Every NFL football team every year has one simple goal – win the Super Bowl.  Everything they do day in and day out is centered around achieving that goal. 

Investing in the stock market should be no different.  Your goals every month should always be the same:  

Goal #1 — Protect the value of your account
Goal #2 — How are you going to get your $500 a week. Why only $500 a week? Well those modest gains will give you the following annual returns:

  • 96% return on a $25,000 portfolio
  • 48% return on a $50,000 portfolio
  • 24% return on a $100,000 portfolio

These are the only two things that are ever on All About Trends’ mind — regardless of what’s going on in the markets, we might add. This is where our focus always is and yours should be too!

One of the ways we do this is by focusing upon “What Is The Total Value Of My Account?” Or to use an NFL football analogy, will this play result in the team gaining yardage that contributes to touchdowns that win the game for you.

Bottom line, do you have more money in your account at the end of the month than you did at the beginning of the month? That’s all that really matters. We focus upon that and that alone because at the end of the month and at the end of the year, that is how you’ll have known you are successful.

What won’t be paid attention to is how many companies do I own that are “good” companies.  It doesn’t matter how many “good players” are on an NFL team, all that matters is did those players make enough significant plays at significant moments to win the game.  No one really cares whose on the team as much as they care about whether the team won the game or not.

As far as the stock market goes, a company is only as good as its stock. If the stock is going nowhere, what’s the sense in risking our capital? It’s all about money in motion and keeping it in a positive motion.

Sure some months will be great and some months you’ll have to work as hard as you ever have just to get the 1st down. But alas, it all works out.

Are you making money in the market? If not, what are you going to do to change that?

THE FOUR-DOWN PROCESS TO GENERATE CONSISTENT PROFITS IN 2010

Just like football teams prepare for each game with a game plan, to achieve consistent gains in today’s market, you MUST have a plan and trade your plan.  This means you must know what kind of an investor you are, must have a plan, must know what to look for and how to trade it and have only one goal: to raise cash in your portfolio.   These are the elements that make for successful stock market investing.   
 
The four-down process below will help you do so with confidence and excitement knowing that following them will indeed make 2010 the year your portfolio takes off. 

FIRST DOWN: I WILL CREATE A PLAN BASED ON WHO I AM AS AN INVESTOR 
 
Before you can create a plan, you must determine what kind of investor you are. This is an absolute must!  
 
WHAT EXACTLY ARE YOU TRYING TO ACCOMPLISH WITH YOUR INVESTMENT DOLLARS? 
 
Do you have a plan?  What exactly is that plan?  The days of “buy any stock and it will go up” are long gone.  In today’s market, you MUST have a plan.  But the plan just can’t be any old plan.  It must be one that is based on who you are as an investor or trader and what you are trying to accomplish.  So who are you? 
 
Are you an investor?  
Are you a trader? 
Do you go long only? 
Do you go short only? 
Do you do a combination of long and short? 
 
These are all questions YOU have to ask yourself. YOU have to DEFINE WHO YOU ARE before YOU can develop a plan. That said, if you’re long only, then in times of downtrends, you must be prepared to sit in cash or face some difficult times with your investments.  If you’re short only, then in times of uptrends, you too will have to sit in cash or face difficulty. 
 
You’ve arrived when you get to the point where market direction doesn’t matter.  Your plan should take into account both sides of the coin.  You should no longer have to ask: 
 
Is the market going higher? 
Is the market going lower? 
 
Your answers to the above questions should be “Don’t know, don’t care, I invest in or trade what I see, not what I think, feel or fear.”  But how do you get to that point? 
 
You get there because you have a plan, are planning your investments and trading your plan.  This is done according to the kind of investor YOU CHOOSE TO BE.  The way you plan your investments and trade your plan defines the kind of investor you are. 

SECOND DOWN: I WILL TRADE WHAT I SEE, NOT WHAT I THINK, HEAR OR FEAR 
 
To be successful in today’s market, it all comes down to understanding that you MUST “Trade what you see, not what you think, hear or fear.”  This means turning off the TV and staying focused on understanding what kind of chart patterns make for successful investments and to have the confidence to pull the strings when they trigger. 
 
For us, we look at three types of chart patterns: 
 
Uptrend patterns 
Downtrend patterns  
Changes in trends patterns   
 
And that’s all we look for.  We don’t care what xyz analyst said about a stock, what Cramer had to say in last night’s Lightning Round or if we didn’t like the service we got at this company’s store.  None of that matters.  Just like good offenses are able to read the defense and develop a strategy for taking advantage of what the defense will give them, all that matters to us is what the chart is telling us and what we do as a result.  The chart patterns that lead to significant gains are the same whether you are a trader or an investor.

THIRD DOWN: I UNDERSTAND IT’S A MARKET OF STOCKS, NOT A STOCK MARKET

How do you make money consistently month over month regardless of market direction?  How do you make money being long in a down market? 

The answer is simple.  It’s a market of stocks, not a stock market.  Like we said in the first down section, market direction shouldn’t matter.  All that matters is finding stocks that have completed set-ups ideal for significant gains and doing what the chart tells you. 
 
Even in the most raging bull market, a sector or two may suddenly fall out of favor and then we’ll start seeing topping signs on the charts of the industry’s leading stocks.  This means it’s time to go short — even though the overall market is going up. 

FOURTH DOWN: BEFORE I INVEST, I KNOW MY STOP LOSS AND MY PROFIT EXIT POINT

Just like football teams know where they have to get to on the field to get the first down, we don’t invest in anything without looking at the chart and determining our stop loss and the point we will exit with a profit.  

For example, we have a simple rule:  Buy at support and take profits at resistance.  Before we make a trade, we look at the chart to ensure we are buying it at support or support is within 5-10% of our buy point.  There are patterns out there everyday that allow you to get in at the lowest point possible where your downside risk is minimal. 

We also look to see where the stock may encounter resistance and make sure we know what that point is and that it is far enough away from our buy point for us to reap a profit that makes the capital risk worthwhile.  If the stock is in new high territory, we’ll look to take profits, or a portion of our profits. 

We don’t throw a hail mary pass every time.  The key is to get the first down, then get another and then another.  That’s how to achieve consistent profits with little risk.  And you do that by knowing up front where your exit point, or yardage marker, is.

Having a plan, keeping it simple, understanding charts and using the charts to buy right and sell with a profit avoids making mistakes based on emotion, greed or misinformation.

Just like we said at the beginning of this article, it’s amazing what you can accomplish by just focusing on getting the first down — $500 a week:

Doing that will yield you the following annual returns:

  • 96% return on a $25,000 portfolio
  • 48% return on a $50,000 portfolio
  • 24% return on a $100,000 portfolio

To learn more, sign up for our free newsletter at www.allabouttrends.net and receive our free report “How To Outperform 90% Of Wall Street With Just $500 A Week.”