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Short Term Trading – Trailing Stops

trailing stopsTrailing stop losses are a valuable tool when short term trading using technical analysis. Once a breakeven stop is reached, the trailing stop helps lock in profits as the trade progresses. The trailing stop removes angst and decision making during the trade as it provides a definitive answer as to when to close a position. They can be part of a computerised trading system to trigger exits or as part of a discretionary trader’s arsenal.

As with profit targets, the exit criteria is known and planned for before the trade is initiated. The exact level at which the trailing stop triggers is not known, but the conditions which are to trigger an exit certainly are. Such stops can be left in the market so they are triggered on an intraday basis for the end of day trader, negating the need to constantly watch the market, and allow the user to let profits run and cut losses short.

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Stock Trading: My Top 5 Stock Trading Books

top stock trading booksCraig Fisher, Portfolio Analyst from The Chartist, has broken out of the beginner's cycle (finally!) Craig has put together a list of his top 5 stock trading books. These are the trading books he wishes he had found earlier and that he goes back to on a regular bases.

As my trading experience grows I am tending to read less stock market trading books, but still enjoy doing so. In my formative years, I read as much as I could but still would not profess to having ‘read them all’ by any stretch of the imagination – far from it. As a beginner I tended to focus on the Australian share market and consequently Australian books. It was probably also a function of price as they were significantly more affordable than those from the US. If I had my time over, I would research books a lot more and not let price be so much of a buying criteria, as my shelves are full of disappointing books that really don’t teach you much of what really matters.

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Online Share Trading: Breaking the Beginner’s Cycle

online share tradingThe advent of online share trading has seen a dramatic increase in stock market newsletters and courses. Many traders inadvertently find themselves stuck in the beginner’s cycle. They may have attended a course or seminar, or purchased a black box system only to find the results are drastically different from those that were touted, so they move onto the next one.

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The Chartist: A Unique Stock Market Newsletter

The Chartist newsletterStock market newsletters abound however The Chartist is a newsletter like no other. Nick Radge, Head of Research & Trading at The Chartist, is renowned for being very direct and straight to the point. Nick established The Chartist with Trish Radge in 1998. The Chartist offers insightful analysis of ASX stocks and global markets.

The Chartist is different because we invest our money the same way we advise our subscribers to. Nick Radge personally trades the US Power Setups®, the US Momentum strategy and he uses the Growth Portfolio to manage his self managed super fund (SMSF). The Chartist employs three technical analysts who have all been mentored by Nick during the last 10 years. They are each specialists in their own way.

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What is Technical Analysis?

stock chart manTechnical analysis assumes that price reflects all that is known about a company at any given point in time. Of course, the disciplines can be combined. History repeats in many walks of life and price action that represents supply and demand, driven by the psychology of market participants, should be no different. Therefore it makes sense to me, that analysis of historical data is really a search for repeatable patterns or occurrences within that data that may repeat in real time over and over. It is a process of stacking the odds in your favour rather than one of prediction. It is a process of utilising probabilities and statistics.

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A Share Trader’s Journey: Changing Direction

Craig Fisher
What made me become a share trader? Having an early mid-life crisis in my thirties, I came to the realisation that the career path I had been blindly following for many years was not fulfilling me at all. As a result, I started to look for something else, but had no real idea in which direction I wanted to now travel, especially as far as employment was concerned.

During my search for career change ideas and potential businesses to start, I came across several advertisements for share trading software or stock market newsletters. I had previously had reasonable results buying shares and holding them for a while so the idea of trading appealed to me.

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How Does Nick Radge from The Chartist Manage his SMSF?

My self managed superA few people have commented, after reading Unholy Grails, that they had no idea The Chartist did anything other than charting analysis. So I would like to introduce you to the strategy I use for managing our SMSF: the Growth Portfolio. The Growth Portfolio is designed to captures trends - trends in the market and trends in individual stocks. The Growth Portfolio is a pure trend following strategy designed to keep you fully invested during bull markets and in cash during prolonged bear markets. Its unique Index Filter ensures that your capital is protected during events such as the Global Financial Crisis.

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Technical Analysis Does the Hard Work

Nick arms folded flipInvestment Talk with John Hallows Sunday Telegraph, 27th November 2005
Over the years I’ve has a lot of fun being rude about technical analysis – to give what’s usually called “charting” its proper name. What always sparks my doubt is that the markets generally rise or crash as a result of outside, non-market events, which market graphs can’t predict, whatever enthusiastic chartists suggest. But now I have to haul up the white flag on this long-cherished position.

I’ve finally found someone who makes sense with technical analysis. And he spells out two important points that every direct share investor should know about. This light on the M4 to Damascus was shone by Nick Radge, a one-time Macquarie Bank Associate-director who’s still under 40 and lives comfortably in Noosa, playing the active investor on the markets and the charting guru for clients. His first principle should strike chords with finance professionals as well as normal investors.

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