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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Knowing How And When To Sell Part 2
    Time To Sell

    Multiple Exit Rules - Exit Strategy Part 2 by Dr. Van Tharp Trading Education Institute

    Last week we talked about how your exit strategy could be complex in nature so you can trade what is in front of you. The market changes during your trade and managing your position with aplomb requires more than one - or even just two - simple exit rules. This week we continue to delve into the topic reviewing the final six of our nine main types of exits. If you did not read the first part of the article last week click here. In that article, I covered the reasons why complexity in your exit rules can be good and I explained that I am writing from the perspective of a rules based discretionary trader.

    Reversal Right After Entry

    You have patiently waited for your entry and seemingly timed it to perfection but as soon as you enter the market reverses. There are several chart patterns that indicate that the price has reversed right after entry. These could be:

    A candlestick or bar formation.

    A candlestick or bar formation on a different time-frame chart.

    A close over a key support or resistance level.

    You may want to apply some or all of these reversal indications.

    If this happens to you, then you are faced with a decision point. Do you now exit the position, lighten the risk amount, or leave it alone and see what happens? There are possible reasons for each path so consult your objectives and know what you will do ahead of time. Also note that reversals right after entries often offer a good entry for a trade in the opposite direction of your original one.

    Knowing When To Sell

    The Trade Moves Steadily in Your Favor and Then Reverses Sometimes your trade enters a nice efficient phase where it steadily moves in your direction. Anyone can easily continue to hold a position during this kind of period but what do you do when price then reverses? Do you exit the trade immediately or do you decide to hang on until the trend re-establishes itself? Be sure to consider your objectives for the trade when you make this decision.

    Technical indicators such as Bollinger Bands and Moving Averages can serve as trailing stops to help you manage intra-trade drawdowns. As a general rule, the longer the timeframe of the indicators you use to manage intra-trade drawdowns, the larger the drawdowns will be but conversely, you will have greater chance for a larger win in the end.

    Knowing When To Sell

    Volatile Fast Move in Your Favor

    Contrary to some popular beliefs, tightening your stop is good when the market moves quickly in your direction.

    Fast moving markets can rapidly reverse and chew though the profits you have made. For this kind of move, it's best to lock profits in and wait for a re-entry. Sometimes, this means that you may miss out on a move as your position gets stopped out but more often than not it will save your skin.

    There are a few techniques you can use to retain your profits in a fast moving market.

    Tighten your stop to 0.5 - 1.5R

    Go to a lower time-frame chart to manage the trade

    Look for a chart pattern reversal

    You need to react quickly when you encounter this scenario so be sure to use a rule that is congruent with your trading style and objectives.

    Knowing When To Sell

    Volatile Fast Move Against Your Position

    One of the more uncomfortable scenarios to face is when the market moves suddenly against you.

    This can happen when there is either unexpected news, or a global macro-event, or a sudden change in supply and demand.

    If this happens, you have a couple of choices depending on your trading style and your view of the strength of the reason for the drop. You could get out immediately or you could wait and hope that the position rebounds in your favor.

    This can be a very challenging decision to make but whatever you do, keep risk management at the top of your mind. One compromise for this scenario is to move your stop up tightly below the current price. If price recovers then your position will benefit but any further losses would be strictly limited.

    Knowing When To Sell

    Price Gets Close to The Profit Target and Starts to Fall Away

    An all too common occurrence for newer traders is to have their trade move almost to the profit target, not quite hit it, and then the price falls all the way down to the stop loss.

    This can be a classic case of turning a winner into a loser. Not only does this cost the trader profits, but it can be frustrating and psychologically damaging in the long run.

    A remedy for this ill is to make sure your reward to risk ratio during a trade is never less than 1:1. Managing your exit point in this way has you effectively tightening your stop once you start getting close to your profit target.

    Chart Pattern Reversals

    Often the charts act as a window into the soul of a trade. If you see that price is about to reverse, now is the time to act to protect your profits. But some reversals are not as strong as others and you don't want to be cutting your profits short by exiting on weak signals. You will be tempted to close your trades early if you don't have this aspect of your exit strategy down pat. If you do see a reversal and you are unsure if you should close your position or not, then you can always scale out or move your stop higher.

    Knowing When To Sell

    Fundamental or Sentiment Conditions Change

    A change in the news cycle from positive to negative can be a good time to exit your position. For example, if the market was ignoring bad news and continuing to push higher, then you would continue with the trade. But if all of a sudden, the market starts selling off in reaction to new bad news, then you know that something has changed either fundamentally or sentimentally and it's time to sell.

    Similarly, there could be a macro event or other news that could drive a sudden change in the price movement. If your assessment is that this event is likely to continue influencing the market or your position, then you should also close the trade.

    Note - if you get good at executing condition change exits, they can be quite powerful - enough so that you should prioritize them over more simplistic technical exit rules.

    Making it Possible to Trade in The Moment with the Market

    By implementing a complex exit strategy with many reasons and rules for exiting a position, you will have the tools you need to trade what is in-front of you. As Michael Carr, a Market Wizard stated:

    "Don't worry about what the markets are going to do, worry about what you are going to do in response to the market."

