xV44ےپta´·µtataPجرta  ta ta¸ïUnfiledta¸ïيtaےّےےtaےّےےtaےّےےtaگى(ےےےےےےےےّےےےنےےے..Qtaگىُےےےگtaشكtaےّےے ta¸ï MS Shell Dlgta¸ïStocksPKڈtata taîtaشكtaشك taشك ta¸ï Presentationta¸ïPKPK­tata taîtaشكtaشك taشك ta¸ïGeneral instructionsta¸ïThis is an investment strategy based on Tom Dorsey's Four-step Game plan to invest on the stock market using Point and Figure charts. If your not familiar with Point and Figure chart you will be able to find a lot of information on the web. Look at http://www.stockcharts.com/charts/pointFigure/ for example. This outline has been organised in four major sections. Each section will provide you with some knowledge. The main idea is to give you an organised, methodical and disciplined way of how to select and follow your investment on the stock market. To apply this strategy just follow each step and its items in the order as they are displayed. The fourth step is more a set of useful advices without a precise order to apply them, just keep them in mind when you are trading.PKPK‚tata taîtaشكtaشك taشك ta¸ïCreditsta¸ïùGeneral idea based on Tom Dorsey's Four-step Game plan to invest on the stock market using Point and Figure charts. Compiled by Eduardo Rene Rodriguez Avila from "Tom Dorsey's Trading Tips for Stock Market Success", web-based course published in the Bloomberg University (http://www.bloomberg.com), for the ThoughtManager Contest sponsored by Hands High Software. No responsibility of any type is derived or implied from any mentioned person or company. Use it at your own risk. July 22nd, 2002.PKPK‍tata ta  taشكtaشك taشك ta¸ïStep 1: Analyze the Market.ta¸ïPKPKڈtata taî taشكtaشك taشك ta¸ï Collect datata¸ïPKPK`tata ta  taشكtaشك taشك ta¸ï 80/20 Rule.ta¸ïسAccording to Tom Dorsey, 80 percent of the price movement in any given stock is attributable to the market and sector. Yet, typically, investors and brokers allocate only 20 percent of their research time here.PKPKخtata ta taشكtaشك taشك ta¸ïAnalyse price trend.ta¸ï8Determine if the market is trending upward or downward.PKPK—tata ta taشكtaشك taشك ta¸ïBullish percent.ta¸ï"Bullish percent" acts as an indicator of the market's current position in an upswing cycle. It's calculated by dividing the number of stocks within a given universe that are on a point-and-figure buy signal by the total number of stocks in that universe. For example, if there are 3,000 stocks in the over-the-counter (OTC) market and 1,500 show bullish patterns with buy signals, the bullish percent reading for the OTC market is 50 percent. You can also plot these percentage figures on a point and figure chart.PKPKatata taîtaشكtaشك taشك ta¸ïIs 30% or lower?ta¸ïدLevels of 30 percent or lower (at the beginning of an upswing) are considered low risk. The optimal time to buy is actually when the bullish percent has dipped below 30 percent and starts to reverse upward.PKPK6tata ta taشكtaشك taشك ta¸ïIs 70% or higher?ta¸ï£Levels above 70 percent are considered overbought or high risk. The best time to sell is when, having moved above 70 percent, it then drops down below this point.PKPK‘tata ta taشكtaشك taشك ta¸ïRelative strength.ta¸ï‎You want to determine which sectors are outperforming the market. Determining a sector's strength, relative to the market in general, involves a simple calculation. Using Tuesday evening closing data, divide the price of the sector index by the price of the S&P 500 and then multiply by 100. This number, known as the Sector Relative Strength, can be used to compare sector to sector. Sector Relative Strength can be plotted on a point and figure chart, just as bullish percent can. The start of a new, strong column of Xs, particularly if it tops the last X column, is a buy signal, while reversal into a column of Os is a warning sign or sell signal. You can also apply the concept of bullish percent to sectors, to fine-tune the timing of transactions. Divide the number of stocks that are on a point-and-figure buy signal within the sector by the total number of stocks in that sector. As with market-wide bullish percent, the 30 percent level and below, where demand is