So what’s the plan?

January 08, 2023

One of my all time favorite bad–s guys is Ben Franklin, yeah that Ben Franklin. Ben not only discovered electricity but also helped bring a end to the revolutionary war. Franklin was a statesman, and a genius there’s no denying that. One of his more famous quotes that I absolutely love is “If you fail to plan then you plan to fail”

Successful stock investing takes planning. It does. You might make some money now and again without a plan, but to become sustainable and stay sustainable you better have your plan written down on paper. Would you go to the bank asking for a loan to open a new business without a business plan? They’d kindly show you to the door.

Would your favorite sports team go to their big game without a plan or set of rules? It would be kind of hard for them to compete.

Your plan should fit your style of trading / investing. It should represent what you want to achieve. How you intend to do it and the rules along the way.

I’m going to attach my personal Trading Rules here for you to view. Over the years I’ve written them and re-written them more than once. A few of these rules I may deviate from time to time if a strong opportunity presents itself. These rules may not fit you or your style and that is okay, but not having a plan at all is not….

Invest wisely, live charitably and be well

Brother Bill

DISCLAIMER: All content provided in this newsletter, blog, webinar, video, chart, communication is for Educational and Entertainment purposes only. Nothing included or mentioned is meant to be construed or used as trading / investment / financial advice. Trading / investing carries risk of loss, losses can and do occur. NO recording aloud…Know your risk and risk of loss before taking on any financial endeavors. Past performance is NOT a guarantee of future success. I am NOT a licensed or registered financial advisor or tax accountant. Prior to making any trading / investing /  financial decisions you should always consult with your licensed and registered financial advisor and tax accountant. There are no recommendations or solicitations  to buy, sell or hold any stock, future, options or bonds or any other financial entity in this newsletter. Nor are there any recommendations on any type or way or method to trade / invest. You do not have permission to redistribute this newsletter without my written permission first.

My Trading Rules

Monday JAN 16th, 2017

by Brother Bill

These are my personal rules for entering and exiting trades. This is used primarily for swing trading long stock but also as an added scan for options. Options are an animal all their own and require additional parameters such as DTE, Debit vs.Credit, O.I. etc.. Options trading rules will be a separate sheet.

     1.  Only trade underlying’s with 1 Million shares traded daily or greater. Thin issues  mean there is no institutional support and weakness.  

      2. Only trade underlying’s with a price of $20.00 or greater

      3. Only buy when the general market is up and sell when the general market condition is down

      4. Look for the strongest stocks from the strongest industries out of the strongest sectors from the leading Indexes. Strength builds strength, weakness creates weakness. 

      5. Never forget, debate or even consider anything other than that the market is always right and the trader is wrong. ( Livermore 101 )

      6. When possible trade stocks that have broken out or broken down ( shorts ) from long consolidation periods. Look for a minimum of 5 months or longer in a consolidation range. “The longer the base the higher to space”!

      7. Wait until AFTER the underlying has reported earnings before making the initial purchase.

      8. If a stock breaks out from a longer term consolidation range with a Gap, ( most longer term periods will ) wait for the Gap to give confirmation before entering the trade. Allow the “dumb money” to chase it while the “smart money” works with it. 

9. Use weekly and daily charts going back a minimum of 1 year. If a chart has irregularities or an interesting point in it, go back 3 or even 5 years for a longer look back. Though past performance is no guarantee of future success, chart patterns , like history, often repeat themselves.

     10. Use Simple Moving Averages. When there is a bounce back up off of a retracement to a recognized SMA use that as an add on point from your initial purchase of a breakout. But make the initial purchase the largest. If it moves against you, get out.

   11. Set profit targets. Stick with them unless your underlying is showing signs of tremendous strength including increasing volume. At that point raise the target but raise your stop also. 

   12. Never average down. That is not for serious or successful traders, period.

   13. Do not trade, invest or make any type of financial decisions if there is over burdening emotional stress ( family illness or other ) or if you are “under the weather” or injured to the point that your total undivided focus and attention is not there and 110% focused.

  14. Never stop studying and learning about the markets. Be a student of the markets. Learn from the past and study the masters.  Learn to overcome greed by focusing on Capital Preservation. This requires more than chart mastery but also a deep understanding of your trader psychology and how it affects or benefits you. 

   15. Let your winners ride. Obey earlier mentioned profit targets

   16. Cut all losses short, small and quick. PERIOD, End of that topic

 17. Help others when you can. Everyone starts somewhere, not all will make it in this business, most won’t, but always be there to help if someone sincerely wants to learn. 

    18. Have Fun