    As you plan your exit rules, make sure they align with the objectives of your trading system and that you have them written down. Their individual use should be preplanned based on the careful identification of decision points and not merely applied on a whim.

    Adding a series of well thought out exits that cater to different conditions is one of the best ways to improve your trading strategy and portfolio performance.

    How can you add new exit rules to your trading plan so that you can trade more profitably?

    Click Here for More Financial Intelligence from Dr. Van Tharp Trading Education Institute

    Peak Performance Course for Traders and Investors

    Peak Performance Home-Study Training Course for Traders and Investors by Dr Van Tharp Trading Education Institute

    Van Tharp Institute
    Van Tharp Institute

    Van Tharp Institute
    Investing Trading Home Study Programs & Live Seminars Workshops

    Dedicated to cutting edge, high quality professional educational investing trading programs for traders and investors providing a road map for financial freedom. The finest investing trading education in the financial universe. Dr Van Tharp is one of the orginal Market Wizards, and referred to as the Traders Coach.

    Candle Charting Intensive Training

    Steve Nisons Candlestick Charting Intensive Training and Software
    for Profitably Trading Stocks Forex Futures Commodities

    Use the CandleScanner trading software to automatically scan for profitable trading setups on any timeframe. Stock forex and futures candlestick trading courses to throughly understand how to profit from candlestick chart patterns. Free newsletter and live trading webinars. Steve Nison is the authority on trading and profiting using candlesticks.

    Track n Trade Trading Software

    Track n Trade CandleStick Auto-Recognition Plug-in
    Quickly identify candlestick patterns without thinking. With Track 'n Trade, you have the ability to click, and select your favorite candle patterns, and have Track 'n Trade find, identify, and even auto-trade each signal through our famed Autopilot Trading System.

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    Apr 30 8:16 PM | Link | Comment!
  • New Battery Systems From Tesla Motors

    Electric Cars

    Electric Cars Tesla Toyota Nissan
    Hybrid Electric Cars and Buying Guide

    Tesla Unveiling Not-So-Secret Battery Systems This Week by GreenTechMedia

    We'll guess a 5-kilowatt home unit and a 200-kilowatt commercial-scale battery.

    Elon Musk Tweet - Major new Tesla product line -- not a car -- will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30

    John Paczkowski Tweet - Tesla IR on April 30 event: "We will introduce the Tesla home battery and a very large utility scale battery."

    I would suggest that Tesla has already unveiled these battery products over the last three years. Tesla already has 97 energy storage projects in motion in California in 2015 alone. Judging from the California SGIP spreadsheet, Tesla offers a 5-kilowatt residential battery that is almost always paired with a PV system. The company has been installing hundreds of these systems in some form for years.

    However, Tesla has been booking an increasing number of commercial and government energy storage jobs ranging from 100 kilowatts to 1.5 megawatts. The large systems are just as often standalone batteries as they are paired with PV. In many cases, SolarCity, the nation's largest residential solar installer and financier, is coupling Tesla's battery-based energy storage hardware with its rooftop solar systems.

    The big commercial projects appear to be a relatively new development and square with reports in Bloomberg that Wal-Mart has Tesla energy storage systems deployed at 11 California sites, along with a 1-megawatt battery at Cargill in Fresno, Calif.

    In an interview late last year, Tesla's Director of Powertrain Business Development, Mateo Jaramillo, said, "Tesla has new industrial and residential units coming out next year at compelling price points." He also said he was disappointed to hear recent reports out of Germany that dismissed batteries as too expensive. He suggested that doubters "shouldn't make that statement until they talk to us about the price of Tesla batteries. People are surprised when we have that conversation about Tesla battery prices."

    He concluded, "We see demand going non-linear as soon as we cross the commodity price line -- and sooner than most people might expect."

    Erik Fogelberg, SolarCity's VP of commercial sales and storage solutions, told us last week, "We bid energy storage at every job that has demand charges."

    Late last year, Peter Rive, the co-founder and CTO of SolarCity, said that the standard offering from SolarCity could eventually include storage. Rive added that the combination of solar and storage "won't look that much different for the customer," but that "the benefit to the customer will be that you will have a little backup power." Rive said, "One of the cool things about storage is that if you're already installing a solar system, the incremental cost of also getting a storage system installed is low." Rive sees this as being particularly true once storage systems are integrated into the same box as inverters.

    He added, "Our approach is to basically look at all the things that would make solar more valuable and invest in those things. For example, increasing the capacity value of solar through a combination of load shifting, demand response and integrated storage could dramatically increase the value of solar."

    Note that these batteries are not meant to get customers off the grid. Instead, they are intended to offer some relief from demand charges and to provide a little backup power.

    Given these signals, we expect that next week's product announcement will look a bit like this.

    Electric Cars

    Click Here to Review and Purchase Tesla Motors Electric Vehicles

    Click the Links Below to Review EV Electric Vehicle Alternative Energy Products and Services

    USA Solar Power Product & Service Suppliers

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    20KW solar system for home or business includes solar panels, inverter, battery bank, and all parts.

