Trading Trends: A Simple Approach to Capture Both Short-term and Longer-term Gains

By Dave Landry
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Disclaimer Dave Landry d/b/a Sentive Trading, LLC ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHERSLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

Who Is Dave Landry?

Active trader for 20 years President of Sentive Trading, LLC since 1995 Private Trader, Retail and Institutional Consultant Author of The Laymans Guide To Trading Stocks Not an RIA International Speaker CTA from 1995-2009 MBA BS in Computer Science Internet Commentary since 1997 Member American Association of Professional Technical Analysts
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Trading Isnt Easy

But..

Its Not Nearly As Hard As Many Try To Make It

So, When It Starts Getting Complex, Return to Price

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Why Trend Follow?

Where the money is. Even if you are a contra-trend player, you HAVE to be a trend follower for (at least!) some length of time. Otherwise, you would not get paid. So, why not be a trend follower all the time?

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All Successful Trades MUST Capture A Trend

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A Simple Approach
No indicators, other than the occasional moving average

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My Methodology
Goal Is To Capture A Short-term Gain

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My Methodology
AND To Capture A Longer-term Gain

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My Methodology
NOT a get rich quick scheme but a long-term viable

approach to the markets

There will be some losses Longer-term you will win by catching major trends

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My Methodology
Works in ALL markets

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My Methodology
Works in all time frames

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A simple approach
One should not increase, beyond what is necessary, the number of entities required to explain anything. Occams Razor Simplicity is the ultimate sophistication. Leonardo DaVinci

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It all boils down to:

Identifying trend or significant change in trend Entering that trend on a pullback Money and Position Management Psychology- Ability to execute and follow a plan

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Identifying Trend With Trend Qualifiers

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Moving Averages
Slope Daylight

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Dont forget to draw your arrows

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Uptrend
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Downtrend
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Sideways-no trend
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Basic Money Management

1. 2. 3. 4.

Risk only 1-2% per position if stopped out When gains equal initial risk, sell half and move stop to breakeven Trail stop as market moves in your favor Slowly loosen stops on sustained moves in order to ride out longer-term winners.

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ZUC

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Pullback Setups & Examples

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Persistent Pullback

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Daylight Pullback

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Weve not come to the toughest part of trading.

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You
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Trading Psychology

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Ive never met an unsuccessful paper trader

Dave Landry Il Trading Azionario Per Tutti

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The 3 Ms of Trading Psychology

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3Ms: Money Management

Money Management

Will Cure A Multitude Of Sins Will Keep You In The Game A LONG Time

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3Ms: Methodology
Methodology Market MUST Trend (duh!) Often Times There Is NOTHING To Do Skewed

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3Ms: Mind
Mind Most of hell is self created-You Know What You Are Doing Wrong You Are Going To Be Wrong A Lot. Get Used To It. You MUST Control Your Emotions Obsess BEFORE You Get Into A Trade Not Afterwards

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Plan Your Trade and Trade Your Plan

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Plan Your Trade

Stock______ Buy__ Sell Short __ Pattern __________ Entry ______ Protective Stop ________ Initial Profit Target______ Trailing Stop (how) ___________ Confirmation of Trend (or Transition) from Market______Sector_______Other stocks within sector________ How are you?any major (or not so major!) crises in your life?

Gray Area
Describe what discretionary techniques you might consider (e.g. Front running, Playing Opening Gap Reversalsentries, etc).Keep in mind that the larger the gray area the more decisions you will be faced with during the heat of battle. Items that re-occur frequently here should become part of the Plan Your Trade section.

Trade Your Plan

Actual: Entry ____ Initial Protective Stop_____ Where did you take partial profits (if offered)________ Did you honor your stop?_____ How/Where did you trail your stop? ___________

Post Mortem
Did you deviate from the plan? Was this deviation profitable? Was it following sound trading practices? How are you? 60

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The trend IS your friend

1.Seek trends and only obvious trends--Trade the best and leave the rest 2.Money management is key 3.Plan your trade and trade your plan 4.Keep it simple
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Stuff
English: www.davelandry.com Italian: www.letteradiborsa.it Newsletter (English) Trading Service

US Marketswww.davelandry.com Italian Markets-www.letteradiborsa.it

Books:

http://www.tradinglibrary.it/
www.davelandry.com/books.htm
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Contact Information
Questions:

dave@davelandry.com 1 (985) 898 4993

www.davelandry.com

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