1. Always take profits, if you dont take them… 2 out of 3 times the market will take them from you.

2. See #1.

3. Never overbet on any one position

4. Trim some of a position on a 5-8% run, even if just a small trim relative to the position

5. Nobody ever sells tops consistently, stop pretending you are going to sell at the top every time.

6. Nobody ever buys at the bottoms consistently, stop trying to be a hero at the water cooler that you picked a bottom.

7. Buy good companies on strong pullbacks.

8. Dont panic when selling or buying…

9. Understand that any position you take could lose money, so control your risk and comfort ranges.

Dave Banister- Chief Strategist and Developer of the MRM crowd behavior based entry and exit trading method.

Excerpt from September 2011 “Trader Interviews” with Tim Bourquin Below: http://www.traderinterviews.com/free/2011-09-26_DaveBanister.php

Tim Bourquin: But it makes sense, I guess if 90% of all traders lose money to be on the other side of what they’re all thinking is obviously the way to make money.

Dave Banister: Yeah. You want to be on the other side of most traders that made your pivots, but you do need to have some type of formula that at least, you know, keeps you objective so that you’re trying as best as you can to keep your emotions out of the trade when you’re entering.

Tim Bourquin: How about the position sizing, how do you go about deciding what that is for own account?

Dave Banister: Well, you know, I have a pretty good sized trading account, but to be honest, I would say most of the times when I do enter a trade, I use a fairly small 10% maybe 20% of my trading capital on any one trade no matter how confident I am of the entry or the outcome. You know, one thing that traders can learn long term is that most traders have what’s called a boom and bust cycle. They can boom for quite a while and they eventually blow off their account. What you want to do is continually have your account slowly growing. You’re going to make some losses and you’re going to make some mistakes, but you want to keep those somewhat contained. End of the day, you want to see your brokerage account that you’re trading from, have your capital slowly rising like a nice staircase. You have to be willing to accept that you’re going to have some losers and be able to get back up on horse. So if you’re taking a $100,000 trading account and you’re betting $90,000 on one position, you’re not scaling in and you lose 8% you just lost 7000 bucks. You know your confidence is hit really hard and now all of a sudden your trading account is down to $93,000 and you’ve got to make back — you know, maybe a more aggressive trading get back to a hundred then you make another mistake and so forth. So, what I’ll tend to is when I go into a trade, I’ll say, listen I’m willing to deploy 10% or 15% or 20% of my total trading capital into this trade and I’m going to scale it in over my two or three-day window. I’m going to minimize my risk that way. I might make smaller percentage gains or dollar gains, but my account is steadily growing. [0:15:21] Now, if there’s a case where I’m feeling very convinced that we’re near a dramatic bottom or a major peak, there’s a good chance that what I’ll do is overweight the trade as I’m scaling in early. You know, maybe I’ll use 50% of my account. But as it reverses and I start to become profitable, I’ll be a little more quick to pull the money off the table is all.

Tim Bourquin: Are you monitoring a basket of ETFs or indexes that you’re choosing your trades from each day or will you take a look at the entire market and just see what’s moving?

Dave Banister: I look at the market. I mean this certainly applies to individuals stocks. One of my trading sites is I would say 90% of our trades are actually individual issues. When we talk about what I call active trades, those are my swing trades, 3 to 30-day type trades, I’m looking for the actual pattern in the chart, I’m looking for a combination of the fundamentals which I’ll be aware of. But I want to see where the pattern lines up as well so that we can enter that individual stock, you know, at a good, what I call a reversal point, where it could be something as simple as the stocks drop for three days in a row and we are entering into the tail end of the drop and we’re looking for it to recover at some portion of the drop. So we might make 8% or 10% or12% in a two or three-day hold period, but if you look at the 5-day window, the stock is still down 2%. But we don’t care, we made 8% because we timed our entry as the bottom was forming. So, individual stocks definitely I use quite a bit. In terms of ETFs, for the most part, I gauge that off of either silver, gold, or the S&P 500, maybe the Russell 2000 and when warranted, we prefer to use the 3X leverage ETFs to scale into a reversal trade. So if I think the S&P is topping out over a day or two between a certain point, 1195 to 1210 for example, I’m going to tell everyone that we’re going to scale into BGZ and short it in this 1195 to 1210 point range and then we’re going to hold it for the reversal.

Tim Bourquin: One of the traders I talked to a couple of weeks ago said, and I’m just getting your feedback on this, playing devil’s advocate a little bit, that reversal traders will inevitably have one or two trades a year that really hurt them because they’re playing on that reverse when it just doesn’t happen. So whereas he was saying that if you’re playing with the trend, most of the time you’re going to be safe from that. What’s your take on that?

