The 4 Pillars of Investing

Quick Reference Checklist

Pillar 1: Fundamental Analysis

____ Check the economic big picture

Is the economy strengthening, weakening, or not likely to change

short term?

Are there major events on the horizon such as FMOC

announcements, housing reports, consumer confidence or GDP
reports?

What is the pulse internationally? Are you abreast monetary polices

of major players like the US, China Europe and Japan?

____ Check the fundamentals of the stock

In Machtrader, is it red, yellow or green?

How does it compare against other stocks in the same industry group
and sector?

Is the stock in harmony with the broad market picture?

Pillar 2: Technical Analysis

____ Check the broad market

What is the general trend of the major US indices such as S&P 500,
DJIA, NASDAQ, and Russell 2000. Are and of them leading? (EX:
have any had a breakout above resistance before the others or
breakdown below support before the others?)

What story do the chart patterns tell?

What do the candles say? Are the any reversal candles on the broad
markets?

What story does the volume tell?

What story do the western indicators tell?

____ Check the stock chart

Is the trend or chart pattern in harmony with the broad market?

What story do the candles tell?

What story does the volume tell?

What story do the western indicators tell?

Pillar 3: Cash Flow

____ Decide your goal for the trade

Is your objective to buy low and sell hight for a capital gain?
Is your objective to sell option premium for cash flow?
Is you objective to protect or hedge another asset?

____ Identify your entry points

For stock set a stop limit order

Use a trigger that allows for entry only if the stock moves in harmony
with your forecast.
What criteria makes the case for you entry?

____ Identify your target price

Review your case for why this likely

Review your case as the how long it will likely take

____ If trading an option check your three influencing factors

Will you make money with a change in price?

Will you make money with time decay?
Will you make money with a change in volatility?

____ WIll your position include stock, options or both?

Pillar 4: Risk Management

____ What is you maximum risk

____ What is you tolerable risk

____ What is your probability?

____ What is your exit strategy?

What is your stop price?

Likely hood of a gap?

____ What is your adjustment strategy?

____ Check the news and the calendars

Are the any pending announcements or news that could change the
outlook such as earnings reports, dividends, splits, FDA approvals,
management changes, or mergers?

____ What is your position size

____ What is your correlation to other positions?