Information overload is a problem many traders face today. Financial
information is coming at us from all sides. Many Web sites offer
advice on trading and investing. Radio, television, and the print
media, are also culprits. It is difficult to know whom to trust, or
what to believe. It's no wonder that so many people are confused.
At TradeSmart we believe, that both traders and investors need a sound,
proven strategy, not investment "tips." No one out there has more interest
in your capital, than you do. You should make your own financial decisions,
based on sound business principles. Trading is a business, and it can be a
very profitable one. Trading can also be a very lucrative, part-time business.
Will every trade you make be profitable? Probably not, but each mistake must
be admitted, and dealt with at once.
My goal, when I began work on this manual, was to provide you with the tools,
and a proven trading strategy, to make you a top-notch trader. You will learn:
1. How to pick the best stocks.
2. How to time the market.
3. How to manage risk.
4. When to buy and sell, for optimum returns.
5. How to place your orders, to maximize your profits.
It is my sincere hope, that what you will learn in the chapters
that follow, will make you the successful trader you want to be.
You will learn how to pick stocks from the "cream of the crop".
These stocks will have the best risk/reward ratio, and the best
chance for explosive gains.
Nothing is more important than risk management, if you are to
stay in business. Determine the risk involved in each trade,
before you take it. Then, as soon as your trade is confirmed,
place a sell-stop order. If this price is hit, you will be out!
So simple, but it is very difficult for some people to execute,
and the biggest reason so many traders are not successful.
Many financial advisors believe, that it is impossible to time
the market. You will learn how easy it is to determine the trend
of any market. This is also difficult for some traders, it shouldn't be.
You will also learn how to capitalize on the wealth building capability
of compounding. Put these strategies into action, and you will be among
the elite. A professional trader!
Having now peaked your interest, you are probably afraid that
it may be too involved, and take more time than you can spare.
Let me assure you that it is neither difficult, nor time consuming.
It will take you less than one hour, a week, to compile, and rank,
your "Selection List." You will need another thirty minutes a week,
to update your portfolio. You will never have to make a subjective
judgment about which stock to buy. The peace of mind that this will
give you, will be well worth the small price of this manual.
You will be able to compile your "Selection List" using only five
basic rules. The strategy is purely mechanical, and doesn't require
a computer, charts, earnings reports, or even that you know what the
company does. However, both fundamental and technical analysis of a
stock is very important. All of the data needed, is obtained from
the "Investor's Business Daily" newspaper. This winning strategy will
give you more confidence than you have ever thought possible, in a
business that can be very risky.
If you use a computer, in Section II you will learn how to use the
TradeSmart System. This is the same system that was used to produce
the buy and sell recommendations when I was publishing the TradeSmart
newsletter.
To meet the objectives listed below, we use a strategy that is both
straightforward and conservative.
- Find The Leaders Early
We employ a mechanical screening process to isolate stocks with
sound fundamentals, and accelerating momentum. You will find the
leaders, before they are widely followed by Wall Street.
- Keep The Losses Small
We maximize our returns and minimize our risk, by holding only
the safest and most profitable stocks.
- Quick Turnaround
To make our money work as hard as it can, we sell a stock when
the rate of return slows down. Then, we replace it with a new
stock that will make our capital grow at a faster rate.
In summary, we find fundamentally sound stocks, that have the
momentum to become the leaders, and then we exit our position,
while the price is still advancing.