Dave Banister: My take is that traders tend to be not patient enough. They do a couple of things wrong, they’re not patient, they feel like they always have to be in some kind of a trade. You know, they want to get that excitement. And when I was a young trader, I was the same way. I mean I would wake up every morning just chomping at the bit, just finding a trade, something to get some money into to get some action. You will learn very quickly that that’s how you blow up your account. So as you get more experienced with the market, when I put out a trade, let’s say it’s either for myself or for my subscribers, we might wait several days and very patient and wait for the right setup where I think the risk has been largely squeezed out like a lemon. You know, I want to put myself or my subscribers into a trade where the lemon of risk has been squeezed as much as I think is reasonable so that we’re coming in with a reasonable downside, maybe 3% to 5%, we’re looking at anywhere from an 8% to 20% upside and sometimes you just have to wait for that. The other thing is traders make the mistake of thinking they’re smarter than the market and, oh, I know I’m right so man, I’m taking my $100,000 and I’m popping it in, I’m going short right now, I got this man. And then the trade starts to go against them and against them for the next two days and they panic out and they lose $15,000 and now they’re down to $85,000. So the reason that often doesn’t work is people don’t wait and they’re not patient and they don’t have kind of a roadmap in advance. So let me give you an example. Last week the S&P 500 had been on what amounted to an eight-day rally. We had gone from about 1111 in the futures lows to 1231. Now, everybody was felling pretty bullish 1220 to 1230 range, but I was telling my subscribers that there was an imminent reversal so you should take some — either hedge your portfolio or begin shorting the market or take some protection. And I pointed it out in the charts and in the Fibonacci that says why we’re likely to reverse possibly have a very steep decline. So it’s funny because when I’m sending that information out and I’m forecasting it, I’m getting a fair amount of emails questioning if my head is screwed on right, “Well Dave what are you talking about, it looks like we’re going to 1250.” Well, you know, it looks like that but I don’t think it is. [0:20:39] So we will wait patiently for, you know, 100-point rally in the S&P and let it happen and then we’ll begin to short. Because then the risks are much lower and the chance for your profits are much better. So I think the key takeaway is do not plow all your money at one time, do not think you’re smarter than the market, and be very patient, have a roadmap.

Tim Bourquin: All right. Dave, you’ve been very patient with all my questions and you’ve alluded to it a couple of times. Talk about your website and what you do there.

Dave Banister: I have two websites. One is the MarketTrendForecast.com. There are quite a few subscribers and that’s growing very fast because I forecast the S&P 500, gold and silver, and once in a while a few other indices. But that seems to capture most of the trader’s interest, people that are retired, people that are active traders, they’re a wide variety. And what I try to do is pinpoint in advance for people, here’s the likely rally point for the S&P, here’s the likely bottoming point and here’s why, here’s the chart in advance. I’m going to show you what I think is going to happen and I’ll draw it out. So people kind of have, you know, what they feel is a good roadmap to go by and they know what to watch for. The other site is a little more sophisticated. It’s called ActiveTradingPartners.com. We take the person who’s graduated from, you know, the basic forecasting classes and whatnot, learning through me and they’re ready to deploy some capital with some actual trades. And we hand walk people through every trade on that site.

Tim Bourquin: All right. Well, Dave, thanks very much for your time today. I really appreciate you sharing some of your ways that you look at the market, and listeners you can find out more about Dave by clicking on the links at the bottom of the transcript for this interview. Dave, thanks for your time.

Dave Banister: All right. Thanks so much.

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Reviewing the SP 500 Action since the 1422 highs and where we are at… click the square box with the circle in it on the lower right of the video graphic box for high definition: Direct Link: CLICK HERE

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There is no better opportunity than a strong fundamentals based small cap company that is experiencing a solid pullback in stock price.  When we match up fundamentals with a “waterfall” decline, we can buy near the bottom pivots of crowd panic and then sell as the crowd comes back into the stock.  Its very common for “stop losses” to be run on the downside, triggering a cascading type short term chart pattern.  As each stop loss order triggers, it in turn triggers more of the herd to put in market sell orders in a panic, which then triggers further stop loss orders.

This creates the MRM pattern we look to buy into for the reversal.  Recent examples are QCOR that dropped from 38 to 34.80 and we alerted to buy more, its now trading at 40-41.  Another one is a  sideways crowd pattern in RENN, we bought at 5.45 as the multi week pattern ended, and a few days later the stock was trading at 6.70.

Below is a very recent sample of an actual ATP MRM trade we initiated this week in VELT.  This is a mobile advertising firm out of Europe that was pulling back in price after a strong runup.  We  loved the valuation and metrics, and we liked the pullback pattern. I alerted my partners to buy over 1-2 days and scale in to the stock.  The price went from 11.80 to 11.25 during that 24 odd hour window, and that is where we worked into our positions.  The stock then reversed to the upside a day later and we sold for 8.8% gains.

