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Gaining Confidence In Technical Trading

25 August 2008 No Comment

As a 20-something investor, my goal is to master multiple styles of investing and multiple strategies of investing. I wish to be exposed to multiple various strategies so that I can learn from a multitude of sources and hone my own investing style over time. Since, I’m a relatively new investor, I’m willing to give any strategy a shot.

If you read my blog, you know that I love finding great companies to target to build long term positions. A separate and very different strategy, trading based on technical analysis, is beginning to become a bigger part of my overall investment approach. Let me explain.

Today I had an excellent trading opportunity that would have made me a nice chunk of money. The trade was to short a company that had a big run up over the last few trading sessions. Unfortunately, my brokerage had no shares available for me to sell short. The important thing is that the trade, had it been executed like I requested, would have been profitable. This helps solidify my belief in such a trading strategy.

I have been learning a trading strategy focused on shorting micro cap and small cap companies that get “pumped up” and overbought. The tough part is taking the time to find these stocks that are poised for a sharp pullback. Since I don’t have time to search for these companies, I rely on a service called TIMAlerts. Through this service, I get alerted of potential trades of this type each day. It is amazing how often these trades are right on.

Check out the example of the trade today that I attempted to execute and what happened afterwards. Again, I made no money because there were no shares to short, but it sure boosted my confidence in this strategy.

As you can see, the alert was right on in indicated a potential pullback. TIMAlerts is a service of Tim Sykes. Tim is a personal friend and is also a very well known trader who specializes in shorting penny stocks. His portfolio is #1 in popularity and performance on Covestor and you can follow his trades daily on his blog. He’s up over 100% over the last 12 months or so (compare that to the market).

I would strongly recommend checking out TIMAlerts as the service pays for itself almost instantly. For about $1 a day, you can be alerted of awesome money making opportunities like I am. Check it out. Even if you’re nervous to pull the trigger with some of the recommended trades, at least you will be getting exposed to a new trading/investment strategy. If you’re like me, you want to learn all kinds of styles to develop a broad skill set when it comes to investing.

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