The CGW Discretionary/Systematic Hybrid Long/Short Equity Trading System

• John Lee
• July 13th, 2010

High-Probability (n.): The quality or condition of being highly likely.

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Hey Everyone!

My name is John Lee and I’d like to welcome everyone to the *NEW* ChartsGoneWild.com. If you’re unsure of where the name came from, it is also the name of my Stocktwits TV show which airs on Tuesdays at 10PM EST. Several weeks ago, I promised my readers, followers, and viewers that I would share something very special and powerful. After a long period of deliberation, I decided to launch the Premium Charts Gone Wild blog on the Stocktwits Network with the tremendous help and support from the Stocktwits Team. This strategy is very different from the ‘usual’ trades that you see me execute. I use this system for my core personal account, but more importantly, for my managed accounts.

If you’re not aware, I developed as a core swing trader when I went to Valley Forge Military College in 2002 at the age of 18. I woke up at 5AM and slept around midnight on a daily basis. By default, this ruled out day trading for me. It was during these years where I developed a reliable, profitable, and easily executable swing trading system. This was designed for people who were unable to be in front of the computer all day long (like me at the time).

Most of you already know that I am a discretionary technical trader and I perform trades on all time frames utilizing all styles, including scalping, day trading, swing trading, position trading, and unconventional methods to achieve profitability. However, my methods are also very systematic giving the user the (highly suggested) option of allowing the stops, levels, and orders to have complete control over the user’s trading activities. Discretion is required when adjusting the above mentioned parameters on a daily/weekly basis. This way, trading is not a high-maintenance activity and by utilizing the parameters, there is a maximum amount of control over your trades.

The system is used for my managed accounts due to the ease of maintaining them. Like other methods that I employ, the objective of this swing trading system is to make the most amount of money in the shortest period of time and to post a positive return on a monthly basis. The strategy does not try to mimic the market. Instead, the strategy is considered an “aggressive growth” profile. Due to the higher risk profile of aggressive growth strategies, the risk element must be contained. To do this, we:

a) Select and approve of high-probability setups.
b) Utilize buy/sell stops, OCO/bracket orders, and scaling to minimize market risk.
c) Typically, no more than 10-20 trades will be made per week eliminating the risk of overtrading.
d) Positions are sized appropriately and losing trades are normally capped at 10%.

The idea is to maintain an above average # of wins as well as a high # of above average % wins. Keep in mind that this is not a “get rich quick” scheme. Also, keep in mind that the priority of the premium service is to make money. Therefore, all educational materials will remain free and available to everyone.

I trade when “all the stars are aligned”. No, I don’t use Astrology, but rather attempt to have all of the controllable elements in a potential trade lean heavily in my favor. Typically, I would need to have the “right moment” when the right candles are forming, the moving averages are sloping in a certain way, or the patterns are about to execute, etc. If key technical elements are missing in a stock, then we simply ignore it and move on.

Various long/short strategies will be used and as long as the instructions are followed, then you should be fine. An issue comes up when rules, levels, orders, etc. are ignored. The system is designed so that human involvement is greatly minimized unless when absolutely necessary. This way, emotional mistakes should be at a minimum. The primary role of the premium chat room is to maintain constant communication with all subscribers and to maintain order and discipline.

I will attempt to create daily public and premium blog posts with the necessary updated data. Public posts will contain general market data/charts. For premium posts, you are to keep the specific parameters in mind and available for each trade. Since we will never take on “too many” positions all at once, this should not be a difficult task.

Another key element is the various parameters for each stock. Specific orders, stops, target, entry/exit levels will all be pre-determined. Contingency measures will also be given. Every base should be covered on a daily basis, except when rare uncontrollable extra-ordinary events take place (such as the 9/11 attack).

At certain times, we will make day trades. Keep in mind that this is NOT a day trading service. However, if exceptional opportunities exist, then there are no reasons to not take them.

This system works with all account sizes and this system is easy to understand for most. In fact, I taught my 12-year old cousin how to use this system last year. This system will not work if you have absolutely no foundation in technical analysis, like to complicate things that don’t need to be complicated, ignore rules & parameters, have wild expectations, or gamble.

This sums up the Charts Gone Wild Premium service on the Stocktwits Network. If you do become a subscriber, I would like to be the first person to welcome you in (Welcome!). My goal for everyone is to be satisfied with the service and to gradually become better traders. I ensure you that I will do my part and fulfill my obligations and perform my above mentioned duties.

Thanks and good luck to you,

John Lee
“The Chart Addict”
@WeeklyTA
StocktwitsTV – Charts Gone Wild

CGWPremium

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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