STOCK MARKET STRATEGIES THAT WORK – Cash Back Forex Rebates

BEGINNINGS 1 The Big Lie 2 The Experts Failed 3 Risk Capital: The Bottom Line 4 Can You Make Money in the Market without a Computer? 9 Summary 9 Bernstein FM 1/7/02 11:04 AM Page v Copyright 2002 The McGraw-Hill Companies, Inc. Click Here for Terms of Use. 2 PLAYING THE GAME 11 A Share of What? 11 How Charts Help You Play the Game for Big Money 13 Keeping Things Simple and Effective 18 Trading on Margin 20 Buy Low and Sell High or Buy High and Sell Higher? Two Ways to Play the Game 22 Summary 24 3 THE DOS AND DON’TS OF PICKING WINNING STOCKS 27 A Few Basic Keys That Will Help You Pick Winning Stocks 27 What’s a Tech Stock? 33 What’s a Medical Stock? 34 What’s an IPO? 34 Summary 36 4 PICKING A STOCKBROKER 37 If You’re Ready to Trade 38 Why Are Commission Costs So Important? 39 Do You Need All the Free Stuff? 39 What’s the Difference? 39 Summary 41 5 TRADING THE CHEAPIES 43 Volume 44 Who Are They? 45 Number of Outstanding Shares 46 Institutional Ownership: Trading with the Gorillas 47 Insider Activity 48 Low-Priced Stocks with High Short Interest 48 Sex Appeal 49 How to Buy and Sell Stocks Under $10 50 Penny Stocks 51 Too Many Choices for One Investor! 52 Low-Priced Mutual Funds 52 Summary 53 vi STOCK MARKET STRATEGIES THAT WORK Bernstein FM 1/7/02 11:04 AM Page vi 6 THE TECHNICAL APPROACH TO STOCK MARKET STRATEGIES 55 Timing Indicators, Systems, and Methods 55 Types of Timing Indicators 57 An Examination of Basic Timing Indicators 60 Elements of an Effective Stock Trading System 82 Support and Resistance Concepts 83 The Value of Day Trading with Support and Resistance 85 Summary 87 7 DOLLAR COST AVERAGING 89 About DCA 90 How Dollar Cost Averaging Works 90 Summary 91 8 SUPPORT AND RESISTANCE: THE MAC 93 Determining Support and Resistance 95 The Moving Average Channel 95 How Support and Resistance Develop 97 Five Successive Bars 107 Exiting Positions, Right or Wrong 107 Channel Surfing 113 A Few Precautions and Suggestions 113 Summary 119 9 TWO REAL-TIME EXAMPLES 121 Doing My Homework 122 Why Fuel Cell? 123 Timing the Trade 124 Safety First 125 Another Example 126 Summary 128 10 IMPLEMENTING MARKET STRATEGIES 129 Using MOMMA 129 Dollar Cost Averaging with Mutual Fund Investments 135 A Comparison of Strategies 137 Wrap Up 140 Summary 140 CONTENTS vii Bernstein FM 1/7/02 11:04 AM Page vii 11 THE IMPORTANCE OF DISCIPLINE Maximizing Profits, Minimizing Losses, Following the Rules 141 Trading Discipline: A Working Definition 142 The Three Levels of Investing Discipline 144 Closing Out Losers 145 A Closer Look at Fear 147 Overcoming the Fear of Investing 149 A Few Closing Thoughts about Discipline 149 Conclusion 150 Summary 151 12 COMPUTERIZED TRADING SYSTEMS 153 Buy into the Myth 154 Defining the Reality 155 Let the Buyer Beware! 155 Why Test a Trading System? 156 Summary 167