high, is considered the low-risk area, while the area above 70 percent, where demand is low, is considered high-risk. To maximize your potential profits, try to buy when the sector has dipped below 30 percent and is headed back up. Sell when it has topped 70 percent and is dropping back down. PKPK¢tata ta taشكtaشك taشك ta¸ï Step 2: Select Bullish Sectors.ta¸ïPKPKtata ta taشكtaشك taشك ta¸ïInvesting on indices.ta¸ïoOver the past few years, the major exchanges have developed products that enable investors to play the broader market with a single product. Instead of buying 500 S&P stocks, you can make one purchase of S&P 500 Depositary Receipts, known as SPDRs (market symbol SPY). The NASDAQ 100 Shares (QQQ) is a similar product designed to help you invest in the over-the-counter market. You can own a portfolio of Dow Jones Industrial Average stocks through Dow Jones DIAMONDS (DIA). The same type of product exists for market sectors, although these are even newer and do not yet exist for every sector. The American Stock Exchange offers Select SPDRs, each covering a broad industry group such as financials (market symbol XLF) or technology. Several financial institutions have also begun to offer these products. Two of the first were Merrill Lynch's HOLDRs and Barclay's iShares.PKPKêtata ta taشكtaشك taشك ta¸ï0Find the industry sectors that are on the rise.ta¸ï9A bearish (downtrending) market shouldn't necessarily deter you from buying, but it should encourage caution and a defensive stance. Did you know that stocks go down almost twice as fast as they go up? You may want to buy smaller blocks of stock, weed out weaker performers, and be rigorous about selling losers.PKPK¬tata ta taشكtaشك taشك ta¸ï*Step 3: Create a Catalog of Sound Stocks.ta¸ïPKPKاtata ta !taشكtaشك taشك ta¸ï-Compile a short-list of high quality stocks.ta¸ïFrom those sector you have found are on the rise, select those stocks you want to invest. Be objective. Keep in mind stock market is risky, so just pick up well-known, solid companies and mutual funds. Forget any visionary or romantic idea. To do this use Fundamental Analysis.PKPK¬tata taî#taشكtaشك taشك ta¸ï*Select stocks with good profit potential.ta¸ïPKPK•tata ta %taشكtaشك taشك ta¸ï+Select from the list to build a portfolio.ta¸ïéIt's a good idea first try your selection in a what-if basis, specially if you're a novice. Try first build a portafolio in one of the many free web sites dedicated to stock trading or to give financial information. Play and learn.PKPK?tata ta 'taشكtaشك taشك ta¸ï&Time your trades to maximize returns.ta¸ïکRemember: diversification is the key. When some of your stock are up is time to sell and buy those which are down. That's why you have to good catalog.PKPKڑtata ta )taشكtaشك taشك ta¸ïStep 4: Put it to work!ta¸ïPKPK»tata ta +taشكtaشك taشك ta¸ï9Don't make the mistake of waiting for the perfect trade.ta¸ïPKPKµtata ta -taشكtaشك taشك ta¸ï3Stocks go down almost twice as fast as they go up!ta¸ïPKPK°tata ta /taشكtaشك taشك ta¸ï.Focus on relative strenght, trend and signal.ta¸ïPKPKظtata ta 1taشكtaشك taشك ta¸ïWNo risk, no reward. The most important way to control risk is by knowing when to sell.ta¸ïPKPKثtata ta 3taشكtaشك taشك ta¸ïIOnce your stock hits the stop-loss point, give it three days to recover.ta¸ïPKPK’tata ta 5taشكtaشك taشك ta¸ïLock in profitsta¸ïPKPK®tata ta 7taشكtaشك taشك ta¸ï,Sell 1/3 when you are up 30% in a position.ta¸ïPKPK¦tata ta 9taشكtaشك taشك ta¸ï$Sell another 1/3 when you're up 50%ta¸ïPKPK¸tata ta ;taشكtaشك taشك ta¸ï6Sell last 1/3 when the picture starts to deteriorate.ta¸ïPKPK tata ta =taشكtaشك taشك ta¸ïKeep a diversified portfolio.ta¸ïPKPKبtata ta ?taشكtaشك taشك ta¸ïFInvest in multiple sectors that are outperforming the general market.ta¸ïPKPKذtata ta Ataشكtaشك taشك ta¸ïNPrices aren't determined by quality, they're determined by supply and demand.ta¸ïPKPKڑtata taîCtaشكtaشك taشك ta¸ïUse Technical Analysis.ta¸ïPKPKضtata ta Etaشكtaشك taشك ta¸ïTAnalyze short-term price patterns, longer-term price trends, and relative strength.ta¸ïPKPKبtata ta Gtaشكtaشك taشك ta¸ïFTry to predict demand by looking at recent price and volume movement.ta¸ïPKPK®tata ta Itaشكtaشك taشك ta¸ï,Sell/Buy signals in Point and Figure Chartsta¸ïPKPKوtata ta Ktaشكtaشك taشك ta¸ï Doubles.ta¸ï\Double Top or Double Bottom.