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» How to Calculate the Future Value of an Investment
Yesterday at 11:46 am by Ethical Trader

» මුගාබේ ඉවත් වීමත් සමඟ 'හරාරේ' සැණකෙළි සිරි ගනියි
Yesterday at 11:34 am by Ethical Trader

» විසිපස් වසරක් ගෙවුනත් ඉල්ලීම් ඉටුවී නැහැ - නිදහස් මාධ්‍ය ව්‍යාපාරය
Yesterday at 11:30 am by Ethical Trader

» Dividend Announcement
Yesterday at 11:21 am by Ethical Trader

» කොටස් වෙළෙඳපොළේ ලැයිස්තුගත කෙරෙන අලුත්ම සමාගම – LVL Energy Fund Limited
Mon Nov 20, 2017 7:42 pm by nihal123

» අගමැති රනිල් බැඳුම්කර කොමිසම හමුවේ පැවසුවේ මොනවාද?
Mon Nov 20, 2017 7:08 pm by Ethical Trader

» Obituary Notice.
Mon Nov 20, 2017 3:03 pm by කිත්සිරි ද සිල්වා

» උතුරු කොරියාවේ "සබ්මැරීන බැලිස්ටික් මිසයිල වැඩසටහනකුත්"
Mon Nov 20, 2017 11:34 am by Ethical Trader

» උතුරු කොරියාව සහ න්‍යෂ්ඨික ප්‍රහාර: "නීති විරෝධී නියෝග පිළිපදින්නේ නෑ"
Mon Nov 20, 2017 11:28 am by Ethical Trader

» 'සොල්දාදුවාගේ සිරුරේ අඟල් එකොළහක පණුවෙක්'
Sun Nov 19, 2017 1:13 pm by කිත්සිරි ද සිල්වා

» මිනිස්සු දුවනවා, අපි නැවතිලා බලන් ඉන්නවා.
Fri Nov 17, 2017 5:46 pm by Ethical Trader

» Plantation sector updates
Fri Nov 17, 2017 11:54 am by lanka

» සිම්බාබ්වේ: ජනාධිපති රොබට් මුගාබේ "අත්අඩංගුවේ"
Fri Nov 17, 2017 9:54 am by Ethical Trader

» ආයෝජනයට ශ්‍රීලංකාවට එන්න එපා.! ජාත්‍යන්තර සමාගම් නිවේදනයකට සැරසෙයි
Wed Nov 15, 2017 8:15 pm by Admin

» Soldiers 'take over Zimbabwe broadcaster'
Wed Nov 15, 2017 5:52 am by කිත්සිරි ද සිල්වා

» බටහිර ලෝකය භේද කරන බවට රුසියාවට චෝදනා
Tue Nov 14, 2017 5:26 pm by Ethical Trader

» යුද අපරාධ සහ අතුරුදහන් කිරීම්: ශ්‍රී ලංකාවේ මානව හිමිකම් වාර්තාව ජිනීවා විමසුමට
Tue Nov 14, 2017 10:56 am by Ethical Trader

» ඉරාන, ඉරාක භූමිකම්පාවෙන් 200 කට වැඩි පිරිසක් මරුට
Mon Nov 13, 2017 5:27 pm by Ethical Trader

» මැද පෙරදිග බල තරඟය දරුණු අතට හැරෙයි
Mon Nov 13, 2017 3:16 pm by guruji

» වචන නම් අපේ ඒත් තනුව ?????????
Sun Nov 12, 2017 2:28 am by Rana

» දිල්ලියේ පරිසරය රැකීමට වාහන සලාක ක්‍රමයක්
Fri Nov 10, 2017 7:05 pm by Ethical Trader

» අයවැය සහ මෝටර් රථ: නව පිළිවෙතක්
Thu Nov 09, 2017 5:42 pm by Ethical Trader

» Flying is the Safest mode of Transport
Thu Nov 09, 2017 3:12 pm by කිත්සිරි ද සිල්වා

» In the Meantime, Within Our Shores !
Thu Nov 09, 2017 10:13 am by කිත්සිරි ද සිල්වා

» වංචා දුෂණ නඩු කඩිනම් කරන්න විශේෂ මහාධිකරණයක්
Wed Nov 08, 2017 4:54 pm by කිත්සිරි ද සිල්වා

