Rules To Trade By

These are ground rules I trade by.

Risk Management

• Every trade gets a stop, 5% maximum loss total on any trade.

• Protect profits at all times. 

• Don't let a profitable trade turn into a loss... ever.

• Profits - Some of it is better than none of it. You'll never get all of it. 

Execution

• Buy at support.

• Don't buy or short on the 3rd day of a move.

• Be more patient, go for 10-30% profits rather than 2-5%

Seeking Opportunities

• Look for technical patterns and potential breakouts.

• Before a buy or short check conditions: Market > Sector > Stock

SP500 Turning Over?

SP500 is showing some signs of weakness. Could this be a shot across the bow signaling more selling to come? Looking for a short term over sold bounce but the market is in need of a catalyst to move it to new highs.

Crude Outlook - USO

Unless there is a catalyst at play (conflict, supply, dollar whatever) crude could have tough time moving through mutli-year resistance. Will history repeat itself?

Historically over the past 3 years crude has hit the same resistance level (or gone higher) and sold off in the April/May months we are now in. 

Average crude prices tend to run strong Feb-Aug. USO is not quite reflecting this over the past few years.

Lots of overheard resistance to chew through with weak volume, RSI and MACD signals. Crude appears to need a catalyst in order to break through.

Set-Ups 4/5/12: CP, GLD, IBB, TAP, ROST, KORS

One of the best performing railroad stocks. This stock is working with little overhead resistance.

Gold is heading lower. Short on a re-test of the middle Bollinger band.

Biotech is working. No obvious entry here.

Rocky Mountain tap water is in trouble. Short play.

These 2 retail stocks are working. Looking to buy and hold.