Trading Guidelines

 

  1. Trending

a)      Is it in the top part of trend line= sell

b)      Bottom part of trend line=buy

  1. Support and Resistance

a)      Just above resistance=Buy

b)      Just below support=sell

  1. Bollinger Bands

a)      Bouncing off top line=sell

b)      Bouncing off bottom line =buy

c)      Lines are squeezing(decrease in price volatility)=big move on the way(up or down)

d)      Walking the bands=trend will continue for some time

e)      Price breaks outside the bands= reversal

  1. Stochastic Oscillators

a)      Overbought

b)      Oversold

  1. Moving Avg.

a)      20 MA line crossing 50 MA=confirms a trend reversal

1)      Bullish crossover=shorter length MA crosses above longer MA

2)      Bearish crossover= length MA crosses under longer MA

b)      price crossing over 200MA is major trend reversal. 

c)      Price crossing over 20MA, 50MA or 200MA could be a buy\sell point

  1. MACD
  2. RSI

a)      Overbought=over 70

1)      Sell if price falling below 70

b)      Oversold= under 30

1)      Buy if price rising above 30

  1. Check the charts for long term(6 Month) and short( week).
  2. Is the general market trending upward?
  3. What is on the economic calendar for the day and week?
  4. Anything political going on?