Jan

Trading Stocks and Making Money in 2010 – Happy New Year!

The New Year always gives us something to look forward to. We see it as a benchmark in time where we can anticipate the future with optimism after having reflected on the past year. It’s always a new beginning and we are confident no matter what the future holds, we can continue to thrive trading stocks and make a good living doing what we do best.

While many of the Home Run trades were a result of the real-time stock picks in the Research Lab, the Trade Plans came in with an excellent track record.

Going into the New Year, we have 5 open Trade Plans, all of which have hit Target 1. These trades carry over into 2010, and when closed will go into the final stats for December.

Lets take a look at the overall stats for 2009.

Trade Plan Statistics for 2009

(only the recent couple months details are shown – Members can see the trades and details going back a full year in the RL)

When the current plans close we will see that just over 75% of the trade plans hit Target 1 and 60% hit Target 2. We consider that quite respectable.

As our Members are aware, we have been suggesting that traders consider closing the trade and taking profits at Target 1. In some cases we suggest to sell 1/2 at target 1 and 1/2 at Target 2, however with the right circumstances and in the right environment we often hold out for Target 3. You can hear our current thoughts on trading the Plans in the Live Broadcast in the Research Lab during market hours.

So enough about the past. We are implementing some new techniques in 2010 that we think will bring our stats up the goal of 80% Target 1 winners going forward.

Let’s take a look at where we are set to start 2010 to help judge the market environment going forward.

Here’s where the SPY stands now on the 60-minute chart.

That last 60-minute bar of 2009 leads us to believe the market may drift back into the channel however we will have to see how it trades on the first days of the New Year.

This is definitely a time for being cautious. We are all aware of the problems in the real economy and we can not rule out the possibility of a rough market or a significant pullback.

We see below that the market has retraced 50% of the move from the all-time high to the March lows, and it seems to be stalling there.

While it’s difficult to see in the graphic, the move off the lows has occurred on much lower than average volume. We suspect the reasons for such a dramatic move off the lows are not because things have improved so much in the real world, but a typical snap-back reaction to the panic selling that preceded it. In other words, we are by no means expecting a new Bull market to begin from these levels.

The Research Lab is all about trading stocks short-term, daytrading and swing-trading. We can be successful and make money trading stocks in any environment, no matter what the market does.

Investing for the long term is an entirely different animal and our long-time members know that we have constantly advocated gold and silver as primary long term investments. We still do.

We do not trust the idea of buy and hold unless you are in a position where the stocks you hold have a very low cost-basis, obtained by scaling out of a winning position, taking profits in shares rather than dollars. Even then it is imperative that you maintain a stop-loss on every stock in your portfolio at all times.

Personally I feel that holding a stock overnight is risky, however in order to take advantage of the major runs that many of our picks have, it is a risk that we must take in some cases. I think a combination of daytrading and swing-trading is the way to go into the future, with an eye on the exits and stops in place at all times.

We can not rule out the possibility of a major market melt-down in 2010.

The overall economy and the global financial and economic system has never been more dysfunctional and fragile. We want to keep that in mind as we seek to minimize risk by frequently being in all cash, flat and liquid in our trading accounts.

The best trades are quick “hit and run” trades where we get in and out the same day. The real-time stock picks lists find perfect candidates on a daily basis.

We are confident that 2010 will be our best year ever in the Research Lab and we want to thank our Members for their support over the past year.

We look forward to the opportunity to serve you and will do anything we can to help you take advantage of the powerful toolset we have assembled.

Happy 2010!