Trading Rules

1 - Buy only stocks making new 52 week highs (buy the day the stock makes the new high in order to avoid price gaps) 2 - Focus on Small Cap (300 million to 2 Billion) Mid Cap stocks (2billion to 10 billion) since they have more opportunity for growth. Movement in these types of stocks vary between 25% to 150% 3 - Never buy stocks that have risen based on news and more important, do not buy stocks that gap 10% or more 4 - Look for trends using a 25 DMA and a 350 DMA. If the 25DMA is above the 350 DMA buy long; if the 25DMA is below the 350 DMA sell short (use a 10% trailing stop on both directions) 5 - Buy stocks that have a relative strength of 70% or lower 6 - Buy stocks that have institutional acceptance (keep an eye on stocks that are “over owned” usually 65% or more) 7 - Look for stocks that show and increase in daily trading volume. These stocks are more likely to move in price rapidly 8 - Set up a 15% trailing stops on all new orders 9 - Divide your capital equally among positions and do not risk more than 2% of your capital in any position 10 - Do not own more than one stock per sector, this will allow you to maximize positions across different markets and leverage your risk