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Abstract

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Stock Trend System

The trading system for trend riders
Let the stock market machine work for you...

That sounds as if there were a ghost or a money machine ready to serve
you. But is there one? The stock market itself is it - in combination
with the right trading system!

Competition in the markets is fierce, everybody tries to win and
clearly not everyone can win. What one earns must be paid by others.
Without a working trading system one will most likely end up at the
wrong side. Moreover, most systems that get published will lose their
efficiency over time. The cake is not infinitely big and the market
adapts ghostly to the group of winners that has become too large,
leveling their advantage down.

Yet, for a small minority there is a way to consistently escape the
crunching mechanisms of the markets. In order to get an impression of
what that could be, let's have a look at a chart of one of the recent
stars of the stock market:

A 100-fold increase in 3 years

Stock trading at the high-

During its steep ascent the price of Hansen Natural's stock got
multiplied by a factor of about 100 in a matter of only 3 years. This
is of course hindsight and I presented on purpose an impressive
example, but the chart demonstrates something.

It shows directly that you could have made hundredfold back of what you
invested. Stocks often have large moves, much bigger than the ones of
commodities or currencies. But at risk would have been only the
investment itself. This asymmetry clearly favors stocks over all other
financial instruments. Their leverage is no compensation for the
asymmetric price behavior the stock investor enjoys. Trading on margin
with Forex or futures can let the account go below zero, which is
simply a linear and not a logarithmic growth behavior. Options have a
premium that decreases with time, which destroys the advantage their
non-linear pricing pretends to offer at a first glance.
But there is something else. The multiplying happened with a trend that
went straight up and was almost always at its current high. In such a
situation the market forces that are playing against the small trader
are diminished....

Most traders, and investors even more, are not aware that a price at
the high is a different situation than a price elsewhere. Generally, it
is a signal for more of the same to come and not for a retreat, as it
may look to so many. It is an exceptional situation, indicating that
there is a force hindering the price to swing back, which it normally
would do.

Still, trading is what it used to be, a statistical game. There are
situations near the high where the odds are skewed to your favor, but
you must be able to identify them and to behave methodically. In other
words, to exploit this exception, a trading system is necessary.

What characterizes this trading system?

It is a trading system for the stock market that is trying to
take advantage of longer-term moves of stocks. That does not mean that
only long-time investments are put on. Chances for swing trades are
also more likely found and successfully executed within a longer
lasting upwards move or a relative price strength in a bear market.
At its best a stock gets held for many month, but only few
trades will make it that long and so typical holding periods are
starting from one day, commonly lasting a few days up to a few weeks.
Trades are not conducted to be swing trades or longer investments,
instead a position is held as long as it makes sense - the market
decides, according to the rules of this system, of course.
Daily bar charts are the main instrument to feel the stock's
pulse technically.
On the fundamental side only the most accessible information
is necessary.
The whole system works with tight stops. For that matter,
sales can occur at the day of buying.
Often trades can be executed automatically with a suitable
limit or stop order. Depending on the situation this may hold true for
entry and exit orders.
This system can be applied also to ETFs and more generally to
everything that is traded on stock exchanges.

Possibly interested in this system could be trend followers and swing
traders, but also investors who want to pursue a more active approach
in the market. It may be also valuable for day traders, even if they
are not willing to use the longer-term components of the system. But
who knows, perhaps one or the other of them will finally find out where
the real money is.

Why is this trading system interesting?

