Courtney Capital June Written and presented by David William Paul

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Suzan Lisa Haynes
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1 June 2012 Written and presented by David William Paul

2 WHAT I DO 1. Intraday trading of major forex pairs and Dow Jones index 2. Swing trades lasting 2-10 days in stocks and futures. 3. Core trades in Stocks lasting 2-6 months 4. A pension stock portfolio focusing on yield

3 To make cash in any timeframe we need three things 1. A Method 2. Manage our Money 3. Manage ourselves

4 PROBABILITIES L 50/50 66/100 80/100 1 ½ 1/3 1/5 2 ¼ 1/9 1/25 3 1/8 1/27 1/ /16 1/81 1/625 The table summarizes the relationship between hit rate and the probability of a streak of poor luck. This will help you work out how much drawdown is probable with your system, assuming you have data re its hit rate. Clearly a higher position sizing model will be possible with a high hit rate system

5 You only need to master one setup to be a consistently profitable trader. Screen time will allow you to master one setup. After you have mastered one setup "own it " you can add another setup. This can be an ongoing process developing your own style.

6 The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability. We are all different. Our brains and personalities will gravitate to different setups. This is also true of exit techniques. Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one.

7 They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably. The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both.

8 PICK ONE SETUP, MASTER IT, BE CONSISTENTLY PROFITABLE DO IT NOW THE ALTERNATIVE IS STILL TO BE LOOKING FOR PERFECTION IN 2025 Can Discipline be BUILT or is it GOD given???????

9 OF COURSE IT CAN BE BUILT. To build discipline I recommend that a trader starts with a mechanical system which requires little or no subjective input. Resolve to stick to the rules and take 30 trades in a sequence without fear or hesitation. It takes strength but if you tackle this exercise along the way immense trading discipline will be EARNED. A common saying is that only 5% of people make money in leveraged trading. I have found that only 5% of people can stick to a simple set of rules. Coincidence??

10 When trading discipline has been build then feel free to experiment with a more subjective approach Many traders never get there. There seems to a door slam shut on the subjective as the position size rises. I am primarily a systems trader and bringing a quantitative measure of the fundamentals into the technical picture has helped a lot.

11 RULE 1 The Good trade is the hard trade I don t mean that the trade is intellectually difficult Or that the analysis is complex I mean that it emotionally difficult to complete Trades that look like certainties tend to be traps. Buying support is hard. Selling resistance is tough Easier to be buying at tops and selling at bottoms If we are not careful we end up buying high and selling low

12 Rule 2. FADE THE SHORT TERM TREND IN THE DIRECTION OF THE LONG TERM TREND.

13 Rule 3 I put my entries where the masses put their stops

14 History may not repeat its self but it rhymes Mark Twain

15 I use VectorVest to find undervalued shares. Each night the program uses the fundamentals of the last 6 years to calculate a value for each share in the database. In addition the program look at the fundamentals and calculates the earnings for the next three years. It assumes that sometime within the three years that these earnings will be fully reflected in the share price The upside is then divided by the return from a short dated government bond to result in a concept called relative value.

17 The program uses the fundamentals to calculate the safety of earnings which is called RS The program then measures the strength of the trend which is called RT In VectorVest all is calibrated between 0 and 2. Anything above 1 is positive and the further above 1 the more bullish the picture.

18 Finally the program combines RV, RS and RT into the master indicator VST and as a default ranks the shares in the database in terms of VST. This is where the winners lie. THE OBJECTIVE IS TO BUY INTO UNDERVALUED STOCKS WITH SAFE EARNINGS HISTORY THAT ARE GOING UP WHEN THE GENERAL MARKET IS GOING UP. The program looks at the general market and gives a solid measure of the short term and the long term trends.

20 The short term trend is calculated from the momentum and the breadth of the advance. Its shown diagrammatically in the form of a traffic light.

22 I personally only trade these days in high VST stocks For the discipline building exercise the DEW technique is a great tool. D is the detrended momentum oscillator E is an envelope in price that makes excellent objectives W is a weighted moving average

23 1. The price closes above the weighted moving average. 2. The detrended price oscillator moves above its centre line. When these have both been fulfilled buy the share at the open. Try and hold until the price pierces the band A knowledge of FIB will help most with targets

29 Don t short undervalued shares with safe earnings

Icoachtrader Consulting Service WELCOME TO. Trading Boot Camp. Day 5

Icoachtrader Consulting Service www.icoachtrader.weebly.com WELCOME TO Trading Boot Camp Day 5 David Ha Ngo Trading Coach Phone: 1.650.899.1088 Email: icoachtrader@gmail.com The information presented is