Chart of the day is EA: Keep it simple stupid!

Sometimes swing trading is easier than we make it. In the trading game it literally pays to keep it simple.

Our stock of the day, EA is a great example of the KISS method. When do you buy EA?

That's easy. When it pulls back to the 50 dma or when stochastics near oversold levels. It's a slam dunk trade that would have given us 7 profitable trades over the past year.

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For entry I will wait for a slight pullback from this level to attempt to get better value.

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Chart: OII

Oceaneering Internat (OII) has consistently been a buy on pullbacks to the 20 day moving average. This is a "keep it simple, stupid" trade, which is why I did not add any indicators to this chart. Why complicate maters? I will likely enter on a low volume pullback to the moving average.

Today's Trade: EWZ

I took a small nible in EWZ at the close yesterday, with a 300 share position $60.35. I've placed a mental stop just under $60, with an initial target at the recent all time high, around $63. I'll look to add more if it can break into new high territory.

If you look at the trend on the chart below, you'll see that the "Brazil trade" has been to aggresively buy dips and breakouts. Nothing too complicated here, just buy on any dip and set a low risk stop. While I have no empirical evidence, I have a gut feeling this will continue until we reach $100. As usual, I'll continue with what has worked until it stops working.

at $60.

Trade: RIO and Entry Point Precision

I bought 500 shares of RIO at $44.65. This is a simple "trend pullback" trade. The stock has been on a steady trend that has bounced off of every pullback to the 50 day moving average. I am a bit concerned about the heavy volume on this pullback, so I will use a tight stop at $43.50, which is just under the 50 day moving average. My target is $47, the old highs, which gives me a better than 3:1 reward to risk.

Lately I have been receiving e-mails and comments about precise entry points. While I try to be a bit more precise on breakouts, when it comes to pullbacks I don't worry so much. As long as I've got a good risk reward, I'll enter. For example, yesterday I decided I would enter RIO if it was within a point from the 50 day moving average. This morning when I checked the quote, it was at $44.60, so I decided to enter. Nothing too complicated. No 30 minute charts, candle patterns or fibs.

Sometimes I think we tend to over complicate things. I do have some day trading strategies that are much more precise. However, when swing trading with a goal of 2-10 points, waiting for a few nickels and dimes doesn't amount to much, and can keep you out of good trades.