Frequently Asked Questions
I find Stocks and ETF's that are poised to break out for substantial gains. I trade these in my own account with my own money. I invite you to subscribe and "Follow Me," to take the same trades that I'm taking. For more information on how this works click HERE. For information on how I pick stocks, click HERE.
I use a combination of Elliot Wave Theory, Fibonacci Retracements and Extensions and sophisticated ART® Applied Reality Trading ® Software to identify High Probability, High Reward trades. I've put together a whole page on this web site, and a YouTube video on how I pick stocks. To take a look, click HERE.
In the context of trading, "Risk Management" means to control losses. I "Manage Risk" in my trades by limiting the amount that I can lose on each trade. My guideline is to have no more than a possible loss of 2% of my trading account on any given trade. I also maintain a high "Win Ratio" (I win many more trades than I lose) and a high "Payout Ratio" (my winners are bigger than the losers.) All of the factors add up to my "Risk Management" strategy. To learn more, click HERE.
Yes, I do. My 3-year "Win Ratio" (winning trades to losing trades) is 65%. That means that 35% of my trades lose. While I want the highest Win Ratio possible, some losing trades are inevitable and my overall trading system produces consistent profitability. For more information, click HERE.
- I don’t tell you what to do, I invite you to follow what I am doing, to “Follow Me.” I am a trader, not a financial adviser. I don't know your financial situation or your tolerance for risk. Each person should make their own decision about trading. One of the key decisions to make is how much of your net worth to use for trading. There are several good tools to help figure this out. Here are some examples:
- CNN Money Asset Allocation Calculator
- Vanguard Funds Allocation
- Yahoo Finance Retirement Calculator
- These calculators can help you decide how much of your total net worth to trade with. Most of the tools indicate a percent of your net worth to invest "aggressively" or to put in "equities." This can be a reasonable guideline for how much to trade with.
- I think my best qualification is my consistent results. I've consistently beaten the major indexes for several years by 2-3X and better. More importantly, I do this while minimizing risk through my Risk Management Strategy. For more on my Risk Management Strategy click HERE.
- I have over 20 years of investing and trading experience and make my living trading the financial markets. I am TradersCoach.com’s “Head Coach” for their one-on-one coaching division and consult with traders all around the globe helping them achieve mastery in their trading and in reaching their financial goals. I am also an expert in Technical Analysis, Money Management, Elliott Wave Analysis and in implementing all of the TradersCoach.com software tools. In addition, I am a featured educator on Trader Kingdom, a regular presenter on TradersCoach.com webinars, and a contributing author to Bennett McDowell's newest book, Elliot Wave Techniques Simplified (available on Amazon.com.)
- Yes, my trading system is profitable in both Bull and Bear markets. The same analysis techniques apply whether a stock is going up or down.
- For more information on how I pick stocks, click HERE.
- In a Bear market (when the market is in an extended down trend) there are many stocks and ETF's that actually go up. For example, the price of Gold generally has an inverse relationship with the stock market. When stocks go up, Gold goes down and when stocks go down, Gold goes up. We can trade on the price of Gold via an ETF (Exchange Traded Fund) that you buy and sell exactly like a stock. Other ETF's and stock market sectors can go up when the stock market is going down.
- As a point of fact, the stock market usually goes down faster and more dramatically than it goes up. During these bearish periods, it is possible to increase profits substantially.
- I do not sell stocks short myself. My personal trading is in an IRA account and shorting is not allowed in tax deferred accounts for the most part.
- I do however identify stocks that are in a bearish price pattern and I trade on this pattern by buying PUT option contracts. All option analysis begins with the underlying stock or ETF.
- As part of my published stock picks, I identify some stocks that are good trades to the downside and identify sell-stop-buy price levels that can be used either to short the stock or to buy PUT option contracts.
- If you are going to Follow Me, the annual list cost of the subscription is $1524 ($127/month).
- If we use 25% as an annual return rate (that is by no means guaranteed, but I have done better than that for over 3 years) then the account size you would need to just break even would be $4800 (not including commissions or taxes.)
