dreyerd

Don Dreyer (aka:dreyerd) bases most of his trade decisions on technical analysis. He noted, “I use the Investors Business Daily (IBD) as well as the relative strength of stocks and sectors when creating a list of stocks to consider. I trust sources like IBD and Zacks to do the fundamental research and I never personally dig into the details of the companies I trade. The current trend and technical pattern of the stock is of utmost importance. I also want to stay in harmony with the overall market; go long when the market is strong or strengthening and go short when the market is weak or weakening.”

Don uses this approach to invest in companies such as Gammon Lake Resources Inc. (GRS - Snapshot Report), and ETFs such as the UltraShort QQQ ProShares (QID) and the UltraShort SP500 ProShares (SDS). These picks among several others have landed this player’s Zacks $100K Challenge portfolio into the top 10 with an overall return of 51.68% since the beginning of this year. Click here to check out this participant's complete portfolio. Take a look at his trading history by clicking here.

How is he so successful?

Don credits several market gurus for his astute style of trading. This market enthusiast said, “I stand on the shoulders of many investing giants. What works now in the stock market is closely related to what has worked in the past. Jesse Livermore, William O'Neil, Jack Schwager, Van Tharp and Alex Elder have provided the most via the written word. Marc Mandel and his radio program Winning On Wall Street (winningonwallstreet.com) has been a tremendous inspiration. David Elliot (wallstreetteachers.com) has heavily influenced the strategy I use to trade. Harry Boxer (thetechtrader.com) has also contributed to my strategy development.”

While he does not rely on one stock to make or break his portfolio, the Simulator competitor did single out Gammon Lake Resources Inc. (GRS - Snapshot Report) as his best performer. He explained that this precious metals play was coiling quietly into the 50-day moving average. Don pointed that this quiet consolidation pattern is one of his favorites. He did the technical analysis, put in the buy order and a few days later GRS made a strong move higher.

Don summarized his strategy by stating that he follows the mantra of "Let your winners run and cut your losers short."

So when does he know that it is time to cut the losers?

“I am militant about exiting when my stop is taken out (initial stop or trailing stop). Not enough attention is paid to exiting stocks. Van Tharp is an excellent resource for learning more about knowing when to sell,” replied Don.

How does he know what to buy?

The technical trader said he looks for a high reward to risk ratio, a realistic target that is much larger than his stop loss level and strong volume.

Any predictions?

Don is not big on forecasting the Dow’s year-end result. Instead, the savvy investor puts all of his energy into properly interpreting what the market is saying in the present moment.

How about some advice for the beginners?

“To someone just starting out, I would recommend putting most of your emphasis on education and test what you learn with paper trading (like you can with the Simulator game),” commented Don. “I would also stress education around system development rather than stock picking skills. Van Tharp is an excellent resource to understand money management, the psychology of trading, system development and position sizing.”