The Daily Trade Portfolio - Our portfolio is a theoretical representation of a long only account. The portfolio can consist of up to ten positions of what we feel are technically attractive stocks with the potential to outperform the S&P 500.

How often do you update your trades and research?

Trades, market commentary, charts and research reports are updated each night and are available prior to the next day’s market open.

Are the trades easy to use and follow?

Our trades are very easy to use and follow. You simply log into the site daily to check the Current Trades list. This list shows trades that are opening, trades that are closing and open positions. Any trading decisions you make are handled as you normally do through an online trading service or with your broker. Once trades close they are moved to the Closed Trades Performance list for easy tracking.

How do you handle market gaps?

A gap occurs when the price of a stock moves very sharply up or down, with no trading in between. Because we rarely use market orders, we do not worry about poor fills due to large gaps in the market. In our experience, initiating positions using a variety of order types, including market on Open, Market on Close and limits, significantly reduces the impact of gaps. However, it is important to realize that despite using the order types mentioned above; occasionally you will receive a bad fill and be stopped out of the market. Accepting this reality is a necessary prerequisite for anyone considering trading.

Do you use Stop Loss Orders?

Trades posted to the website have recommended stops derived from several different methodologies. It is important to remember that the recommended stops are only recommendations and may not be suitable for all subscribers. Each subscriber should examine the merits of trades posted to the site and determine their own risk management and money management approach. WE DO NOT RECOMMEND PLACING ANY TRADE WITHOUT A STOP LOSS ORDER OR APPROPRIATE POSITION SIZING.

What type of trading orders do you use?

Market on Open (MOO)

An order specifying that a trade is to be executed at the opening of the market, or as near to the opening price as possible. It does not guarantee the trade will be executed at the listed opening price, but the trade will be executed within a range of prices, or not at all.

Market on Close (MOC)

An order specifying that a trade is to be executed at the close of the market, or as near to the closing price as possible. It does not guarantee the trade will be executed at the listed closing price, but the trade will be executed within a range of prices, or not at all.

Limit Orders

An order to buy or sell a predetermined amount of shares at a specified price or better. Limit orders also allow an investor to limit the length of time an order can be outstanding before canceled. Limit orders ensure that a person will never pay more for the stock than whatever price is set as his/her limit. Limit orders are especially useful on a low volume or highly volatile stock.

Market Orders (MKT)

An order to buy or sell a stock immediately at the best available current price. A market order guarantees execution. Traders should be wary of using market orders on stocks with a low average daily volume: in such market conditions the ask price can be a lot higher than the current market price (resulting in a large spread). In other words, you may end up paying a lot more than you originally anticipated! It is much safer to use a market order on high-volume stocks.

Stop Orders

An order to sell a stock when its price falls to a particular point, thus limiting an investor's loss (or locking in a profit). Also referred to as a stop-loss order.

Investors commonly use a stop order before leaving for holidays or entering a situation where they are unable to monitor their portfolio for an extended period of time.

Stop Limit Orders

An order to buy or sell a certain quantity of a certain security at a specified price or better, but only after a specified price has been reached. A stop-limit order is essentially a combination of a stop order and a limit order. Stop limit orders are used to buy a stock when it reaches a certain price; this allows investors to buy when the stock has upward momentum behind it.

Fill or Kill (FOK)

An order to fill a transaction immediately, in its entirety or not at all. This type of order is usually for a large quantity of stock, and must be filled in its entirety or canceled (killed).

Immediate or Cancel (IOC)

An order requiring that all or part of the order be executed immediately after it has been brought to the market. Any portions not executed immediately are automatically cancelled.

This is used for large orders where filling quickly can be difficult.

If any of your current trades are losing money, what should I do?

No investing approach, including our trades, will be correct 100% of the time. There will be times when we will be losing money either immediately or at some point during the trade. There will be times when we lose money when we close out of a trade. What is important is the cumulative effect of the completed trades compared to the overall market. The more you learn about technical trading, the more you will understand why we make the trading decisions we do. As technical traders, we only enter trades when we have the highest probability of success. This does not always mean that our trades are all profitable; but that we rely on technical evidence that weighs the result in our favor. Therefore, staying with the trade is always our approach. Successful traders take a disciplined approach to trading. Once they develop an approach they stick with it. You will most certainly end up losing money if you begin making decisions based on emotion. This is much easier said than done and many traders struggle with this. Recognizing the need for trading discipline is always the best approach.

What do I need to know about drawdowns before I begin trading?

We do not recommend placing any trade without employing appropriate money management techniques. Money Management is basically the process of analyzing the risk versus the reward for a trade – on both an individual and portfolio basis. The importance of money management can be seen through the following illustration of drawdown. Drawdown is a critical concept for traders to understand, before they place a trade.

Drawdown is simply the amount of money lost on a trade, expressed as a percentage of the total trading equity. Drawdown does not measure overall performance, just the money lost while achieving that performance. Hypothetically, if all of your trades were profitable, you would never experience a drawdown. Drawdown calculations begin as soon as there is a losing trade.

Following are some drawdown examples:

· Suppose you begin trading with an account size of $100,000. If you lose $20,000, your drawdown would be 20%. The new account equity is $80,000.

· If you subsequently make $10,000 and then lose $20,000, your new drawdown would be 30% ($80,000 + $10,000 - $20,000 = $70,000.) This is a 30% drawdown on the original equity of $100,000.

· However, if you subsequently made $40,000 after losing the initial $20,000, bringing your account equity to $120,000, and then lost an additional $30,000, your draw down would be 25%. ($120,000 - $30,000 = $90,000) This is a 25% drawdown from the new account equity high of $120,000.

The most important concept to understand about drawdowns is Drawdown Recovery and determining the percent gain required to get the account back to break even. Most traders think that if you lose 20% of your initial account equity, all you have to do is gain 20% to recoup your losses. THIS IS NOT TRUE. For example, if you start with $100,000 in account equity, and lose 10% ($10,000) you are left with $90,000. To get back to break even you would need to make a return of 11.11% (10% of $90,000 is only $9,000.) You have to make 11.11% on the $90,000 to recoup the full $10,000 loss.

All traders must understand it is extremely difficult to recover from drawdowns. This is due to the fact that as the drawdowns deepen, the recovery percentage grows. For example if you lose 50% of your account equity, you know need to make a 100% return on the remaining equity just to get back to break even.

Traders who fail to incorporate money management techniques into their trading strategies are eventually wiped out.

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Disclaimer "Teach-Talk-trade": Readers are advised that this site is issued solely for informational purposes and the education of traders and investors. Neither the information presented nor any statement or expression of opinion, or any other matter herein, directly or indirectly constitutes a representation by the publisher nor a solicitation of the purchase or sale of any securities. Neither "Teach-Talk-trade" nor Steve Karnish or Mike Rocheleau is registered as an investment advisor. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. The owner, publisher, editor and their associates are not responsible for errors and omissions. They may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. Any opinions expressed are subject to change without notice. "Teach-Talk-Trade" encourages readers and investors to supplement the information at this site with independent research and other professional advice. You can lose all or part of your initial investment. Never risk money that you can't afford to lose when trading securities.