How We Trade
The methodology and trading style presented here is NOT day trading. Our holding period for any given position will be anywhere from 5 days to 3months. We seek to profit from major moves of 20% or more. Please understand that what goes on this blog is purely speculative, and research and development of strategies are not a recommendation to buy or sell securities.
When we catch a good run we buy higher prices. The initial trade is usually a small percentage of total portfolio value. As the breakout progresses, the position is added to at higher prices.
The selection of stock are based from factors ranging from volume, moving averages, and of course, fundamentals. A company must meet a rigerous criteria based on earnings, debt to income, and growth potential.
The focus is on price action & volume against the back drop of the sector the stock is in, and the market as a whole. There must be congruency in order to pull the trigger. The technical analysis used is very basic. We have developed “Critical Price” theory which suggests a certain price in which the market pays attention to, and we either go short or long based on the present action. We don’t cloud our minds with useless indicators. There is so much false concepts of technical analysis. It is highly subjective, and often times the application is misused. Keep in mind ALL indicators are based off of PRICE ACTION and VOLUME, so most indicators are lagging. Why use them?
The author, “sees something” that you don’t. You can’t possibly enter that trade with confidence. Don’t get me wrong I’m a victim of my own delusions as well. I see things in my charts once in awhile. This is a personal journey to overcome my own biases about the market and to truly see objectively. We keep things simple, we buy the breakout, the high price, and the exit.
Be sure to Check out Traders Education category for trading theory.
loved your trading summary – good luck!
yes, yes, and yes KISS principle; if only I would have stuck to it
I like your stategy. Keep Focused. Good Luck.
I like your approach to trading.