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    Pure Sine Inverters
    DC to AC Pure Sine Power Inverters

    12/24/36/48 Volts DC to 110/220 Volts AC
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    Power from Your Automobile or Solar System

    Solar Powered LED Street Lights

    Solar Powered LED Street Lights

    Wind Turbine Power

    Wholesale LED Light Blubs
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    Solar Power Mobile Phone Charger

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    Portable Solar Powered LED Light

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    7 Watt Portable Folding Solar Panel Charger

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    Wind Turbine Generators
    100 Watt to 10,000 Watt Wind Turbines

    Solar Water Submersible Pumps

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    Apr 28 6:58 PM | Link | Comment!
  • This Weeks Free Stock Pick - Ecommerce

    Groupon

    This Weeks Free Stock Pick - Investing in Ecommerce Earnings Growth

    Chicago-based Groupon (NASDAQ:GRPN) was a hot commodity when shares of the company hit the market several years ago. Investors flocked to this coupon company which was one of the quickest growing firms of all time, at least when you look at time to reach $1 billion in revenues. In fact, Groupon accomplished this impressive feat in just 2.25 years, beating out titans like Priceline.com, or even Amazon.

    But as the company went public, competition increased and demand for groupons began to fade. Shares of GRPN are actually down more than 70% since their IPO and founder Andrew Mason was forced out as CEO to boot.

    Promise on the Horizon?

    Yet despite these setbacks, GRPN is finally starting to look like a decent pick at these levels. The company is riding an earnings winning streak of four straight quarters, including an average surprise over this time frame of 91%.

    Analysts also seem to be a bit more bullish on the company's prospects, both in the near term and the longer term. For this quarter, four estimates have moved higher in the past week compared to zero lower, while we have not seen any downward revisions for either the current year or next year time frames.

    These recent estimates are actually looking for GRPN to get out of its money losing phase and to turn a profit this year. This is pretty incredible as 90 days ago the consensus called for full year EPS of -0.09 though the most accurate estimate is now looking for three cents per share in profit instead.

    Groupon

    Thanks to these factors, GRPN has earned itself a Zacks Rank #1 (Strong Buy) and we are looking for good things out of this company when it reports earnings on May 5th. But beyond earnings estimates, GRPN actually has a few other promising points to focus in on as well.

    Other Factors

    If the earnings estimates weren't enough for you, consider that GRPN also has 'A' Ranks for both its Growth and Momentum style scores. This puts the stock in pretty rare company, and it is especially hard to find when combined with the coveted Zacks #1 Rank.

    GRPN has these high ranks thanks to a couple of factors. For growth, GRPN's expected EPS growth easily crushes the industry average of 12.6%, while its low debt/capital level (OTCQX:ZERO) suggests great flexibility for the company. Meanwhile, for momentum, EPS estimates are surging across all time periods when compared to the industry, and this is what is driving GRPN's top rank on this front too.

    Bottom Line

    Although Groupon has faced significant trouble in the past, there is reason to believe that those issues are staying behind the company. GRPN is now riding an earnings hot streak, and analysts are starting to bump up their estimates as well.

    Take this into account with some of the impressive growth and momentum factors, and it is hard not to like GRPN right now. So though the stock is trading at a discount, earnings are right around the corner and the sale price for GRPN shares might be ending very soon.

    Profit Rocket

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    Van Tharp Institute
    Van Tharp Institute

    Van Tharp Institute
    Investing Trading Home Study Programs & Live Seminars Workshops

    Dedicated to cutting edge, high quality professional educational investing trading programs for traders and investors providing a road map for financial freedom. The finest investing trading education in the financial universe. Dr Van Tharp is one of the orginal Market Wizards, and referred to as the Traders Coach.

    Track n Trade Trading Software

    Track n Trade CandleStick Auto-Recognition Plug-in
    Quickly identify candlestick patterns without thinking. With Track 'n Trade, you have the ability to click, and select your favorite candle patterns, and have Track 'n Trade find, identify, and even auto-trade each signal through our famed Autopilot Trading System.

    Candle Charting Intensive Training

    Steve Nisons Candlestick Charting Intensive Training and Software
    for Profitably Trading Stocks Forex Futures Commodities

    Use the CandleScanner trading software to automatically scan for profitable trading setups on any timeframe. Stock forex and futures candlestick trading courses to throughly understand how to profit from candlestick chart patterns. Free newsletter and live trading webinars. Steve Nison is the authority on trading and profiting using candlesticks.

    Live Trading Seminars

    Stock Option Forex Futures Training Seminars Webinars Workshops
    Click Here For The Complete 2015 Schedule

    Professional investors traders teaching successful low-risk high-reward
    trade strategies. Power profit secrets for stocks, options, forex, futures
    investing trading success. Or avail of Home Study Courses and or
    Trading Softwares available to improve your investment returns.

    Apr 27 7:56 PM | Link | Comment!
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