Another recent 18% gainer sample here on INVN

A classic MRM Trade…  consider joining us and trying us for 90 days with a $150 off coupon offer, and we will include TheMarketTrendForecast.com as well.  Read more and sign up here:  www.activetradingpartners.com/mrm

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In essence, my work revolves around crowd psychology or what I call “Crowd Behavior”.  If there is one thing in the stock markets that never changes, it’s how crowds react to news, events, and also how they over-react more importantly.  My MRM system helps to define where the crowd may be over-reacting on the upside and also obviously the downside of a move in a security.  Knowing roughly where that upside and downside exhaustion point may be, can obviously be a huge tool in a traders tool box.

Let’s be honest, the Holy Grail of investing and or position trading would be to buy low and sell high as often as possible with as few mistakes as possible right?  The ATP MRM crowd based timing method is what that aims to do, a lofty goal but one we feel we are achieving on a regular basis.  The major problem most investors have is selling out of a position at the extreme areas of “Pain”, where your emotions take over and you cant take the paper loss any longer and you sell.  The other issue is chasing stocks higher because the adrenaline and excitement of owning a stock that is rushing higher is too hard to pass up.

Both of those investor psychology based decisions are made in panic buy and panic sell modes.  That leads to a recipe for disaster for a trading account over time.  Instead, what we want to do is the opposite right? We want to calmly buy shares in a stock that has become oversold due to emotional responses from the crowd, and sell into a huge rally where the crowd has become overly exuberant.  What if you could do that on a regular basis all the time with cool and calm nerves of steel?

Our MRM trading system at ATP allows us as best as we can to cooly and calmly enter into oversold stocks right near the apex of the lows, and then quietly exit into the rush as the stock reverses back to the upside.

Recent examples include the ETF NUGT.  This is a 300% leveraged ETF to the Gold Stock Index.  Now we all know the Gold Stocks have been under severe pressure of late as the GDX ETF has cratered from its highs over the last many months.  My MRM system though kept us out of the gold stocks, until very recently when we saw the idea entry point for a swing.  Based on the GDX falling into the 49 and below level, my MRM targets said we were at an extreme emotional bottom using my 1 day, 3 day, and weekly crowd indicators.  We therefore entered calmly into NUGT at 15.61, and within 48 hours we saw that ETF rally to 17.81!  We sold at 16.80 and 17.10 for 1/2 and 1/2 tranches to pocket 7-10% gains inside of 2 days.   The move from 15.61 to 17.81 was a 14% move inside of 48 hours!!  We also knew to sell into that rally because just a few short days later the NUGT had fallen all the way back to 15.30 per share.  My MRM method then said 15.31 was another entry buy, and 24 hours later NUGT was up another 7%!  So in the span of 6 trading days, MRM gave out an 8.5% blended return, and then followed it up with another 7% return.  Thats 15.5% of return with low downside risk in 6 trading days on just one ETF position!

We usually apply this type of work to MRM Positions that we actually intend to position ourselves in weeks not days.  However, if we do get extreme moves in a short period of time, we always look to trim back some of those profits in the position.  The samples above are what I call “Active Trades” at my ATP service, these are intended to days not weeks in holding period.  Keep in mind alot of our work is in an Active MRM portfolio where again, we are holding swing positions for weeks and not days, so it does not require as much daily work by our partners.

Some additional recent samples include CVV which we entered twice for profits inside of a few months.  We banked 13-16% gains on one swing, waited weeks and entered again.  The stock actually dropped below our MRM entry and we held on knowing that it was likely bottoming out amidst panic emotional selling at 10.66 per share.  A few weeks later our patience paid off as the stock rose to 13.80 per share.  Most traders would have taken the loss below $11 per share, and missed the reversal back up for 25% or more.  When you take a loss that way, you must then replace that position with another trade that gains 25% or more in this case.  MRM helps to avoid panic selling, and often to take advantage of panic drops in a stock to buy more.

Consider joining us for 90 days trial period and play along.  We provide all the alerts in real time via Email and internet posting. We provide daily updates on all positions and 24/7 Email access to me for any questions.Learn more and sign up at www.activetradingpartners.com/mrm

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Here again below is another sample of a real-time ATP Alert to buy INVN stock at 15.25 in pre-market on March 7th. The stock was giving Momentum Reversal Signals over 1 day, 3 day, and weekly time bands that I incorporate.  In the rare case where all 3 time bands are giving us a reversal buy signal, we go long if we like the fundamentals of the company.