- But, we are not trading to break even so you would need more than that to make it worthwhile. Deciding how much to trade with is an important decision that each person has to make and there are many factors to consider.
Personally, I think at least $10,000 would be the minimum I would be comfortable with in order to make the investment in a Follow Me Trades subscription make sense.
- Absolutely! IRS rules for IRA and SEP accounts allow you to trade as much as you want. The only restriction is on what is called “Free Riding.” Free Riding is when you buy a stock with funds that have not yet settled from the sale of another stock. For a complete explanation, click HERE. Since I only take 1-2 trades per week, this is not an issue for me and shouldn’t be for those who Follow Me.
- Nearly all IRA and SEP custodians provide the ability for you to trade Stocks, ETF’s and Options in your account. If yours doesn’t, you should consider a different custodian. There are many high quality companies out there like: Charles Schwab, Vanguard, E*Trade, etc. that have great account features and low commission costs. There is no reason to be with a company that restricts you from managing your money the way you want to, in accordance with federal laws.
- For most people, yes, there can be. The main advantage to trading in an IRA or SEP account is the tax benefit. Most of my trades last from ~1 month to a few months. The profits on these trades are considered Short Term Capital Gains and are taxed at your nominal tax rate each tax year, reducing the potential compound gains.
- IRA and SEP gains are only taxed when you take a distribution from the account, at your current nominal tax rate, and you are only taxed on your “net gains.”
- Generally the answer is no. Most 401(k), 403(b) or 457 Plans are have restrictions imposed on them by the plan administrator and many of them only offer limited investment options.
- It may be possible for you to transfer some or all of your money from a 401(k), 403(b) or 457 Plan to an IRA or SEP where it would be possible to trade your money the way you want to. You have to check with your plan administrator to find out the details. They may not be very enthusiastic about you moving your money away from them—but be persistent if that is your desire—it is your money!
- IRS rules for IRA and SEP accounts allow you to trade as much as you want. The only restriction is on what is called “Free Riding.” Free Riding is when you buy a stock with funds that have not yet settled from the sale of another stock. For a complete explanation, click HERE.
- Since I only take 1-2 trades per week, this is not an issue for me and shouldn’t be for those who Follow Me.
- Any restrictions on how many trades you take are imposed by the brokerage firm, not the IRS. If your brokerage is imposing limits, find a better one! There are many high quality companies out there like: Charles Schwab, Vanguard, E*Trade, etc. have great account features and low commission costs.
- A full discussion of Options is pretty involved. I do offer a course on Options, for more information click HERE.
- A simple explanation is this: Options are contracts that give you the RIGHT but not the OBLIGATION to buy or sell a particular stock at a pre-determined price. For this right you pay a Premium.
- There are many different ways to trade Options and some of them are very complex and carry a high degree of risk.
- I use Options in my trading in the simplest possible form. I simply buy CALL options for a stock when my analysis shows the stock going up and I buy PUT options for a stock when my analysis shows the stock going down.
- My Risk Management Strategy for Options is simple, I only BUY option contracts, I never SELL them. If my Risk Management dollar amount is $2000 (E.g. 2% of a $100K trading account) then I only spend a maximum of $2,000 on the option premiums. That is the maximum amount I can lose if I am wrong and the trade fails.
- Options can actually be SAFER than buying stocks outright! If you read articles about Options you will see many warnings about the risk of Options. These warnings are true—if you are SELLING Option Contracts—in this case you have UNLIMITED RISK, a proposition that I am completely uncomfortable with.
- But, if you only BUY Puts and Calls, your risk is limited to the amount of Premium that you paid for the Option Contracts. If I only spent my 2% guideline on the Options, then that is all I can lose, period. Conversely, with the actual stock position, it is possible for the stock to “gap” well beyond your Stop Loss level and to lose more money than you had planned for.
- The BIG advantage of Options is Capital Efficiency. For $2,000 you can “control” and benefit from the price move of several hundred shares of a stock that would have cost you $20K, $30K, $40k or more to buy outright. The disadvantage of BUYING options contracts is that they have an expiration date and at that expiration date, they “expire worthless.” If your Option contract expires before the stock goes up (or down), you lose the entire value of the contract.
