• Our swing style of trading is to actively manage open positions by moving stops as you would if you where day trading, by protecting gains along the way. We believe the best way to beat the market is to keep our losses small and to stay in a trade until our stops take us out.

• Our stock selections are ready to move immediately after posting so we expect a quick move in our direction (within 3 days). We rarely stay in a trade longer than two weeks.

• We post our entry and stop prices so you don't have to sit in front of your screen and watch the market all day. You can simply follow our trades and place limit orders with your broker at the trigger price, check in the evening and set additional buy limit orders and stop loss orders on positions that were filled during the day.

Good Money Management

• Good money management is the key to your success, Do not underestimate its importance. The first and most important rule is NEVER put all of your money in one position.   We believe holding 5 positions in a portfolio is the right balance. Rule number two is always set stops.  There are two additional simple and proven ways of managing your trading capital.

1). Limit the dollar amount you invest in each position. Simply divide your capital by 5 or what ever number of positions you are comfortable holding. This is the total dollar amount you will invest in any position.

2). Limit the dollar amount of the total portfolio you put at risk.

How to determine the size of your position based on the dollar amount you are willing to put at risk?

• Position size based on a 2% stop loss

First you need to determine how much of your trading capital you are willing to put at risk. In our trading plan we never want to risk more than 2% of our total equity.

Assume you have a $30,000 account, 2% of $30,000 is $600. So, if the stop is hit, the position size needs to be such that the total loss is no greater than $600.

Example: You have a $20 stock, and you have a $30,000 account, here is how you can determine how many shares you should trade of this particular security.

First figure out your stop-loss point (we do this for you on our weekly selections). Let’s assume that the stop-loss is at $19. To figure out the number of shares you can purchase, simply divide the amount you are willing to risk ($600) by the amount of points your stop-loss is from your entry price. The entry price is $20 and the stop loss is $19, so the difference between the two is $1. Now divide $600 by $1 = 600 shares. That would give you a total investment of $12,000. The 600 shares times $20.00 ea. = $12,000.

You can buy 600 shares, if you get stopped out at $19, your loss will be no more than 2% of your total portfolio value.

Based on our trading plan, we want to divide our capital in to 5 positions so if the cost of 600 shares is more than our allocation for 1 position, we can only buy the number of shares allowed by our allocation. Based on a $30,000 portfolio $30,000 divided by 5 = $6,000. So instead of 600 shares you can only buy 300 shares. Take $6,000 divided by $20 = 300 shares. This will protect you from putting all your eggs in one basket and will also reduce your maximum loss potential.