I Ate Turkey, Slipped In Greece, Fell Down and Broke China!

Many of us are concerned about the current bullish trend we have been seeing in the markets. In this guest post, Benjamin Brinneman shows us some great educational strategies to trade equities in this market. If you like what you see, be sure to check out his site C Squared Trading.

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The so called tragedy in Greece is the only thing that lately has been pulling the market back for a few hundred points here and there. Though it seems it may cause catastrophic consequences, this is a huge risk that has been partially priced in. The point with these pullbacks is that they are great opportunities to purchase equities at a good discount and get a nice margin of safety. The reason for this argument is that the market would really have to have a sell-off session for several weeks in order to really break down the upward bull trend that we are currently in. No matter what the bears say, they have been losing for months and months!

One argument is that buying an index fund could have a great return over the next ten years and you would have never had to deal with trading an account. My argument is that a great trader can always beat a good investor. How is one way that this can be accomplished? Below I will outline a few ways of trading in this market strictly as an educational value and not investment advice. I have spoken about the Chinese equities being some of the most undervalued companies out there and great investments. Based off of my watch-list that I have at C Squared Trading, I utilize my strategy to trade in and out of these equities as I see fit.

The strategy is named the Triple-Whammy Trading Technique. Below is a description of a piece of the puzzle and how it works.

(Important Note: The Triple-Whammy Trading Technique only works well if the direction of the Bollinger Bands is primarily from left-to-right, rather than primarily up or down)

Set up your chart; make your chart-settings as follows:

1. Time Period: For day trading, 30 minutes or one hour; for swing trading, 3 days or longer
2. Chart Style: Candlestick
3. Chart Frequency: For day trading, one minute; for swing trading, 10, 15, or 30 minutes
4. Upper Indicators: EMA (9 period) and Bollinger Bands (20 period)
5. Lower Indicators: MACD (12, 26) and RSI (14)

Now you’re ready to proceed.. There are three essential components of this set-up:

For quick profits with a Triple-Whammy Perfect buy (Buy-Low-then-Sell-High; or Buy-to-Cover Short-Sell), these three legs are as follows:

1. The candlesticks will violate the lower Bollinger Band.
2. RSI must fall into oversold territory, under 30, and preferably in deeply oversold territory, under 20.
3. The MACD (blue) line must be under the signal (red) line, and falling; and then must turn back upwards and cross the signal line. The crossover is the final confirmation — but if the turn upward is sharp enough, you know it’s getting ready to do a crossover, so it’s best to go ahead and act, if the prior two conditions are already in place.

For quick profits with a Triple-Whammy Perfect sell (ShortSell-High-then-Buy-Low; or Sell-to-Close Long Position), these same three legs are as follows:

1. The candlesticks will violate the upper Bollinger Band.
2. RSI must rise into overbought territory, over 70, and preferably in steeply overbought territory, over 80.
3. The MACD (blue) line must be above the signal (red) line, and rising; and then must turn back downwards and cross the signal line. The crossover is the final confirmation.

This strategy is available as well as an additional advanced strategy that we just put together called the VWAP Quad Boom Setup. Both strategies are used by hedge fund traders here in Charlotte NC.

Both of these strategies will greatly enhance your trading right away by informing you of the trading ranges that you are in and how to enter and exit your trades. Another way, lately, of buying into equities fairly safely is to buy a breakout stock that is hitting its new 52 weeks highs. The way you would want to do is to see it hit its 52 week high and then wait for a pullback and then make an entry using the above strategy. The latest example of that was TRLG and SIRI both profited me and my banker buddy thousands of dollars in profits.

Another profitable thing to know, is how to fundamentally value a company and go into the nitty gritty of their balance sheets and income statements in order to find a company that is trading under their present values. Eventually they will run and come into their current understated value. One latest example is NEP, a great company that has lots of potential; we are just waiting on the audited financials from 2009. Trading with a solid understanding of Fundamental and Technical Analysis is key to great success in trading or investing. You must combine that with experience of actually trading capital, and making wins and losses.

I love to educate traders from new to old at C Squared Training, so come on by, read my blogs, post on the forums, and learn how to learn and earn at the same time. Education is always the key to furthering your success with trading and investing whether it is with INO or another affiliate.

I hope this has helped and please stop by and see how live SKYPE training, education, and hands on experience with the market could literally improve your standard of living by a mile!

Regards,

Ben Brinneman