Stock Raider -- Because stock trading is not a game

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Because stock trading is not a game

Creating your own Trading System

The only way to trade with any success is to trade with a trading system. There are millions of trading systems, from simple to complicated, from mechanical to eye-balling it. Some work, some don't work. On these pages I will explain a simple trading system.

Stocks either go up, down or sideways. If a stock goes up, it's trending up, and you want to trade long. If a stock goes down, it's trending down, and you want to short. In both those cases you trade like a trend follower, a trend trader. If a stock goes sideways, there is no trend, and you want to trade like a swing trader.

How do you know if a stock goes up? It depends on your time frame. This simple trading system is for medium term traders, people who look at daily charts, but the same principles can be applied to weekly, hour, 30-minute, etc charts. For daily charts, look at the 50 MA ( the 50 day simple moving average of price). The 50 MA can go up (trending up), down (trending down), or sideways (no trend).

Here is an example of a down trend where you want to go short or add to short positions on retracements. Notice that the price at times goes above the 50 MA, but there are no lows made above the 50 MA, and the majority of prices are below the 50 MA:

Here is an example of an up trend where you want to go long, or add to long positions on dips. Notice the price dips below the 50 MA (good places to start or add to a long), but there are no highs made below the 50 MA, and the majority of prices are above the 50 MA:

Here is an example of a sideways trend which you want to trade like a swing trader. Notice the price swings around the 50 MA, and prices are often above but also below the 50 MA, and in this case there is a clear channel which can be used for the swing trading:

Learn to recognize these 3 situations so that you can look at any stock graph and know it's in an uptrend, downtrend, or goes sideways.

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