Technical Analysis SAmple InveSTIng plans 1

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Evan Elliott
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1 Technical Analysis Sample Investing Plans 1

2 Important Information All investing plans and rules are provided for informational purposes only, and should not be considered a recommendation of any security, strategy or specific portfolio allocation. Investing plans and rules are provided for students to better understand how they may build their own plan that may best fit their own personal investing style. Carefully consider investment objectives, risks and expenses before investing. Neither Investools Inc. nor any of its officers, employees, representatives, agents, or independent contractors are, in such capacities, licensed financial advisors, registered investment advisers, or registered broker-dealers. Investools Inc. does not provide investment or financial advice or make investment recommendations, nor is it in the business of transacting trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client s situation. Nothing contained in this communication constitutes a solicitation, recommendation, promotion, endorsement, or offer by Investools Inc. of any particular security, transaction, or investment. Trading securities can involve high risk and the loss of any funds invested. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. The papermoney software application is for educational purposes only. Successful virtual trading during a one-time period does not guarantee successful investing of actual funds during a later time period market conditions change constantly. thinkscript and Condition Wizard are functions of papermoney that may allow Investools students to automate some of their hypothetical investing activities, but does not relieve investors from the responsibility of making their own investing decisions TD Ameritrade IP Company, Inc. All rights reserved. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law. 2

3 Bullish Gap Investing Plan Technical Analysis Objective To identify and enter on strong bullish momentum that creates a full gap on daily price bars. While effective for trend trading moves, this can also be implemented for swing trading purposes. Watch List Criteria Breakaway Gap Sideways short-term/intermediate-term trend Run Away Gap Uptrend Entry Rules Once a full gap is on the chart, there are three possible entries: 1. Close of Day Entry: Large bullish candle 2. Intra-day Entry: 5-minute candle close above the high of the first half hour of trading 3. After the Gap Day: Daily candle close above the high of the gap day Money Management Position Size Up to 2% of portfolio risk per trade Exit Rules Stop Loss Initial stop loss = 1%-3% below support Swing Trade Target price Trend trade Measuring gap target price 3

4 Adjust stop per trend trading rules 3% below intermediate-term support Routines New Entries Watch for earnings announcements Review chart toppers Existing Positions Swing Trades: Monitor daily for exits Trend Trades: Monitor daily for opportunities to move stops higher 4

5 Bearish Gap Investing Plan Technical Analysis Objective To identify and enter on strong bearish momentum that creates a full gap on daily price bars. While effective for trend trading moves, this can also be implemented for swing trading purposes. Watch List Criteria Breakaway Gap Sideways short-term/intermediate-term trend Run Away Gap Downtrend Entry Rules Once a full gap is on the chart, there are three possible entries: Close of Day Entry: Large bearish candle Intra-day Entry: 5-minute candle close below the low of the first half hour of trading After the Gap Day: Daily candle close below the low of the gap day Money Management Position Size Up to 2% of portfolio risk per trade Exit Rules Stop Loss Initial stop loss = 1%-3% above resistance Swing Trade Target price Trend trade Measuring gap target price 5

6 Adjust stop per trend trading rules 3% above intermediate-term resistance Routines New Entries Watch for earnings announcements Review chart toppers Existing Positions Swing Trades: Monitor daily for exits Trend Trades: Monitor daily for opportunities to move stops lower 6

7 One Green Arrow Investing Plan Technical Analysis Objective To create trend trading systems to identify and enter at the beginning of an intermediateterm bullish market move. This papermoney trading system emphasizes the importance of discipline and routines. Watch List Criteria Market Posture Bullish market posture confirmed with the Market Forecast intermediate-term (green) line going up or in the upper-reversal zone Fundamental Criteria Run a Global Search with the following criteria: Number of Good Phase 1 Indicators Min = 5 F/E Score Min = 3.25 Price Pattern Score Min = 2.75 Volatility Score Min = 2.00 Entry Rules 30-Day SMA Enter when stock closes above the 30-day SMA Money Management Position Size Up to 2% of portfolio risk per trade Exit Rules Stop Loss Trail stop 3% below 30-day SMA and adjust daily 7

8 Routines Daily Monitor Technicals page on Portfolio tab for a green 1 in the 30-Day MA Breakout column Move stops higher Monthly or Quarterly Re-run search to add new stocks 8

9 Price Patterns Bull Flags Investing Plan Technical Analysis Objective To identify and trade consolidations of a trending market. Take advantage of short-term momentum by entering near support and exiting at a swing target. Watch List Criteria Trend Uptrending Stock Fundamental Criteria Run a Global Search with the Following Criteria: Number of Good Phase 1 Indicators Min = 5 F/E Score Min = 3.25 Price Pattern Score Min = 2.75 Entry Rules Support Bounce Close above the high of the low day Pattern Breakout Close above the resistance line of the pattern Money Management Position Size Up to 2% of portfolio risk per trade Exit Rules Stop Loss Initial stop loss: 2% below support 9 Target Price Found by either the previous move or with Fibonacci extensions Adjust stop up to 1% below the low of the previous after 80% of the move has occurred

10 Routines Daily Monitor open positions for exit or stop adjustment Monitor watch list for entry signals 10

11 10/40 Crossover Investing Plan Technical Analysis Objective To identify changes in the intermediate-term trend. Potential long-term trend trading system. Watch List Criteria Liquid ETFs (greater than 250,000 average daily volume) 2-year chart, weekly bars 10-period EMA 40-period EMA Entry Rules Bullish Crossover 10-period crosses above 40 period; confirmed if lines continue to diverge on 3rd weekly candle after cross Bearish Crossover 10-period crosses below 40 period; confirmed if lines continue to diverge on 3rd weekly candle after cross Money Management Position Size Up to 2% of portfolio risk per trade Exit Rules Stop Loss Stop loss 3% below support on weekly bars Routines Weekly Monitor for crosses 11

Forex Trading SAMPLE INVESTING PLANS

Forex Trading SAMPLE INVESTING PLANS 1 Important Information All investing plans and rules are provided for informational purposes only, and should not be considered a recommendation of any security, strategy