I typically take an average or 1-2 trades per week and publish those trades to subscribers.
- I publish new trades every Sunday for the upcoming week, and occasionally mid-week.
- If something happens that warrants a mi-week update, I’ll send it out to subscribers. Sometimes a stock that I have a position in makes a dramatic move up or down and this warrants taking some action like scaling out for profit, moving a Stop Loss level etc. When I make changes in my trades, I publish an update to subscribers. Sometimes there could be a few updates during the week, sometimes there will be none. It all depends on the market.
- That really depends on how much experience you have in placing trades in your own account.
- If you are already familiar with placing trades in your own account, you will be able to understand how to Follow Me in a few minutes – really! With each trade, I tell you the Buy price, the Initial Stop Loss and the Target price. You just look at the trade that I have published and log into your brokerage account and place the trade.
- If you are new to trading, it may take a few hours to learn how to place trades in your brokerage accounts. All brokerage firms offer in depth tutorials on how to place trades on their websites.
- With new subscriptions, I offer a free 30 minute consultation, if you would like that, to help you get up and running. Beyond that, I do offer one-on-one coaching for a fee.
- It really should only take a few minutes each week! If you spend more than 30 minutes each week—something is wrong.
- If you are spending more than 30 minutes each week, the typical reason is “FEAR.” Fear of making a mistake or of losing money. If this is the case, I recommend “paper trading” for a while before you trade real money in your account. Many brokerages offer Simulated Accounts where you can place trades and track performance etc. with simulated money. This is a great way to get started if you are new and lack confidence. Do this and build up your confidence before you trade with real money. If you have some fear or lack confidence it will cause you stress and perhaps to jump out of trades too soon.
- Also, spending too much time watching the stocks can be counter-productive. If you are looking at the stock price several times per day, it is going to drive you a little crazy. Stock prices don’t move in straight lines, they go up and down as part of a normal cycle—just like ocean waves go in and out as part of an incoming or outgoing tide—stock prices move up and down as part of an overall trend or wave. Watching and fretting over each minor move will make you lose sight of the overall trend or wave that is taking place. The result of this will be stress and perhaps closing the trade too soon—this will undermine your profitability!
- I keep my annual results updated on the Home Page if this site. I have consistently beat the major market indexes by 2-3X for several years, with minimized risk.
- I publish my actual detailed trade results for the current calendar year. You can see them HERE.
- The keys to my consistent profitability are:
- Using Strict Risk Management
- Maintaining a high Win Ratio: My 3 year average is 65%
- Maintaining a high Payout Ratio: My 3 year average is 2.5
- I have consistently beat the major market indexes by 2-3X for several years, with minimized risk.
- As traders, we take what the market brings us, we cannot make it do what we want.
- Past results cannot guarantee future results, but I am confident enough in my trading system that I am trading my stock picks in my own account with my own money and I am successful enough to make a living at it.
- I offer a free 30 minute consultation for new subscribers. Also, all brokerage firms offer in depth tutorials on how to place trades on their websites.
- For those interested, I offer ongoing coaching, beyond the initial 30 minute consultation, for a fee.
- I am successful as a trader and I make good money at it. But, I would really rather have an income stream from this website and be able to leave more of my money in my trading account and let it grow exponentially, rather than taking distributions out to live on.
- I am already doing the hard work, analyzing hundreds of charts and finding great trades, trades with a high probability of winning and a great reward-to-risk ratio for my own trading account. It just makes sense to increase my returns by offering these picks to others on a subscription basis.
- I enjoy helping others realize their financial goals and take control of their money by sharing what I am doing. I expect to get paid for my expertise, but I get satisfaction from seeing others succeed.
- And I really enjoy coaching others on trading! The financial markets are the most competitive, challenging endeavor on the planet. Being successful takes a significant investment of education and practice and years of experience. It also takes tremendous discipline. I enjoy the challenge of trading successfully and in coaching others to achieve mastery of trading and the freedom that comes with it.