The whole stock universe is screened by selection criteria for
companies with the right product coupled with long-term price strength
of their stocks. The fundamental growth situation of a company that is
caused by its special product is something which likely has an ongoing
momentum. Together with a confirming price strength this is the best
possible indicator for an enduring trend. Consequently this process
will find the gems that have the greatest future potential.
There is a set of simple rules accompanied by three groups of
buy setups and another set of sell signals. This rigid structure
enables a daily bar oriented trading style. There are situations where
intraday charts may be used, but the emphasis lies on trading the daily
bar chart and you can ignore completely any information with a
shorter-term horizon. This rule-based trend trading system tries to
achieve efficiency with simplicity.
Both points above suggest that this is the modern version of
Nicolas Darvas' famous "techno-fundamental" trading system. However,
its entry system is much more elaborated to be better adapted to modern
market behavior. The selection of trading candidates is also more
sophisticated. Darvas entered a stock only at its absolute high,
something that proves to be a real constraint. If, for instance, the
whole market is weak, this method allows to trade on relative strength
alone far from the actual high. There are other differences like money
management. Darvas essentially had none, as he grossly over-traded back
then. But luck was with him, as he started directly at the beginning of
a bull market. This trading system could be viewed as the successor of
the Darvas method. Major parts of it, like the entry rules, got
replaced completely and all in all it is much more refined as a system.
A necessary part of any trading system is sound money
management. This system maximizes the long-term performance and keeps
the principal risks in check. Simply diversifying into many stocks is
not the answer, because that would dilute not only the single failure
but also the single gain away. Instead, using the right borderlines,
knowing what you can do and what not, is the key. While money
management principles have to work on their own as a final safety net,
this system supports them with strong help from the trading side. Some
of the trading rules represent a stiff stop-loss system.
This is a semi-automated system that tries to beat completely
mechanical ones. There is a frame of precise rules that incorporate the
"tricks" of trading at the high, but there is also the trader. For that
reason one whole chapter is devoted to psychology, including a
comprehensive list of what can possibly go wrong with solutions or at
least ideas to get on the right track.
Ideally this trading system enables its followers to earn with
a modest amount of work a maximum of return. Does it make sense to hope
for big gains with trading slow moving stocks, dull stocks of dull
companies or even slower moving currencies? Or to do the opposite and
chase tiny intraday movements with an exhausting maximum of
concentration? Is it wise to invest in stocks that fell back and hope
that there was no sufficient reason for their fall? I don't say that
there are no other ways to trade, but in my opinion the best possible
thing to do, is to ride the best trends there are. As Darvas put it 50
years ago: "There was nothing else for me to do while Texas
Instruments, Zenith Radio and Fairchild Camera went to work for me.".

This trading system is available as an eBook, which is written in a
focused style and aims to be a thorough explanation of the system and a
manual or checklist for day-to-day use. I don't repeat much, if
anything, and I don't start with the basics. You should have already at
least some trading experience. Any successful trading system requires a
user willing to invest some work into understanding and executing it.
This trading system can lead to outstanding results, but it is not the
magic formula that makes everyone rich by producing infallible buy and
sell signals. If you have already traded, you know that there is no
such thing. It also should be clear that it can't exist for logical
reasons.

The eBook has 117 pages and comes as a digital product, namely a PDF
file, which can be viewed with any modern PDF reader like the one from
Adobe. You can also print it out or read it with accessibility tools.

Interest in fast moving stocks is an indicator that this system is
right for you. If you are a convinced value investor, it may only suit
you if you are willing to experiment. Of course, you are welcome to try
it. Many investors changed successfully their trading mind. As I
mentioned before, if you like Forex, futures or options more than
stocks, I strongly urge you to do so anyway.

In case you want to have this system, you can get it right now.
Immediately after your buy, which is securely processed by Clickbank,
you will get your personal download link from where you can download
the eBook. There will be an email address for possible download
problems or refunds. Clickbank has also a 60-day return policy and
processes all refunding requests. So you can rest assured that you are
exploring an investment with some intrinsic security right now. Trading
itself has potentially high returns but bears also risks. Here is the
legally required instruction about that and my disclaimer.

Why does the system work?

This trading system concentrates on stocks of companies with
products of the future, which already have shown a significant upwards
move. Trading at the high bends the probabilities around to your favor
for shorter trades and longer investments equally.
Whether a trade is for the long run, does not get decided
beforehand. Every entered position has the potential to be held for a
long time and because of the asymmetric price behavior of stocks that
translates to large profits.
With the precise entry logic and a matching stop system that
are both designed to exploit situations with pricing pressure near
short-term highs, it is also possible to make many smaller gains.

Stock Trend System

Trading for Trend Riders

Trading systems

Trading the biggest stocks of the future in their hot phase offers
enough room for many to prosper. I sincerely hope that this eBook will
enable you to improve your trading results and be among the cheering
winners.

All trading luck to you

P.S. Not really convinced? Understandable ;) But, if you are a trader
of derivative or other modern markets, read here what is not so right
with trading Forex, futures or options.

P.P.S. If you are a stock investor, you are on the right way, but you
might be interested why trading stocks is far superior to investing in
stocks.

Martin Britlaw

Stock Trend System
Trading �� About �� Disclaimer �� EBook
Copyright � stocktrendsystem

End of Abstract

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