It might have been ok if he had stayed aggressive and made money when stocks started to rise again, but he got conservative at the bottom and failed to make back the money he lost. Needless to say, I sold all shares in the fund…. permanently.
In 2000, I started buying stocks aggressively on margin at the very end of the bull market and lost several thousand dollars before the end of the year. In 2000 I learned the meaning of the words, “margin call.” My friend had more money in his portfolio. He watched the value of his account drop for two and a half years before he could take it no more and sold everything – almost near the exact bottom. A bull market began soon after.
Learning more about investing in stocks and reading the economy can help you improve your returns. A little knowledge goes a long way in the stock market. We give free stock picks at:
http://tradergstocks.blogspot.com/
Many profitable returns,
Gregg Killpack
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