Its a dream for everyone to make money trading in stocks but very few master it.There are some proven paths to learning the skills and making money.Its better to study them before taking a plunge in stock trading.
TRADING RULES
Some trading rules to follow
1.Moving Average crossover
if shorter term moving average crosses above the longer term moving average on closing basis ,its buy signal
some moving averages which I like to follow are
10 day EMA/ 50 day SMA
15 day EMA/150 day SMA
10 day SMA/200 day SMA
50 day SMA/200 days SMA
to add to this and make it more robust
we can add MACD and RSI .If MACD is showing positive divergence , and RSI is above 50 but below 70 long position can be taken.
of course the general market should be in positive territory.
Sale position to be taken when the short term crosses below the long term moving average again.if the RSI goes above 70 then also profit can be taken.
Stop loss to be kept at max 1% of the capital.
2. Turtle trading rules
it basically covers 2 trading systems
system 1- 20 days to determine the high and low prices
Buy when the price exceeds the highest high of last 20 days ,provided 50 days MA is higher than 200 days MA. Vice versa for short
10 days low for exit long
system 2- 60 days to determine the high and low prices
Buy when the price exceeds the highest high of last 60 days ,provided 50 days MA is higher than 200 days MA. Vice versa for short
20 days low for exit
ATR channel breakout
7 ATR (average trading range + 350 days MA) -channel top
350 MA-3ATR- channel bottom
A long trade is entered on the open if the previous days close exceeded the top and short for vice versa
Bollinger breakout
350 days MA +/-2.5 Standard deviation .long trade entered if previous days close is above the top of the channel and vice versa.
DONCHIAN trend system
20 days breakout for entry and 10 days breakout for exit.
filter is 25 days EMA/350 DAYS MA.
STOP is 2 ATR
DUAL MOVING AVERAGE
100 days and 350 days ,long trade is entered if 100 days MA crosses over 350 days MA.
TRIPLE Moving average
150 days 250 days and 350 days
150 days crosses over 250 days and both are on the same side of 350 days ,if its higher then long trade to be entered.
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