Therefore, the timing is crucial to buy during that reversal signal before all the traders jump in and push the shares higher.  Typically we are buying when everyone else is selling, so the method is counter-intuitive.

MRM stands for Momentum Reversal Method, which is basically buying low and selling high.  The timing system also gives us very good top signals so we are selling when everyone is buying, and buying when everyone is selling.

Below is this weeks MRM signal buy at ATP we used and we have an 8.5% gain same day and are long into the close on INVN.  You see, the MRM charting method also tells me price objectives in advance, allowing us to know when to take profits or to keep riding.

Consider joining us and being part of this revolutionary system for investors and traders alike.  Many of our positions we hold for several weeks, some for several days. It’s only about $8 per day, less than the cost of one round trip trade.

(Editors Note 3/10/12: ATP Sold this stock at $18.00 on Friday 3 days later for 18% gains)

Learn more here  

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MRM stands for Momentum Reversal Method that we use at my ATP trading/investing service.  This can  be applied to hold a stock for many weeks or even intra-day depending on our time frame.

In the case of CVV stock today, the stock had been falling for several days from $16 down to $10.66 per share lows on March 2nd.

At those lows, we had a rare convergence of all the MRM signals over the 3 time frames we look at calling for a bottom.

This is usually when most traders or investors throw in the towel, panic, and take their loss.

This is where we identify the opportunity to actually go long or if we own the stock to add to it or just hold it further.

Join us and learn more here by reading this letter that explains the MRM system and ATP

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The MRM timing system (Momentum Reversal Method) incorporates fundamental analysis of the specific company, and we combine it with the timing of entry and exit and give our subscribers real time alerts for buying and selling.  Using the MRM signals developed by David Banister helps to clearly identify entry and exit points.  This allows us to pull money out of the market on a consistent basis, and also tells us when it’s time to cut a position quickly or let it ride a bit further.  This includes the most important part of trading and investing, which is knowing when its time to cut a loser or to hold on or buy more on a dip.

Most traders make mistakes in letting a loser run down too far, or worse… selling in a panic on a pullback and then missing the big run that happens right afterwards.  Sound familiar?  When do you buy?  When do you sell?  When do you let a position ride further?  When should you cut a loss and move on?  When should you add to a position?

The MRM system helps to identify which stock should be held on a pullback or added to, and which one has changed its character and should be sold. Honestly, its the holy grail of buying low and selling high.

Recent samples of stocks that dipped hard but then reversed up for big profits, allowing us to ride and add or hold them…

INVN  KRO, UBNT, NZ.V, TPLM and many more. It’s very common for a stock to be volatile in the small to mid cap sector, but it’s important to avoid being shaken out on stop loss runs or other short term pullbacks in order to benefit from the common reversals to the upside.  This in effect is what MRM combined with our fundamental analysis allows us to  do.

Below are a few recent examples.  One is an Active Trade, which are 1-3 day hold for us often producing strong 7-15% moves.  The other is an intermediate trade or position we often hold for a few weeks or more depending on movement.

If you want long term success and you want your trading account to grow regularly like a staircase pattern, then you need to be able to answer the questions above and enter and exit like below:  (Join us at ATP now while we are open to new members and get a $150 discount off the first 90 days and we will throw in a free subscription to www.themarkettrendforecast.com )

Click here to read more about ATP and or sign up: LEARN MORE AND OR SIGN UP

Noting 5 days later this stock was down 22.5% after our alert to sell right at the top

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Developed by our Chief Strategist David Banister, and now being profiled on Wall Street Window, The Financial Survivor Network, and Your Trading Edge Magazine as this catches on…

Join us now while we are open for new members and we will give you $150 off the first 90 days, plus throw in www.themarkettrendforedcast.com subscription for free!  With both, you are armed and dangerous!

CLICK TO JOIN -Serious investors only

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Consider joining us and taking advantage of the crowds!

Sign up here: http://www.activetradingpartners.com/signup.php

Samples: http://www.activetradingpartners.com/articles/2012/01/november-2011-jan-2012-positions-at-atp/

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NQ and GLUU-

How are you going to know when a stock is bottoming out?

How will you know if you should be buying a dip or avoiding  a dip?

How do you know where a stock may go after you buy a dip?

MRM system developed by David Banister at Active Trading Partners helps pinpoint the exact spots to be a buyer, often followed by a stunning reversal within days allowing traders to buy dips and sell rips.

Stop sitting around wondering what to buy and when to buy.  Join ATP now and get $150 off the first 90 days plus we will throw in our valuable Market Trend Forecast service for free if you sign up quarterly.  

SIGN UP HERE

Email Dave@activetradingpartners.com for more information on MRM or anything else

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