Trading Basics – A Must Read For ALL TRADERS
In order to keep trading as simple and profitable as possible, you must have the proper trading tools in place and understand how to use everything before you actually start trading with real money. There are numerous brokers and trading platforms available and I am only mentioning the ones I like and use myself as they work extremely well for me.
Not every broker will have what you are looking for so follow my guidelines below. Also, not every trading platform will do what you need. So again, read through this info even if you believe you are already setup properly.
What I Trade – Investment Vehicles
While there are thousands of different investment vehicles using ETF’s, stocks, options, and futures contracts, I focus on a small selection which consistently generate high probability trades with exceptional risk/reward levels.
I focus primarily on Gold and the SP500 using their related investment vehicles (ETF’s, Futures contracts and CFD’s). My trading strategy works well with all of these vehicles allowing you to trade the vehicle you are most comfortable with. As you gain experience, though, you also have the flexibility of experimenting with the more aggressive vehicles such as futures and CFDs. For instance, if you are an ETF trader then you simply use my buy and sell signals with the ETFs I follow. If you are currently a futures or CFD trader, or want to begin trading these vehicles, then you simply use the trading information for those buy and sell signals. I have created this service to allow the majority of traders to benefit without sacrificing profits or risk.
If you have a job which requires your time during normal trading hours, futures and CFD’s will allow you to get involved with trades outside of regular trading hours. For instance, if there was a buy signal during the day and you missed it, later on that day or during the night the price could move back into a our trading price range. At that point, you could enter the trade if you were using Futures or CFDs. This second opportunity happens more often than not.
In addition to gold and the SP500, I sometimes cover silver, oil and other commodities and indexes when a low risk setup presents itself. I will also cover some sector ETFs when something looks to be setting up for a sizeable move. Trading different sectors allows us to play off the sector rotation as institutions move money from one group of stocks to another with the changing economy.
Hot commodities and sectors can be identified simply by scanning through the charts during market weakness. I look for sectors which have been basing (consolidating/moving sideways) for several weeks and holding their value while the rest of the broad market is correcting or selling down. These sectors which hold up during market weakness often outperform the rest of the market once the broad market correction has finished.
Stocks in hot sectors can definitely provide some explosive returns which is what we can do also. I like the ETFs because they carry a basket of stocks, some good, some not so good, but overall you benefit from the strength or weakness of that sector. With ETFs, it is possible to take increased position sizes without unduly increasing your risk levels. This allows us to optimize our risk / reward levels without subjecting our capital to the larger price swings that are possible with individual stocks.
How To Use My Trading Signals:
Trading is easy as I provide entry, protective stop, profit targets and exit prices for the ETF’s and futures investment vehicles.
ETF traders do have some restriction regarding when they can buy and sell. Depending on the type of broker you use, ETFs are tradable between 8am – 7pm ET. In order trade the extended hours of 8am – 7pm, a direct access broker is required. If you are not sure why type of broker you have, give them a call and see if you can trade pre/post market hours with ETFs. If you would like more info please read the section on Choosing a Broker.
Time Required to Successfully Trade with this Service
Trading can be a very time consuming job but it does not have to be. I have created a trading strategy and designed this service so that it saves you hours of daily research. Important key market information is condensed into a short daily video and intraday updates keep you in the loop with changing market prices and markets dynamics.
While you can spend the entire day in the chat room, it is not required by any means. All alerts, videos and updates are posted in the member’s area and sent to you via email to ensure you don’t miss any thing. Each week you will also get a chat room wrap-up. This is a PDF file where I take all the important chat room questions and answers and put them in one file. So, you get a concise summary of the best info delivered directly to you – ensuring you never miss key trading tips and education discussed in the chat room.
This service provides 4-10 trades per month. Most of the time I can see a possible trade setup hours and some times a couple days in advance. Therefore, you will know when to be looking for an alert from the service. As long as you have access to your emails through a computer or smart phone you can trade all the signals. Just place your order online or call your broker. You can take advantage of all the trades from just the information in the emails. But if you want to learn a lot about trading, you should view the morning videos and join me in the chat room each day between 9-11am ET.
Is Trading Experience Required?
No trading experience is required to use this service. If you are completely new, then you will have a very steep learning curve and will need to do some research on-line in order to get caught up with basic trading terminology and to learn how to place orders with your broker.
The good news about not knowing much about trading is that you will not have any bad habits. So learning how to trade properly right from the get go will save you years of frustration and lost money. Educational videos will be provided on how to read charts, find trading signals, how to manage the trade and your money etc…. these videos will teach you everything you need to know. Then you just need to gain some experience trading and that’s what this service does for you. It provides the experience, trades and education all wrapped into one.
Choosing the Right Broker:
Selecting the right broker may seem like a difficult task but if you know what you are looking for, you can easily cut through the clutter of mini franchise brokers lacking quick customer service and poor execution prices. You will also be able to avoid brokers who will not allow you to grow as a trader as you move from ETF’s Stocks Options Futures.
You must be sure the broker you select is a Direct Access Broker. Direct access means you can place your order on ECN’s (Electronic Communication Networks) and you will actually see your order live on the level 2 screen just like a market maker. In short, it makes you a market maker meaning you have full control of your trading and are competing head to head with the market, no middleman, no delayed orders and order execution at the best possible price. This also allows you to trade outside of regular market hours so you can take advantage of pre-market and after hours trading with eligible stocks, ETF’s and futures.
