Let this Swing Trader Guide You to Quick Double-Digit Gains — Whether the Market Swings Up or Down

When the Dow plunged -37% in 2008, Dr. Melvin Pasternak made money. When it rebounded +19% in 2009, Dr. Melvin Pasternak made money again. Read on to see how this 32-year veteran swing trade can help guide you to quick, double-digit profits in ANY market — including this one.

Like Michael Jordan retiring in his prime, Dr. Melvin Pasternak left thousands of disappointed fans when he said goodbye to us at StreetAuthority in 2007.

I wasn’t too happy myself. I’m in the business of selling subscriptions. With his portfolio up +30% at the end of his last run with us, well ahead of the S&P 500, his service sold itself.

In fact, Dr. Pasternak’s last 20 winners with us were all up double digits. He was making his subscribers money. he was making himself money. and he was making me money. I hated to see him go.

But. after investing since 1962. and trading almost every day for the past three decades, who can blame the man for wanting to take a break?

Staying Sharp at Home

A few months ago, Melvin called me up from his home in Calgary. It turns out the good doctor hadn’t been sitting on his hands in retirement.

The wild up-and-down swings we’re seeing in the stock market are creating plenty of opportunities for quick, double-digit swing trades.

Hello, I’m Dr. Melvin Pasternak. Over the past three decades I’ve traded stocks almost daily.

Over the years, I have made 7,000 to 8,000 trades and have a towering stack of brokerage receipts in my basement to prove it. Some years have been especially memorable. In 1999, the last year of the great bull market, my account size went up over 700% and I turned a profit on over 80% of my picks.

I’m not going to thump my chest about my net worth. but let’s just say my trading has been more than profitable enough to fund the lifestyle I want. My wife and I live very comfortably. We have a lovely home on some beautiful acreage. On weekends, we often go to our rural cabin on a large piece of land with 80-foot-tall spruce trees and a river running through it.

I’m not a jetsetter or a toy collector. I’d rather give what I don’t need to charity and spend my scarce free time volunteering on the three boards I sit on.

I started investing young. I was born in 1944 and bought my first stock in 1962 — while working one summer as a runner on the floor of the New York Stock Exchange.

I noticed IBM kept going up and up and I hated to see the ship leave port without me. So I scraped together every penny I had and bought 50 shares.

My father was very upset. He couldn’t believe I was risking all the money I saved for college.

I bought the stock anyway — and made the princely sum of $1,000 — which actually was a princely sum in 1962.

I went off to college and grad school. obtained a Ph. D. in English and then an MBA. It was while getting my MBA in 1970 that I learned the keys to fundamental analysis. Since then I have been obsessed with trading and investing.

In the late 1970s I became fascinated with classical technical analysis — support and resistance, price patterns such as triangles or rectangles — and studied them all.

I subscribed to chart books by earth mail — grateful to have them even if they were two weeks late. In the early 1980s I discovered financial television. I watched FNN (the forerunner of CNBC) every night and jotted down the advancing and declining issues, up and down volume, new highs and lows and many other figures so I could create my own homemade charts and analyze them.

My S&P 500 chart grew so big I named it monster chart. It grew to about 10 feet long and 5 feet high. To bring it to my stock market classes took an entire attach� case. I gave it a trim every so often, but like an octopus, its tentacles always seemed to grow right back.

God bless whoever created stock market software! In the early 1990s I started using Metastock and integrated its funny-sounding tools — stochastics, moving average convergence/divergence, the parabolic stop and reverse — into price pattern analysis.

At the same time I began teaching trading seminars at T.D. Waterhouse, which I did for 15 years. I taught at Mount Royal University for 28 years, eight of which I taught a stock market course. In 2006, I published my book on how to use Japanese candlestick charts to trade: 21 Candlesticks Every Trader Should Know.

Even after all these years, the market still fascinates me. I get up at 7 am, tune into the pre-market S&P futures and log onto my favorite financial website. Trading is an endless chess match between me and the market — a game that the market pays me very well to play!