- Signal to buy or sell when a column exceeds the previous one.PKPKزtata ta Mtaشكtaشك taشك ta¸ï Tripples.ta¸ïGDouble Top or Tripple Bottom..- A column exceeds two previous columns.PKPKtata ta Otaشكtaشك taشك ta¸ï Shakeout.ta¸ï”The stock makes two tops then breaks a double bottom (when an O column exceeds the previous O column). It is completed when a triple top is broken.PKPKہtata ta Qtaشكtaشك taشك ta¸ï Triangles.ta¸ï4Bullish Triangle: Five columns are required to make this buy signal pattern, identified by a series of lower highs and higher lows. Bearish Triangle: Five columns are required to make this sell signal pattern, characterized by a series of lower highs and higher lows that form what looks like a triangle.PKPK]tata ta Staشكtaشك taشك ta¸ï Catapults.ta¸ïرBullish Catapult: This buy signal pattern is a combination of a triple top breakout followed by a double top breakout. Bearish Catapult: A triple bottom sell signal followed by a double bottom sell signal.PKPK’tata ta Utaشكtaشك taشك ta¸ïSignals reversed.ta¸ïےBearish Signal Reversed: This signal features a series of lower highs and lower lows that abruptly "reverses" that pattern and breaks out. Bullish Signal Reversed: A seven-column-minimum sell signal featuring a series of higher highs and higher lows.PKPKکtata ta Wtaشكtaشك taشك ta¸ïBuying opportunities.ta¸ïPKPK6tata ta Ytaشكtaشك taشك ta¸ïStocks in an overall uptrend.ta¸ï—To find out if a stock is in an overall uptrend, you need a new tool -- the Bullish Support Line or uptrend line. On a point and figure chart, the bullish support line is drawn from just below a stock's apparent "bottoming-out" point, upward to the right at a 45 degree angle. If a stock is trading above this bullish support line, it is considered to be in an overall uptrend and a candidate for purchase.PKPK،tata ta [taشكtaشك taشك ta¸ïKStocks that have positive strength relative to the market and their peers.ta¸ïصRelative strenght.- divide the stock's closing price (Tuesday's is generally used) by the closing price of the Dow or any other market index, and multiply by 1,000. The performance of a stock to other stocks within its sector .- To calculate peer relative strength, simply divide the stock's closing price by the closing price of an applicable sector index. To spot reliable relative strength RS trends, RS readings should be plotted on a point and figure chart.PKPK´tata ta ]taشكtaشك taشك ta¸ï2Stocks that are on a point-and-figure buy signal.ta¸ïPKPKـtata ta _taشكtaشك taشك ta¸ïZStocks in an overall uptrend with positive strength relative to the market and its peers.ta¸ïPKPKدtata ta ataشكtaشك taشك ta¸ïMResist to buy a stock on the original breakout and wait for it to pull back.ta¸ïPKPKکtata ta ctaشكtaشك taشك ta¸ïSelling opportunitiesta¸ïPKPKکtata ta etaشكtaشك taشك ta¸ï0Stock's price breaking down an overall uptrend.ta¸ïçWhen a stock's price breaks down below the Bullish Support Line or uptrend line, it may signal a change in the overall trend. At this point, you want to look closely at the stock's other criteria to determine if it's time to sell.PKPKںtata ta gtaشكtaشك taشك ta¸ïkThe bearish patterns in point and figure methodology provide objective indicators that it is time to sell.ta¸ï³The signs of weakness in a stock are just the opposite of the signs of health. If you own a stock that is showing violations of its bullish support line, a high bullish percent figure, deteriorating relative strength, or sell signals in its price chart, it may be time to let go. When relative strength remains positive and the stock is trading above its bullish support line, it is probably healthy even if it's in a column of Os.PKPKFtata ta itaشكtaشك taشك ta¸ï,Remember the importance of limiting losses.ta¸ï™If you aren't ready to sell off your entire position, consider selling half of it and reducing potential loss while retaining some opportunity for gain.PK