Trader s Guide. Updated March 2014

Transcription

1 Trader s Guide Updated March 2014 Welcome to this basic introduction to the Trigger Trade Report, FTMDaily s unique stock trading system. This simple guide will explain how to get started using our trading system and will also provide you with answers to some our most frequently asked questions. Let s get started! 1

2 What is Trigger Trading? The Trigger Trade Report is a momentum-based trading system that offers low-risk stock trading setups. Through a handful of proprietary technical indicators, we are able to accurately identify potential entry and exit prices. The Trigger Trade stock trading system was created by veteran stock trader, Jerry Robinson. One thing you should know about the Trigger Trade system is that it is highly conservative. (We hate to lose money on a bad trade!) Therefore, you will notice that we set all of our stop orders at 8% or less. Our goal is to consistently generate returns of 1%- 5% per trade. The typical holding period for each trade can range anywhere from 5 hours to 15 weeks. How it Works As an FTM Insider, you will be given access to one daily stock trading idea every morning before the U.S. stock market opens. Each stock trading idea comes complete with: 1) The stock s Trigger price (this is the BUY price) 2) A stop loss price 3) A potential exit target 4) Jerry Robinson s commentary on the stock 5) Daily status updates of our trading activity To view the daily trading idea, simply go to FTMDaily.com and log-in to your FTM Insider account. As soon as you log-in you will be able to see the FTM Insider Menu. 2

3 Simply click on the Trigger Trade Report link on the FTM Insider Menu. (See below.) After clicking on the Trigger Trade Report link, you will be taken to our official Trading Room. Every day, our Trading Room is updated with a new stock trading idea. Below is an example. Let s break down the above information 3

4 Date: This is the date that the trading idea was listed in the Trading Room. The trading idea will expire 10 business days from this date if it fails to reach its Trigger Price. Ticker: This is the stock s ticker symbol. You can click the ticker to see real-time stock information courtesy of Yahoo Finance. Trigger Price: This is the BUY price. When the stock reaches the Trigger price, we buy! (Inversely, if the stock fails to reach its Trigger price, we do not buy.) However, there is one important rule that you should know about the Trigger price. Trigger Trade Rule #1: IGNORE any and all triggers that occur within the first 30 minutes of the market s open. Stop Loss: This is the price at which we set our stop loss order immediately after buying the stock. As our gains begin to increase on a trade, we will often raise our stop loss price to lock in those gains. You can always find the most up-todate stop loss price for the stock in this field. (Note: By placing this immediate stop loss order, we are able to protect against a sudden steep downturn in the stock price. We NEVER trade without using stop loss orders.) Trigger Trade Rule #2: ALWAYS place a stop loss order immediately after placing a new trade. Status: If the stock triggers, this field will contain the purchase date. We will also list the sell date in this field once we sell the stock. If the stock has not yet reached its Trigger price, this field will simply say: AWAITING TRIGGER. If the stock fails to reach its Trigger price in the first 10 trading sessions, this field will show that the trading idea has expired. Performance: When a stock triggers, it becomes IN PLAY. When we sell the stock, this field will specify our gain or loss percentage. If a stock fails to reach its Trigger Price in 10 trading sessions, the trading idea will expire and this field will simply say: TRADE EXPIRED. 4

5 Comments: Each one of our daily stock trading ideas is personally handpicked by Jerry Robinson and comes with his brief commentary on the stock. These comments will typically provide some basic background on the stock along with the potential profit from the trade. Trigger Trading System: Under the Hood While all of our subscribers enjoy receiving and profiting from our daily trading ideas, some of our more technically-minded subscribers are interested in exactly how our trading system identifies and selects stocks. So in this section, we will briefly introduce you to the mechanics of our trading system. In the nearby image you can see an example of the technical data that our Trigger Trading system measures on a daily basis on thousands of U.S. stocks. Now, let s go through each of the three steps found in this chart. Step #1: Wait for the Tripwire. Our system automatically ignores all stocks that have not dipped into the GREEN zone, also known as the Tripwire area. Once a stock trips by moving down into the GREEN zone, it instantly comes onto our radar for closer 5

