DJIM #38 2007

The past week started with some promising setups and ended with some lackluster action.   Perhaps, many participants are looking forward to next week as the tone will be definitely set by the end of next week.   As the credit crunch crisis is winding down, many of us are going to be looking at the economic side of things to wage big bets.     There's still over three months left in the year and to many, this is the make it or break it kind of period.     Everyone fared the summer trading a little different, some did ok and some didn't do so well.   Well, all eyes and mindset are focused on the next three months.   Historically, last three months of the year produced good results for us, going back as far as we can remember.  This isn't just a coincidence since same could be said for most market participants.    Companies tend to forecast rosy growth number and institutions tend to mark up their favourite stocks to boost their overall performance in the winter.   That is a powerful combination that can benefit the retail traders immensely.     This is an overall picture that we have to keep in mind.

When you get down to the actual business of picking individual stocks and trade, you still have to stick to the strategy you've seen the most success with.    For us, the same strategy we've been using along with the appropriate level of caution we've been implementing have gotten us through a pretty good year, so far.   Here's a few pointers we like to share with everyone.

1. Stick with winners!  The ones with strong breakout that are hitting 52 week high should be the first ones on our trading list.

2. Trade with volume, the ones that breakout with above average volume are the easier ones to trade and have a better probability of follow through.   We have seen many failed breakouts that looked like results of well orchestrated trap by hedge funds.

3. Cut down on unnecessary speculations, if you aren't sure with the setups or not familiar with the setups, there's no need to play if aren't confident to handle it decisively.

4. No need to speculate on earnings, and unless you are trading on insider info, you just don't have the edge.

5. Cut the loss quickly, as a professional trader, we not only take losses frequently but we also accept it as a fact of trader's life.   

6. Go for the most obvious setups, the most probable setups, that's how you grind through a tough market.  Use the charts of our most recent plays provided to possibly guide you,  read the intro in the section.  This weekend edition provided by Blacktruck consists of BCSI CROX CUB DRYS EJ EXM GLDN GRMN ISRG JASO LDK MR ROS VMW WX

7. Get to know DJIM traders' trading style.    The better you know how we think and how we operate, the better you understand how other professional traders handle a particular situation.    Believe it or not, we know many of our members' trading style really well just by reading their posts from time to time.    Bottom line, trading is much like a sport where you got to know your competitors well, and use it to your advantage.

We've written many journals up until now and pretty much all of the points above were covered in one form or another in our past journals.   It's definitely a good idea to review some topics we've covered in the past to improve your own game.    We can't continuosly update our trading methodology as we attract new members, some research on your part of past journals would greatly help your understanding of what goes on at DJIM.  A search feature is available to get you started.