Geez! TA is used as trend following, usually a good strategy, or as contrarians, an even good strategy.
The trick is to not mix those strategies: you take the following or the contrarian approach final dot.
If either of your chosen strategy fails, take a sabbatical, analyze the errors, and decide to chose one above the other. Wash, rinse, leather.
How much will one stock ever be as a percentage of your total portfolio?
Usually no more than 10-15%
Nope, sell the errors (I do not say the losers) and let the winners go. If you are unconfortable with one huge position, maybe you shouldn't have entered this one in the first place.
I value my risks on the entry capital, not on current prices.
If I suspect a downdraft, I would sell the position as a whole, never hedge it, never scale down.
Do you daytrade, swingtrade, buy long term or some combo of those?
As a little fish swimming in a school of sharks, I abandonned any trade with an horizon of less then a couple of months. Portfolio softwares have been developped beyond imagination. For me I would say, I can't afford analytic software fees.
Take as a staret that any instrument is analyzed for crowd behaviour: a well designed software can tell you how much money you should throw out as bait for one (or more) signals to be triggered and what kind of a position you should hold to maximize profits. More, these programs are inter-market: an apparently insane trade could trigger a profit on a completely different position. Some of us understand a dual market relationship, AI programs do not care and calculate relationships on any market in the database.
Then, ole statistics, the more you trade, the more chances you have to enter bad positions. If your trades go sour, there will be no help increasing the number of trades: if your trades go sour, your tactical trades are bad, the frequence only accelerates your going out of business.
Only if you are a real trade winner can you increase the frequence of the trades, until such time you are over-confident over yourself and start ... losing.
You will be catched up by un-emotional softwares. These include risk management.
Hence, you will NEVER earn money by simply increasing the number of trades. Well, your broker would be happy if you do <g>.
IMHO, every each individual has his own risk tolerance, knowledge of (some parts of) the market, brilliant ideas (sometimes, just wich to wish to have more of them), time to spend on checking various sources....
at the end, don't ever trade if you can't afford to lose.
Or Mark Twain's, those who can't afford to lose, trade, those who can afford to lose never trade.
All that matters: short-term, swing trade, LT investing: take the strategy that best meets your feelings, time spent, ...
ride your horses, don't jump horses in a race. Or don't race in the first place. |