» LIOC.N0000 (Lanka IOC PLC)
Wed Nov 08, 2017 4:48 pm by Ethical Trader

» ගින්නෙන් දැවෙන අලි පැටවාගේ සේයාරුව පළමු තැනට
Wed Nov 08, 2017 4:35 pm by Ethical Trader

» 10 Things to Remember Before You Take Things Personally
Tue Nov 07, 2017 5:38 pm by Ethical Trader

» හැම තැනම නැහැ, හැම දාම නැහැ
Tue Nov 07, 2017 5:30 pm by Ethical Trader

» Beware !
Mon Nov 06, 2017 10:56 am by CK

» සාම සාධක මෙහෙයුම් නිරීක්ෂණය කරන පළමු ශ්‍රී ලාංකික හමුදා නිලධාරිනියෝ
Sun Nov 05, 2017 12:44 pm by කිත්සිරි ද සිල්වා

» How to Find Undervalued Stocks and Turn a Large Profit
Sat Nov 04, 2017 11:24 am by Ethical Trader

» ඒකාබද්ධ විපක්ෂ කණ්ඩායමෙන් ශ්‍රීලනිපට කොන්දේසි හතක්
Thu Nov 02, 2017 6:29 pm by nihal123

» Taste of Asia
Thu Nov 02, 2017 12:27 pm by Ethical Trader

» නිව් යෝර්ක් ප්‍රහාරය : අවම වශයෙන් 8 දෙනෙක් මරුට
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» NTB.N0000 (NATIONS TRUST BANK PLC)
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» Laughter the Best Medicine
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» VPEL.N0000 (VALLIBEL POWER ERATHNA PLC )
Wed Nov 01, 2017 8:15 am by yellow knife

» TJL.N0000 (Textured Jersey Lanka PLC.)
Wed Nov 01, 2017 8:07 am by yellow knife

» TPL.N0000 (TALAWAKALE PLANTATIONS )
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» BFL.N0000 (Bairaha Farms PLC)
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» LLUB & BFL
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» HUNA.N0000
Tue Oct 31, 2017 9:26 am by yellow knife

» Sri Lanka's got Talent
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» Govt.electrocutes CEB
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» තනි පුද්ගල ණය ලක්ෂ 5 ට ආසන්නයි
Mon Oct 30, 2017 7:46 pm by nihal123

» ලෝක ඉතිහාසයේ විශාලතම කොටස් මිල කඩා වැටීම චීනයෙන් වාර්තා වෙයි
Mon Oct 30, 2017 7:45 pm by nihal123

» COMB.N0000 ( COMMERCIAL BANK OF CEYLON PLC )
Mon Oct 30, 2017 4:53 pm by Rana

» ධම්මික පෙරමුණට එයි
Sun Oct 29, 2017 10:09 pm by කිත්සිරි ද සිල්වා

» කොටස් මිල ඉහළ යාමෙන් ඇමේසන් ලොක්කා ලොව අංක එකේ සල්ලිකාරයා වුණේ මෙහෙමයි
Sun Oct 29, 2017 7:22 pm by nihal123

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Dan's 10 Golden Rules

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Dan's 10 Golden Rules

Post by nihal123 on Tue May 05, 2015 10:32 pm

1. Make sure the stock has a well formed base or pattern such as one described on this web site and can be found on the tab "Understanding Chart Patterns" on the home page, before considering purchase. Dan highlights stocks with these patterns in his newsletter.

2. Buy the stock as it moves over the trend line of that base or pattern and make sure that volume is above recent trend shortly after this "breakout" occurs. Never pay up by more than 5% above the trend line. You should also get to know your stock's thirty day moving average volume, which you can find on most stock quote pages such as eSignal's quote page.

3. Be very quick to sell your stock should it return back under the trend line or breakout point. Usually stops should be set about $1 below the breakout point. The more expensive the stock, the more leeway you can give it, but never have more than a $2 stop loss. Some people employ a 5% stop loss rule. This may mean selling a stock that just tried to breakout and fails in 20 minutes or 3 hours from the time it just broke out above your purchase price.