In each of my weekly Double-Digit Trading newsletters, my aim is twofold. First, I always give you specific stocks that I believe will make you money within a few weeks to a few months. In my earlier Swing Trader letter I had trades that jumped more than +20% in mere days. And second, I share my technical and fundamental analysis in detail. because I want to teach you how to increase your batting average when you trade on your own.

Over the years, I’ve taught thousands of people the basics as well as the intricate details of technical and fundamental analysis.

In the process, I have helped make most of them better traders. I sincerely hope to do the same for you — and to steer you toward quick, double-digit profits even in today’s manic-market. — MP

He kept right on trading for his own account — while at the same time totally overhauling his trading strategy. He still pores over the charts like a classic technician but he’s added a slew of fundamental tools to his tool box.

He now incorporates 43 technical and fundamental factors into every trade before pulling the trigger.

Since the overhaul, Melvin has outperformed the market decisively. For example, in 2008 — the worst market in recent history — he made 18 round-trip trades and posted an overall gain of about +22%. With the S&P 500 down by about -37% that year, he creamed the index by 59 percentage points.

Like a kid with a new toy, he wants to show it off. I can’t blame him. More importantly, like any life-long educator, this former college professor wants to tell as many people as possible what he’s learned.

Before we hung up, Melvin asked if StreetAuthority would be interested in starting another newsletter to share his trades again.

My short answer: Yes, yes, and yes!

It looks to me like the good doctor hasn’t lost a step. So we’re starting a new trading service dedicated 100% to Melvin’s trades: Dr. Melvin Pasternak’s Double-Digit Trading.

Melvin’s goal is to deliver double-digit gainers week after week. And as a swing trader, he’ll hold his positions for a month or two at most. He won’t hit the nail on the head every time. But his last 20 winners with us before taking his sabbatical in 2007 were all double-digit gainers.

Where Others See Chicken Scratch, Melvin Pasternak Sees Profits

Most people look at a stock chart full of moving averages, volume bars and other lines and squiggles and see a Jackson Pollock painting. Chicken scratch. Melvin Pasternak sees a battle between buyers and sellers full of clues to who will win the struggle.

Technicians believe that all of the market’s hopes, fears and decisions are already expressed in this chart. Decode the chart’s message and you know whether a stock will go up or down.

In just seconds he can pick out a support price. That’s a point where buying will emerge to stop a falling stock, at least temporarily. He can also find resistance — a point above the current market price where selling will emerge to create a pause in an uptrend.

Just knowing these two points alone is a huge advantage to any investor. Think of a stock you own. Wouldn’t you love to know the range it will trade in 85% of the time? Exactly where it will bump its head against a glass ceiling. and the floor that will support the price if it drops?

It’s All In the Chart — A Brief Example of a Great Swing Trade

Here is a real-life example of the enormous profits you can earn swing trading. Melvin traded SIMG for a huge profit in the real world just as described, and has the trading slips to prove it.

This chart of Silicon Image (SIMG) is a perfect illustration of the enormous profits Melvin has earned by deciphering chicken scratch. It also shows the tremendous amount of work he puts into each of his trades before he pulls the trigger.

The chart is in candlestick form (an essential tool for swing traders), uses Bollinger bands, and shows the following indicators: rate of change, MACD, MACD histogram, price relative to the S&P 500, commodity channel index (CCI), full stochastics and RSI.

If you’re unfamiliar with these terms, don’t worry. Melvin explains them all in Double-Digit Trading. They soon become second-nature to his subscribers.

If it looks like a lot of work, well it is! But that’s what we’re hiring Melvin for. If you don’t want to get into the nitty gritty, that’s fine. In every issue, he gives you a 10-second executive summary so you can execute the trade in a flash.

During this eight-month period you can see four profitable swing trades, labeled ST A-D on the chart. Depending on your specific entry and exit points, all four of these trades yielded gains of +50% to +100% in as few as 30 trading days.

Trade A — Buy/Long. It all started in the beginning of November, when Melvin saw a signal that was so powerful it begged to be taken: SIMG broke through $4.63 — a resistance level that had turned the stock back twice before.