As a trader you will evolve over time so it is very important to keep your doors open for trading other investment instruments. If you are currently trading just stocks or ETF’s, in a few months or years you may want to start trading options, futures or currencies. So select a broker which has these available to ensure capability for your future growth. No one likes to change brokers as it’s a major pain in the butt and time consuming.
I have traded with several brokers in the past and found one broker that truly is great. I use www.InteractiveBrokers.com which not only has excellent customer service (which is a MUST for trading) but they are also a Direct Access Broker, have lighting fast executions, low trading commissions, and allow you to trade EVERYTHING from one account (stocks, ETF’s, options, futures, currencies and warrants). And to make things better, almost every trading platform can integrate Interactive Brokers into their system. This integration enables trading directly through a higher end trading platform like www.eSignal.com.
Interactive Brokers is available in many countries so virtually everyone can use them. There are some exceptions as I don’t think people in Spain can use them but all you have to do is give them a call to find out.
Also, I am an introducing broker for InteractiveBrokers as I help them get new clients. If you open an account with them you can enter my Referral Code: 57135 when signing up with them if you like and it would be greatly appreciated.
For those of you who are not a US resident, you should be able to trade CFD’s (Contract Of Difference). This is like trading futures so you will be able to trade currencies, commodities, and major stock indexes 24/7. You can now trade some individual stocks with CFD’s using 50x leverage which is exciting. The nice thing with CFD’s is that you can trade 24/7 and you get 50 – 200 times leverage making a $500 – $2500 account VERY POWERFULL. I use http://www.avafx.com/lp/?tag=GoldNOil_En_lp as my CFD broker and they have been made me some great money trading with their platform and I haven’t had any issues getting paid out. I am also an Introducing Broker for them helping to get them clients as well. The link above is my Referral tracking link. Learn about CFD’s on their website.
Choosing a Trading Platform:
I have evaluated several trading platforms over the years as there are lots of great ones out there. There is one trading platform which I really like and believe you should use also. The eSignal platform can do everything and more when it comes to charting, trading, creating and implementing automated trading strategies, and back testing.
I subscribe to the data feeds for quotes and charting on eSignal so I can trade US & Canadian Stocks/ETFs, also the feeds for trading the ES mini (SP500 Futures Contract), GC (100oz Gold), YG (33.3oz Gold) and YI (1000oz Silver).
Myself, I use eSignal and I love it. Its simple to use, looks awesome, allows me to trade directly from the charts as it communicates with my Interactive Brokers trading account and provides all the other capabilities I need and then some.
One of the nice things about using eSignal is that if you choose to use them, I can send you my eSignal Page File so your platform will automatically setup with all the charts and settings I use. This is a great bonus because then we are trading and seeing things on the same page (pardon the pun).
If eSignal is of interest to you just give Jeff Werthman a call as he can help you choose the proper software setup, data fees and also give you the Second Month of eSignal FREE if you tell them I (Chris Vermeulen from TheGoldAndOilGuy.com) referred you.
eSignal Contact for Free Month & Setup
Your Trading Computer and Internet Setup
Computers are very affordable today and seem to come with all the bells and whistles. But you must be careful what you buy. I highly recommend getting a top of the line computer.
The benefits of getting a powerful high end computer is that you can run multiple programs without worrying about your charts lagging or computer freezing. Also your computer will last several years before you need to sell it and get a new one to keep up with newer more powerful programs.
If you are in the market for a new desktop or laptop here are a few things it must have and be able to do.
1. It should have a quad-core processor as eSignal and other trading programs run much smoother with this.
2. You should have 4mb of ram minimum
3. Be sure your tower has a dual video display output or more.
4. Your laptop should have two video outputs for you to run two monitors if you travel.
5. Be sure to run Windows XP or Windows 7 because they are the most stable operating system and all trading platforms work properly on them.
6. I recommend LCD flat screen monitors as they require low energy, are easy on the eyes and you can take them with you to use with your laptop if you have a second home or want to trade while traveling.
7. Battery backup and surge protector – get a large one which can handle your computer, monitors, internet modem and wireless. You should have 10-30 minutes of battery backup time for when the power goes out so you can close out your trades and shut down your computer properly.
8. Internet connections, I use cable because it’s fast and when the power goes out cable internet still works. It’s amazing how my entire town can lose power yet I can continue trading or surfing the web because I am setup for power failures. They don’t happen often but a $150 battery back has paid for its self many times over… and who knows if the power surges would have fried my computers if I did not have the surge protectors….
If you are thinking of getting a new computer you should look at the ones provided at http://www.TradingComputers.com/. If you have seen any pictures of me on my websites then you have seen my computer setup with 6 monitors. My system was purchased from this company. I also have their high end laptop which is extremely powerful and can do everything my big tower computer can do. These computers are designed to trade and will blow the competition out of the water.
I have worked out a deal with them and if you mention my name (Chris Vermeulen) in the “special Instructions” area when ordering online or mention my name when placing an order over the phone they will give you Free Shipping so you will save $50-150.
By: Chris Vermeulen – www.FuturesTradingSinals.com