New Trade - AGU

Just entered a new trade today - AGU. Before getting into the details of the trade, I wanted to add another aspect of what I look at before actually getting into a trade - it's just another level of items that I look at to help my advantage over the market.

I ultimately want BIG MONEY (i.e. institutional traders) to be driving the industry group and sector of the stocks that I'm trading. Big money can either make a trade easy, or difficult. If you trade in their same direction, then your trades will tend to be easier.

So how do you monitor this?? In addition the the Money Flow indicator that's at the bottom of my stock chart screens, I also look at what's called "The Big Chart" - here' the link to the Big Chart.

The Big Chart will show each industry group and if money is coming into the industry group or out of the industry group. Each industry group is assigned a number and a coinciding color. The lower the number, the weaker the group. The higher the number the stronger the group.

The numbers go from 0 - 100.

The numbers and coincidental colors are as follows:

100 - 66 Green

65 - 33 Yellow

32 - 0 Red

In general, I'm looking for the big money (via this Big Chart) to basically NOT be going against my trade. So, if I put on a bullish trade I DO NOT want the color to be red for my particular stock's industry group. And if I put on a bearish trade, I DO NOT want the color to be green for my particular stock's industry group. Again, I do NOT want the colors going against the direction of my trade for my stock's sector.

If I put on a bullish trade, I can have my stock's industry group be either green or yellow and NOT red.

If I put on a bearish trade, I can have my stock's industry group be either red or yellow and NOT green.

Also, it's nice to see the colors and corresponding numbers going in the direction of my trade, example:

Bullish - it would be nice to have the colors going from red to yellow to green (the current color). This shows big money COMING INTO the stock's industry group.

Bearish - it would be nice to have the colors going from green to yellow to red (the current color). This shows big money GOING OUT OF the stock's industry group.

Again here's the LINK TO THE BIG CHART.

The Big Chart works in conjunction with everything else. It doesn't specifically make or brake a trade. If every other thing is pointing bullish for your trade, but the Big Chart does not, then you should be okay to still take the trade. At some point trading becomes an art and you have to let some subjectivity into it - otherwise you may never have a trade set up.

The more you trade, the more you will find your own set of rules and items you look at, but for now this just gives you another info source.

Sorry to get so off tangent, but these things are going to come up from time to time and I'm going to address them as they come up.

I'll continue on the next post with the AGU trade.