How I generate ‘slipstream’ trades


‘Slipstreaming’ is a cycling metaphor that fits perfectly with what I do in the markets.

If you’ve ever watched a big cycle race, like the Tour de France, you’ll know that the key to winning a stage is timing: knowing when to sit in the ‘slipstream’ of the rider in front of you (letting them do the hard work) and knowing which points in the race to attack.

It’s exactly the same with trading.

You should never enter a trade until all the moons are aligned. I will wait, sometimes days or even weeks until all of my trading rules have been fulfilled before I enter a position. This ensures that my probability of success is as high as possible.

Slipstreaming works with ANY kind of stock, but my trading service focuses mainly on taking trading profits from some of the biggest and most stable stocks on the ASX: blue chips that investors would normally just buy and hold (oblivious to the short-term potential of trading these stocks).

These stocks are easy targets for me as huge volumes of shares are traded in them every day. This makes it easier for me to line up my sights and pick the best entry (and exit) point for our limited-risk trade.

And in case you were wondering, I take long AND short trading positions on these big stocks depending on how the market is looking – which means I’m able to help my readers make gains when the market takes a turn for the worst.

I’ll have charts two trading screens while the markets are open. First thing I do is check the fundamentals of my targets. Other purely technical traders may disagree, but I believe it’s important to have a deeper understanding of the underlying fundamentals of a stock before you trade it.

It’s also useful to take account of the bigger, ‘macro’ picture when deciding what – and how – to trade. I usually have an idea of what sectors I want to trade from what’s going on in the news. Then it’s just a question of timing.

My trading system tells me very quickly if I’m wrong or if my timing is out. It’s taken me over 15 years to develop my risk management system and it ensures that the volatility in my account is kept to a minimum.

Stop loss management is another area that’s important to the overall return on trades. Stocks are incredibly volatile – most people’s stop losses don’t take account of this effectively.

You should always keep a close watch on your stop loss level on every open trade you have, and be prepared to act if the market moves against you quickly.

Listen, most of the time, if the trade doesn’t gap on you, your stop will get executed at or close to the level you had in mind and your risk control strategy will work as designed. No worries.

But sometimes the market does open sharply up or down. And that’s why trading with stop-losses is always recommended – and why this is a really important part of my strategy for Slipstream Trader.

My method has a very tight stop loss initially, but once my initial target is reached, the stop loss is actually quite a distance away from where the stock is trading. This ensures you’re not quickly whipped out of your position by any sudden volatility.

The key for any trader is to be consistently profitable with little risk and to – hopefully – take some big wins along the way. My method strikes a good balance between protecting your cash, taking some profit when you have the opportunity and still giving yourself the chance to hit a home run.

Look, if you’ve ever thought of giving trading a try – why not put my Slipstream Trader service to the test for the next 60 days, risk free?

It’s an email alert service. I do all the research and provide my trading recommendations to you in a short email. It’s your choice whether you use my emails to trade or not. My advice is merely a tool for you to incorporate into your own financial plan if you want to.

My proposition is simple:

If you’re interested, I can start emailing you details of all the ASX/200 trading opportunities my system flags up, along with the action I think you should take…

I’ll send you the name of the stock to buy (or sell), when to buy, at what price, and what stop loss level to set…

I’ll shoot you another email when I think you should take profits – including what percentage of your holding to take off the table. In that email I’ll also tell you where to move your stop loss to so that you ‘lock-in’ gains whatever happens to the trade…

I’ll continue to update you by email – with detailed action to take – for as long as the position is open. Then, when the time is right, I’ll send you an email with a very simple instruction: “SELL”…

To find out more about Slipstream Trader, go here

Murray Dawes,
for The Daily Reckoning Australia

Murray Dawes
Murray began his career on the Sydney Futures Exchange trading floor in 1993 with Swiss Banking Corporation (SBC). He spent a couple of years in the 3 and 10 year bond and option pits before moving on to the Share Price Index (SPI) futures and options pit. From there he became a broker with SBC specialising in SPI futures and options to institutional clients. After leaving SBC Murray continued his career in broking at Bankers Trust Australia. Then in 2001 Murray moved to Melbourne to work as a hedge fund trader for one of Australia’s wealthiest families. In 2003 he was ready to set up his own firm providing the same proprietary technical trading system to some of Australia’s boutique hedge funds. The success of Murray’s system led to him trading a $10 million account for a high net worth individual. This involved trading Australian and US futures and Australian stocks. Now Murray heads up the technical analysis desk for us passing on to readers some of his experience from 16 years of trading.
Murray Dawes

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