I have not yet formulated a complete trading strategy. Hence, that is the first warning sign! I have however a few guidelines that I will follow:
1st) No more than 30% of the portfolio at stake.
2nd) 5 positions at all times (expectation is 4 losing position and 2 winning
positions)
3rd) All postions will have an automatic stop loss of 10%
4th) Winning positions will be held for as long as possible with a trailing stop
5th) Stay away from stocks where multiple loses are incurred. That is, avoid stocks
that keep burning me!
More gudelines to follow regarding:
a) Holding period
b) Technical indicators
c) Industry and sector
d) Hedging
e) Earnings
Monday, December 14, 2009
Sunday, December 13, 2009
Back in the saddle!
After a brief hiatus, most of 2009, I am back to the world of active trading. This will allow me more time to concentrate on the wisdom of the markets and to tune off CNBC.
During my first serious attempt at trading, CNBC was my financial guide. I listened intensly to the different shows, their hosts and their guests in an attempt to dicipher what was happening in the market and why it was happenning. After not listening to them for nearly a year, I've learned that things are more clearer without all their reporting and analysis.
My favorites were Squak Box, Fast Money, and Mad Money. But now I realize that it was all fast, mad, squak! Occasionally, I still tune in to listen for general themes, but no longer do I listen to them for guidance. I realize now that they are just as confused as anyone else!
This time I will listen to the things that matter most: financial reports, economic indicators and the most important of all - stock price! Perhaps this time I will be able to hear the message behind the numbers - now that I am no longer clouded by the noise of CNBC.
Don't misunderstand my message: CNBC matters, but only if you are a reporter, or intested in being entertained. But, when it comes to making informed trading decisions - tune them off. They were not able to identify March 9th as the turning point - as no else was, but they sure made it hard to convince myself that it was a turning point in the market and that market sentiment had changed.
So what I am investing in now - or rather, what am I speculating in right now?
My current holdings are Valero, Nokia, and MBIA. The rational? Price. All of these companies have prices that have dropped while the market has increased substantially. While that is always a recepit for disaster, I think this is a world of opportunity. The theory is that is the market collapses, these stocks have already paid their price and the downside is limited. If the market continues to rally, these companies should benefit from an improved economic condition.
Prices:
VLO 16.54, stop loss 14.03, target 20.5
NOK 12.59, stop loss 8.5, target 16.26
MBI 3.64, stop loss 2.19, target 6.69
The next stock that I am looking to acquire is NYSE Euronext (NYX) but I am looking for a small pull back to the 25 range from it's current 25.6 price.
During my first serious attempt at trading, CNBC was my financial guide. I listened intensly to the different shows, their hosts and their guests in an attempt to dicipher what was happening in the market and why it was happenning. After not listening to them for nearly a year, I've learned that things are more clearer without all their reporting and analysis.
My favorites were Squak Box, Fast Money, and Mad Money. But now I realize that it was all fast, mad, squak! Occasionally, I still tune in to listen for general themes, but no longer do I listen to them for guidance. I realize now that they are just as confused as anyone else!
This time I will listen to the things that matter most: financial reports, economic indicators and the most important of all - stock price! Perhaps this time I will be able to hear the message behind the numbers - now that I am no longer clouded by the noise of CNBC.
Don't misunderstand my message: CNBC matters, but only if you are a reporter, or intested in being entertained. But, when it comes to making informed trading decisions - tune them off. They were not able to identify March 9th as the turning point - as no else was, but they sure made it hard to convince myself that it was a turning point in the market and that market sentiment had changed.
So what I am investing in now - or rather, what am I speculating in right now?
My current holdings are Valero, Nokia, and MBIA. The rational? Price. All of these companies have prices that have dropped while the market has increased substantially. While that is always a recepit for disaster, I think this is a world of opportunity. The theory is that is the market collapses, these stocks have already paid their price and the downside is limited. If the market continues to rally, these companies should benefit from an improved economic condition.
Prices:
VLO 16.54, stop loss 14.03, target 20.5
NOK 12.59, stop loss 8.5, target 16.26
MBI 3.64, stop loss 2.19, target 6.69
The next stock that I am looking to acquire is NYSE Euronext (NYX) but I am looking for a small pull back to the 25 range from it's current 25.6 price.
Subscribe to:
Posts (Atom)