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Keeping It Simpe

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25 views

Keeping It Simpe

Uploaded by

choosarang05
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Brokerage accounts: Name a few - Robinhood, Fidelity, ETrade, TD Ameritrade, Charles

Schwab, Edward Jones

Best for a new small account: Robinhood - Why? Simple layout and no trade fees
● A regular brokerage has fees between $5-$10 when buying AND selling
● Your account will dissipate with fees

Small Account - $100 to about a few thousand

● Starting small gives you the ability to learn from smaller mistakes
● Opposed to losing an entire account of thousands of dollars by starting with a lot of
capital.
● It will also help with over trading

Consistent Growth: 3-5% per week to start then move up to about 5-10% per week

Start on the conservative side. Don’t risk profits!!

Learn to lock in profits!! 90% of traders fail by not knowing when to cover profits and keep
losses at a minimum.

The majority of the market is run by emotions: greed, fear, hope are the most common

Greed - That the trend will push higher and trying to over maximize profits unrealistically.

Fear - Cutting losses too quickly

Hope - That the downtrend will come back up eventually. Yes that’s possible, however you’re
wasting time waiting for a dying trade when you could be trading something else and making
profits.

Short swing trades for busy schedules

PDT Rule - 3 day trades in a 5 day period.


Excludes holidays.

Always have a plan!!!! BEFORE INVESTING!!!!!

Once a week pick one stock you see value in and explain WHY!!

Use the format below when making call outs:


TICKER SYMBOL:
SUPPORT/RESISTANCE (MARGIN):
DESIRED ENTRY/ SELL POINT:
STOP LOSS (Cutting losses if there’s a break of pattern):
WHY IT HAS POTENTIAL:

DO NOT TRADE BASED ON OTHER PEOPLES OPINION!!!

● You want to be confident in knowing what you’re trading and how your trading
● You don’t know the other persons strategy or what account size they have
● You don’t know their advantages and disadvantages
● Keep the focus on your own growth

Indicators Ricky uses:


EMA (Exponential Moving Average) 180 day and intraday 1 day 1 min charts:

● Candles above EMA line = uptrend pattern / bullish


● Candles below = downward pattern / bearish

SMA (Simple Moving Average)

Waiting for confirmation: Wait for the ascending uptrend the EMA to point upward

Resistance is where it normally peaks


Support is where it usually bounces

RSI (Relative Strength Index):


30 or below is considered oversold - potentially good deal

70 or above is overbought - not a good deal

However, do not rely on just one indicator!!

Volume: Pump and dumps, manipulation


Spikes up in price with extreme above average volume for a few days

Weekly Percentage Growth Goal: For $100 3-5% 3% is perfectly okay! To not get
overwhelmed

3 Golden Rules:

1) Is It A Good Deal?

2) Does it offer the target potential of profit?

3) Has It Confirmed an uptrend?


Assess on the 180 day 4 hour chart: Why? To see the whole picture.

● 1 day 1 min doesn’t provide a lot of data. Can’t see overall patterns ESPECIALLY for
SWING TRADING. Which is from days to weeks.

Common ETFs Ricky Trades:


/GC - Gold goes down below SMA gets rejected by previous support = descending pattern.
Therefore JDST goes up

JDST - Bear ETF

UGAZ - Natural Gas

GUSH goes up DRIP goes down - inverse ETFs

Identifying a descending pattern is making new lower lows. New lows can act as new
resistance.

Old supports can act as new resistances

Bear ETFs go UP when the MARKET GOES DOWN


● SH - SH uses the S&P 500 as its benchmark. It aims to match the performance of that
index if it starts going down. It does this by investing in derivatives. This can include
futures contracts, swaps, and stock options.
The fund focuses on the behavior of large-cap stocks but also watches real estate investment
trusts (REITS). Keep in mind that an investment in this fund will lose money if stock prices go
up. This is a fund for the short term when you think you see a temporary decline in the market
about to happen.

● SDS -SDS is an aggressive fund that tries to achieve two times the inverse of the S&P
500. The large-cap focus and the aim of 2x the inverse of the index make SDS a higher-
risk ETF than SH (listed above).
This fund is for those who have a strong conviction that the market is going to drop. You would
be expecting to make twice as much as SH. You would also be taking on twice the risk.
This fund uses derivatives to achieve its goals. This is not a long-term play. Note the negative
returns for the year and since inception. Investors use a fund like this to take advantage of a
negative market.

● SPXU - This is the most aggressive fund on our list. It aims to achieve three times the
inverse of the performance of the S&P 500. SPXU offers the highest returns of the three
ETFs on our list, and it carries the highest risk. If the market turns against you, you could
start losing money fast.
If you get into this inverse ETF, be prepared to watch it daily and stay abreast of any news
affecting the broader market. You would use this fund to make money fast and get out at the
first sign of a market recovery. On the upside, with more than 11 million shares changing hands
every day, it is the most liquid of the four funds featured.

● RWM - This ETF is tied to the Russell 2000. You would use this ETF if you expected
small-cap stocks on the Russell index to decline in price.
The fund uses derivatives. RWM is a good example of how you can invest in a way that only
shorts one type of stock, while remaining “long”

Bull ETFs gain when the market goes Up

Bear ETFs short stocks to achieve their goals. Bear ETFs show gains when the underlying
stocks lose value. Bull ETFs use long positions and show gains when the underlying stocks
show gains.

Most bull and bear ETFs are leveraged. 2x and 3x leveraged ETFs do not guarantee a 200% or
300% return on their underlying index or asset, even though that is the goal. Also, the return is
expected on the daily return, not the annual.
3x ETFs use a variety of complex, exotic financial instruments to generate multiplicative returns,
both positive and negative. In order to obtain these returns, these ETFs creates long or short
equity positions. They invest around 80% of their assets in equity securities which will not
generate daily returns of 3x of the target index. To accomplish this, the balance of the fund
assets are invested into futures contracts, options on securities, indices and futures contracts,
equity caps, collars, and floors, swap agreements, forward contracts, and reverse repurchase
agreements.

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