6 examination. We never trade a stock that has not first dipped down into the GREEN zone of the Tripwire. Step #2: Wait for the Trigger. After the stock has tripped, our system then waits for the stock to move above the RED Trigger line. As soon as this occurs, the stock technically triggers. However, there are still two confirmations that we check before making the trade. Step#3: Confirm the Trigger and Buy the Stock. Before the trigger is considered valid, it must first be confirmed. Confirmation #1: This must be in the GREEN zone when the stock triggers. If it is in the RED zone, the Trigger is not considered valid. (This confirmation is one of the most important to succeed with our system.) Confirmation #2: The second confirmation should be above the zero line when buying the stock. As you can see, our trading system is fairly simple. However, a failure to follow the system according to our specifications may result in a failed trade. If you have any further questions about how the Trigger Trade system works, or specific questions about the technical indicators that we use, contact us by or by phone. Note: We are currently investigating the possibility of converting our entire Trigger Trade system into a web-based software, which would give our subscribers the ability to look up any stock using our proprietary indicators. While this would be a great solution, it will involve a major investment of time and finances on our part. We ll keep you posted on the progress. Our Two Important Trading Rules While Trigger Trading is fairly straightforward, we do have two important trading rules that we consider vital for all traders who choose to use our system. The first rule is a NEVER and the second rule is an ALWAYS. 6

7 TRIGGER TRADING RULE #1 NEVER buy a stock in the first 30 minutes of the market s open. (We ignore any and all triggers that occur within the first 30 minutes of the trading day.) TRIGGER TRADING RULE #2 ALWAYS place a stop loss order immediately after placing a new trade. (This is vital to managing your trading risks.) Now, it s time for our final section where we will answer some frequently asked questions about the Trigger Trading system. Frequently Asked Questions 1. Can I get text alerts when one of your stock trading ideas reaches its trigger price? YES. Nearly all online brokerages offer free text and alerts for stocks and they are very easy to use. However, if your particular online broker does not offer free text or stock alerts, you can use a free stock text alert service like Zignals.com. Many of our subscribers have told us that the Zignals free stock text alert service works perfectly with the Trigger Trading system. 2. Do I have to sit in front of a computer all day watching my stock to be successful with this trading system? NO. Once you buy a stock, we advise that you immediately set a stop loss order to limit potential losses. (We provide a stop loss price with each trading idea.) After that, you will probably want to monitor your stocks a few times a day. Many of our subscribers follow their stocks on their smartphones or on some other mobile device. Also be sure to read our daily trading status updates, which are updated every weekday evening. These status updates often contain important information regarding our plans to sell our holdings or to change a stop loss order. 3. How much money should I put into each trade? The answer to that question depends upon your amount of trading capital. Always remember that FTMDaily.com is not a financial advisory firm. We cannot legally tell you how to invest your money as that would be highly unethical. 7

8 However, we can tell you that most of our subscribers who report the best success trade a minimum of 100 shares of stock. But everyone s situation is different. 4. Do you recommend that I start by paper trading? YES. Before you begin trading real money with our system, we strongly recommend that you get comfortable with our trading style by paper trading. That is, pretend you are buying the stock and see how it performs. After a couple of weeks of paper trading, most of our subscribers are confident enough to begin using real money in their trading accounts. One free paper trading service that we have heard good things about from our subscribers is offered by trademonster. Their free service provides you with $100,000 in imaginary capital and keeps track of your gains and losses as you place imaginary trades. You can learn more about this free paper trading service here. 5. Why do you recommend never trading during the first 30 of the trading session? The first 30 minutes of trading is often needlessly chaotic. It is a time when yesterday s buyers are trying to close out positions and new buyers are trying to take new positions in the market. While there is no doubt that this can be an exciting trading time -- and a great time to sell a position -- it is also a time of general confusion. Gains and losses during the first 30 minutes of the market s open are difficult to learn from because they occur so randomly. After years of trading, I just prefer to wait out the early chaos and enter once the market has smoothed out. As such, I ignore all triggers within the first 30 minutes of the trading session. 6. How do I know when to sell a stock? Our daily status updates will alert you to when we plan to sell a stock in order to lock in gains or to cut our losses. You can also look at the Commentary field for our exit target. 8

9 7. Which indicators do you use to determine the Trigger? Our Tripwire is a proprietary version of the Stochastics oscillator. Our Trigger price is a proprietary version of the Moving Average Convergence Divergence indicator, also known as the MACD. 8. Is the trigger price the same as the buy price? YES. The trigger price is the BUY price. When the stock reaches the trigger price, we buy it. If the stock doesn t reach the Trigger price, we don t buy. It s really that simple. 9. When is the best time of day to sell a stock? After trading stocks for over 16 years, I have found the very best time to sell a stock usually occurs in the first 30 minutes or the last 30 minutes of the trading session. ### 9