November 2, 2017

Trading Strategy

Trading Strategy

So if I’m going to start getting active in the markets again, I better dust off my old trading plan and adjust it.

I do well in longer timeframes, so I can take more risk and ride out short term bumps.

Generally speaking, I’ll use my Scottrade Momemntun scans to find trading candidates and keep my costs low.

Position sizing is risk based, bet no more than 1% of portfolio worth in each trade. Limit trades to a max of 3 per account. Shares of stock are adjusted accordingly to price per share and max risk per trade.

Other considerations:

  1. Look for stocks with strong trends upwards.
  2. Stay way from shorting (for now).
  3. Place orders after 10:30AM.
  4. Use an 8% stop below entry price, adjust at breakeven.
  5. After breakeven, adjust stops weekly.
  6. Place no trades during earnings.
  7. Keep things simple, use 50 and 200 DMA. Keep an eye on RSI and MACD too. Just look at stockcharts.
  8. Keep a running watchlist.
  9. Hold until stop is hit. You may reenter if the opportunity presents itself.
  10. Update trading plan if needed.

Note: I don’t need to trade to live, but I can trade to build my war chest. It’s that simple, less stress that way.


Money


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