T-Waves view Patience and discipline.
Wait for the trade come to you. The idea is to make money consistently because you are patient and disciplined and don't over-trade. Protect your assets and trade only when the odds are in your favor. Trade when a situation is a high-percentage situation and back away from all other trades. WAIT FOR THE STOCK TO COME TO YOU !! There is no need to over-trade. Every trade costs commissions, and losses can add up dramatically. A few profitable quality trades brings profits you need with low volatility for your account. This rule is used in both trading styles.
1. Patience and discipline **Bears repeating**
2. Capital Preservation (Limit losses), Always take a loss quickly and hopefully mitigate your losses, do not become emotionally attached to a stock.
3. Do not trade if your head is not in the game!
4. Observe the buy limit.
5. Don't buy gap openings that pass the buy limit.
6. Use stop loss orders. A primary ingredient for successful money management
7. Always follow a position up with a trailing stop.
8. Never EVER let a winner become a loser.
9. Utilize the concept of scaling into/or average, into and out of positions.
10. Develop a money management strategy that fits your risk tolerance and account.
Buy Limits
Nothing goes straight up or straight down. If a stock passes the recommended buy limit, don't chase it. If you miss a trade, there is always another coming right up. Often times it will come back and give you a second chance to enter. Chasing stocks up destroys the risk/reward ratio and can leave you holding the bag. Trading Gap Openings: A gap is created when the opening price is higher than the closing price on the previous day. If you are looking to buy a stock on the open and it gaps past the buy limit, be patient and wait for a pullback to enter. Gap openings are most often traps and patience will provide a far superior entry for a long position.
Stop Loss Orders:
We suggest that on most of your positions you employ a stop-loss or buy-loss. Anyone can make a wrong selection in the stock market. When this happens, it is important to adopt a defensive posture: sell (or cover) for a loss. Remember that no one establishes a position to lose money; preservation of capital is paramount. The best stop orders are mental. A hard stop (a stop limit or stop market order that you place in your trading account) resting in the market is visible to specialists and market makers and is likely to be triggered. If you can't watch your positions a hard stop is better than no stop, but in volatile issues you can have unpleasant results using hard stops. Use common sense on determining stops for your positions. We almost always suggest a stop. If your entry price is substantially higher or lower than the price at the time of recommendation you should adjust your stop accordingly. We use wide stops on volatile stocks; this is because frequently traders will stop out only to have the recommendation go up without them. Common sense is a big help here; if the stop is past your pain threshold, try a smaller position to reduce your risk.
Using Trailing Stops
Protect your profits. Plain and simple. As a position moves in your favor raise your stop to lock in profits. Many stocks that are the most profitable to trade move through extreme ranges. In some cases a trailing stop based on percentage may be more useful or use a trailing stop based on points. NEVER LET A WINNER BECOME A LOSER. Use your cost as a stop once a position moves in your favor. Remember you can always re-establish a position in a stock. Be prepared to exit positions that continue to fail at key resistance and support points. If a stock loses momentum, before it reaches our target we may close the position to secure a profit before it vanishes.
Alerts
T-Waves is dedicated to closing the communication loop on each recommendation. We have a comprehensive alert system that enables us to make you aware of changes to our recommendations. Alerts inform you when it is time to adjust your stop, take profits or make changes to your position. Many of these alerts will be included in the Evening Recaps
Best of Luck
Steve
AI
