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    Money Management by Walter Bressert: Contract No. 1: The Money Contract

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    cs
    The document discusses a strategy for trading stocks using contracts. It recommends dividing your intended investment into 3 equal contracts. The first contract, called the money contract, should be sold quickly after 3 waves to lock in profits and lower risk. The second contract is for short-term profits within a few weeks or months, selling as the target is approached. The third, long-term contract is held for larger moves, riding the market until a long-term price objective is reached. As corrections end, 3 new contracts should be purchased to repeat the process and continue participating in the primary market direction.

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    Money Management by Walter Bressert: Contract No. 1: The Money Contract

    Uploaded by

    cs
    61 views2 pages
    The document discusses a strategy for trading stocks using contracts. It recommends dividing your intended investment into 3 equal contracts. The first contract, called the money contract, should be sold quickly after 3 waves to lock in profits and lower risk. The second contract is for short-term profits within a few weeks or months, selling as the target is approached. The third, long-term contract is held for larger moves, riding the market until a long-term price objective is reached. As corrections end, 3 new contracts should be purchased to repeat the process and continue participating in the primary market direction.

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    money-management-by-walter-bressert-revised-by-bob

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    The document discusses a strategy for trading stocks using contracts. It recommends dividing your intended investment into 3 equal contracts. The first contract, called the money contract, should be sold quickly after 3 waves to lock in profits and lower risk. The second contract is for short-term profits within a few weeks or months, selling as the target is approached. The third, long-term contract is held for larger moves, riding the market until a long-term price objective is reached. As corrections end, 3 new contracts should be purchased to repeat the process and continue participating in the primary market direction.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    61 views2 pages

    Money Management by Walter Bressert: Contract No. 1: The Money Contract

    Uploaded by

    cs
    The document discusses a strategy for trading stocks using contracts. It recommends dividing your intended investment into 3 equal contracts. The first contract, called the money contract, should be sold quickly after 3 waves to lock in profits and lower risk. The second contract is for short-term profits within a few weeks or months, selling as the target is approached. The third, long-term contract is held for larger moves, riding the market until a long-term price objective is reached. As corrections end, 3 new contracts should be purchased to repeat the process and continue participating in the primary market direction.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Where 3 contracts are mentioned and you trade in stocks, a contract should represent 1/3

    of your prospective investment. Example: you want to buy 400 shares of XYZ
    Corporation. You’ll trade in increments of 133 shares.

    Money Management by Walter Bressert

    • All three contracts can be entered all at once, or incrementally, but they MUST be
    entered before the market takes off on the upside.

    • Contract No. 1: The Money Contract

    1. The first contract, called the Money Contract, is the most important.
    2. Profits on the money contract should be taken as quickly as possible. Sell the
    Money Contract after a 3 wave count.
    3. When the money contract (#1) is liquidated, your risk is lowered, you have profits
    and your break-even point has been lowered.

    • Contract No. 2: The Short-Term Profit Objective Contract

    1. The Short-Term Contract is designed to take profits within several weeks to a


    couple of months. Trading can be at the crest/trough of a trading cycle or a preset
    objective. Liquidate the contract as prices approach your price objective (wave
    count termination) or move stops closer and let the market take you out. This is
    easiest and involves little or no emotion.

    • Contract No. 3: The Long-Term Profit Objective Contract

    1. The purpose of the Long-Term Contract is to keep you in the market for the BIG
    moves. Assuming you have liquidated your other two contracts at a profit this
    will give you breathing room during any normal corrective phase. The purpose of
    the Long- Term Contract is to comfortably ride with the market until your long-
    term price objective is reached. This contract is the backbone of your investment.
    2. IMPORTANT - As the initial correction is ending, three more contracts are
    bought for a total of four contracts. You now have two Long-Term Contracts, one
    Money Contract and one Short-Term Profit Objective Contract.
    3. With the purchase of 3 new contracts, you repeat the same scenario outlined
    above. Liquidate the Money Contract and the Short-Term Profit Objective
    Contract as they meet your short term objectives (wave counts). The two Long-
    Term Contracts are held until the long-term objective is met, or the trend is no
    longer intact.
    4. You keep repeating this scenario until the bull/bear market is finished or a major
    correction is anticipated.
    5. If you fail to purchase 3 new contracts as a correction ends, you will have your
    Long-Term Contracts and can still participate on a primary direction move.
    6. Should the market fail to reach your long-term price objective, fail-safe stops will
    liquidate your long term position. Assuming all goes well, the remaining Long-
    Term Contracts can be liquidated at different price levels as the long-term
    objective is met.

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