My trading philosophy and general thoughts
Patience - dont go for homeruns every day, its a very long year. Usually 5-10 trading days will decide the performance of the whole year.
Wait for great opportunities to come to you and never chase or force trades.
Number #1 goal should always be to protect your portfolio, no business can be successful without working capital.
If things are going bad, always back off and take a little time off. Dont force the issue.
If unsure of market direction, always start with smaller positions.
Dont average down on long plays.
Always have a plan before every trade is initiated.
I have no problem day trading a double or triple position if I absolutely love it, assuming this position will be closed end of day no matter what. (extreme disciple is need for this)
On long term short plays I like to time average (10-15% once a week until a sufficient position)
If adding to short positions based on price, use 15% price intervals.
Dont take significant positions in stock that are unfamiliar.
Try to understand their trading patterns first.
If something works, dont stop doing it (Example - I have shorted EPEX 14 times at 9.50 and covered for an average gain of 1/2, not 1 single loss)
In general dont start with more than a 1/2 position in a short play and leave room to add, unless the play is very short term (1-2 days)
Limit your loses. Never be willing to lose more than you are willing to gain.
Never let a reasonably small loss turn into a big loss. (hard to recover from those financially and mentally)
If you are hot, increase your staring position slightly, but first sign of trouble back down immediately.
Dont ever buy hype.
Short strength and cover weakness using the 3 day rule (very general rule - stocks and markets run in 3 day trends, so short on 3 day and cover 2nd or 3rd, unless you are playing hit and run like I am now)
Always sell the news if the stock has already run up prior to the news.
Never long pos pigs for bounces, be patient and opportunities will present themselves.
Dont try to catch a falling knife.
In the end, only 1 thing matters - VALUATION. never forget that.
Always control your portfolio, never ever let it control you.
Diversify and never overextend yourself. Understand the risk of margin.
Buy the Champs (value plays) and Short the Chumps (pos pigs)
A combination of these will make you sleep a lot easier at night.
Many Happy Returns
Michail |
