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Alphatrends Stocktoberfest 0/26/12

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  • 1. Brian ShannonOn stocktwits @alphatrends
  • 2. There is only ONE REASON to buy stocks To MAKE MONEY!!What may different is our approachFUNDAMENTAL ANALYSIS-Sales & Earnings, News, Valuations, Macro events, FederalReserve, Europe, etc.-Does story make sense?TECHNICAL ANALYSIS-Moving averages, Fibonacci, Pivot levels, Prior Support &Resistance, Timeframes, etc.-Who is in control, buyers or sellers?*Combining Fundamentals & Technicals gives us best opportunities
  • 3. Technical analysis allows us to objectively observe price actionso we can minimize the impact of emotional decision making Listen to the message of the market, not your emotions!
  • 4. Stage 1- AccumulationOccurs after a drop in prices. The process of buyers gaining control from sellerswhich leads to markup.Stage 2- MarkupBullish phase of a stocks life which is defined by higher highs and higher lows.This is where you want too get long on breakouts and after short termpullbacks. Rallies are “innocent until proven guilty”Stage 3- DistributionOccurs after a prolonged price advance, process of sellers gaining control ofprices, which leads to decline.Stage 4- DeclineBearish phase of a stocks life, this is where you want to be short. Look to sellshort fresh breakdowns through support levels and after short term rallies haveexhausted themselves. Rally attempts are “guilty until proven innocent”
  • 5. Cyclical Flow of Money Through Markets (4 Stages) 3 2 2 1 41 1- Accumulation 3- Distribution 2- Markup 4 - Decline
  • 6. Combining Timeframes• LONG TERM timeframe to find potentialcandidates• INTERMEDIATE TERM timeframe to identifykey support and resistance levels for risk/ reward•SHORT TERM timeframe for fine tuning entryand exit decisionsARE YOU AN INVESTOR, SWINGTRADER, DAYTRADER? Timeframes to study will vary
  • 7. Alphatrends Focus is Swing Trade Opportunities Key Timeframes & Moving AveragesWeekly -Real long term (2-5 years)200 day (40 week)Daily- Long term (150-250 days) Determine Primary Trend50 day (10 week)Intraday- Intermediate term (10-30 days) Risk/Reward Analysis5 day (65 periods on 30 minute timeframe or 195 period on 10minute timeframe)Short term- 1-2 minutes (1-2 days) Fine Tuning Entry/ ExitVolume Weighted Average Price (VWAP)
  • 8. Before Entering a position (long or short) answer 2 Important Questions1- Where has stock come from? RISKHas it expended a lot of energy, is it extended, what isvolume pattern, where does stop go?2- Where does it have the potential to go before likelyresistance (long) or support (short) is found? REWARDIs there enough profit potential relative to perceivedrisk? GIGO
  • 9. 1- ANTICIPATE all potential scenarios- Seek out low risk entries.What is low risk entry? A period of volatility contraction after ashort term counter trend move- a pullback…What can go wrong, what can go right? Develop your Risk/Reward2- Wait for PRICE CONFIRMATION before you PARTICIPATE3- MANAGE RISK!This is the # 1 JOB of a traderInitial protective stopProtect profits, winners DO NOT take care of themselves, theyneed to be managed
  • 10. www.alphatrends.net
  • 11. Scan the market in multiple timeframes simultaneously fortrend alignment opportunities at www.alphascanner.com User: stocktoberfest Password: coronado Valid through 11/9/12 On stocktwits @alphatrends