The Wealthy Trader

Welcome, and congratulations on taking the first step and investing in yourself!

Lessons

Lesson 1

Market Orders and Moving Averages

Stop and Limit Orders are necessary! We are going to discuss the 4 common order types and how they can be used.

Lesson 2

What Are Moving Averages?

A moving average is the average price of a security over a set amount of time. By plotting a security’s average price, the price movement is smoothed out. Once the day-to-day fluctuations are removed, traders are better able to identify the true trend and increase the probability that it will work in their favor.

Lesson 3

VOLUME IS EVERYTHING!

Lesson 4

How To Identify Buy Points

We are going to look at chart examples and identify the buy point in each.

Lesson 5

Fundamental Requirements

  • EPS Growth of 50% current year & sales growth 20% current year
  • Return on Equity (ROE) 15%
  • Top Quartile Sector
  • Disruptive Technology or Product

Lesson 6

Set Up Growth Stock Scans

Lesson 7

Trader's Psychology

  • Write down your Trader’s Plan
  • Make Trading as mechanical as possible

Lesson 8

20 DMA Bounce

  • Initiate position within 3% above 20 DMA.
  • Take quick profits 7-15%.
  • Sell when breaks below.

Lesson 9

50 DMA Crash

  • Sell entire position when breaks below this line.
  • If you have a profit cushion you can wait to see if stock closes above MA by end of week.

Lesson 10

Character Change

  • If stock has nice, smooth uptrend then starts to have wide and loose weeks…take some profits.
  • If stock has wide and loose pattern then starts to tighten up…pay attention for breakout.

Lesson 11

Cup with Handle Pattern

  • 7 week minimum. Cup shouldn’t be deeper than 30% (but bad market conditions can make them deeper).
  • Handle should be 7-10% correction. Initiate position as breaks above left end of handle in above average market.

Lesson 12

Flat Base Consolidation

  • Will last 5-10 weeks. Pattern doesn’t correct more than 15%.
  • Should  be smooth, sideways pause. Ideally, most of consolidation should be above 50 DMA.
  • Initiate position as breaks above left high of the pattern in above average volume.

Lesson 13

Long Consolidation

  • Nine month minimum.
  • Initiate position as breaks above left high of the pattern in above average volume.

Lesson 14

Weekly Upside Consolidation

  • Must have prior downtrend.  Current weekly chart must undercut prior week’s low and finish above close of prior week in above average in above average volume.
  • Initiate position Monday at open to make sure pattern is complete.  Put stops 1% below week of upside reversal.
  • Be conscious of 20 or 50 DMA as stock might meet resistance.

Lesson 15

Sell into Strength

  • Sell entire position at 20% gain.
  • Sell half position at 15% gain and remaining half when stock creates a sell signal (like break 50 DMA) or has character change.

Lesson 16

Best Practices

Discuss weekly routine.

Lesson 17

Bringing It All Together

  • Sell entire position at 20% gain.
  • Sell half position at 15% gain and remaining half when stock creates a sell signal (like break 50 DMA) or has character change.