4. Sell 20 to 30% of your position as the stock moves up 15 to 20% from its breakout point.

5. Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember stocks are only good when they are moving up.

6. Identify and follow strong groups of stocks and try to keep your selections in these groups

7. After the market has moved for a substantial period of time, your stocks will become vulnerable to a sell off, which can happen so fast and hard you won't believe it. Learn to set new higher trend lines and learn reversal patterns to help your exit of stocks. Some of you may benefit from reading a book on Candlesticks or reading Encyclopedia of Chart Patterns, by Bulkowski. These books can be found on our RECOMMENDED READING page on the website.

8. Remember it takes volume to move stocks, so start getting to know your stock's volume behavior and then how it reacts to spikes in volume. You can see these spikes on any chart. Volume is the key to your stock's movement and success or failure.

9. Many stocks are mentioned in the newsletter with buy points. However just because it's mentioned with a buy point does not mean it's an outright buy when a buy point is touched. One must first see the action in the stock and combine it with its volume for the day at the time that buy point is hit and take keen notice of the overall market environment before considering purchases.

10. Never go on margin until you have mastered the market, charts and your emotions. Margin can wipe you out.

Dan's Trading Tips

Note: If you are new to trading or investing, I suggest reading these rules many times over until they become ingrained so you can act without emotions.

Stocks that breakout and move up with tremendous volume and close near the highs of the day seem to work out best. However many stocks that move up 15% or more on breakout day often fail. You'll just have to watch your stock's action like a hawk and get to see and understand these things over a long period of time. If trading were easy everyone would be making millions. It's not; it takes years and years of hard work and long hours.

Many traders employ a half hour rule, meaning that for the first half hour of the day many traders do not buy any stock that gaps up in price. If the price holds after the first half hour then often many traders will step in a buy the stock. I find this rule works good after the market has moved up for few strong weeks and is not very effective at the start of a new strong move.

If its earnings season then it's an absolute must that you know the date your company reports its earnings. Many traders prefer to be out of a stock 100% before a company reports earnings in case the company misses earnings or guides lower in which case the stock could plunge. Others reduce positions substantially before earnings are released to lower risk as a massive gap lower could be very destructive to your portfolio. The choice is up to you. You can see an earnings calendar on this web site by clicking on the Useful Stock Resources tab at the top of this page. Please verify this information by calling the company or visiting the company's website which you should be able to find in any search engine.

*The market moves in waves that can last anywhere from weeks to months. Then a correction or setback starts, which can last anywhere from 5 to 8 weeks or even as long at 4 to 6 months. If you are starting a free trial and are a novice you may be lucky to join just as the market gets underway, in which case you will see the full power of charting. If however you start after the move has been going for sometime then things won't look as good as traders are paring down positions. Or even worse the market could be selling down hard and working off the prior up move in which case you will be completely discouraged. The power of charts is through waiting for the correction to end whereby the chart patterns will then be fully developed. After weeks of base or pattern building, stocks will begin to lift off and that's when the big rewards come in. The question is, are you willing to wait and be here for the start of the next big move? The biggest mistake a novice can make is to come back after a move has started.

*Please read a few times my interviews in Stocks and Commodities and Traders' Magazine at the top of the home page of this web site. There are many tips and how - to's that will greatly improve your ability to understand how this works.

More good comments can be found in the FAQ section of this web site in the member login area.

I give setups of stocks that are ready to potentially move. That's my job. Your job is to get to know the stock and its movement along with the general market each day. You are the only one that can do this in realtime during market hours. Then if a stock acts well (i.e. volume is very heavy and the stock is moving easily out of the base) then that is the one to buy. I do not buy most stocks that breakout as most do not meet my heavy volume/price action behavior during the day. Also, I buy only the most expensive stocks as the percent loss is least if the stock pattern fails. High priced stocks are the best quality stocks as a general rule in playing the market. Remember to buy as close to the trendline as possible and the volume should come in at least 10 to 20 minutes after you buy (or even earlier) and if not by then, you know no one wants the stock and might as well check out early.

Thanks, Dan
http://www.chartpattern.com/10_golden_rules.html


Last edited by nihal123 on Tue May 05, 2015 10:33 pm; edited 1 time in total (Reason for editing : add web)
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nihal123
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