Monday, December 9, 2019

my simple trading system (09 DEC 2019)

this is my simple trading system which i found to work for me over the years ...

*my buy criteria: i buy when the following happens:

1. the macd histogram is below the 0 - line
2. if the current price is higher than the most recent price bottom
3. i buy on breakouts ONLY when adding to an ALREADY EXISTING position

*when do i sell? i sell when:

1. i cutloss just below the most recent bottom
2. my trail stop is hit (this means that my position is already net positive)

*what stocks do i buy?

1. index stocks
2. stocks that have a current story as disclosed in the edge website ...

*what do i do when i start buying a stock?

1. when i buy, i buy in tranches .... when i see a stock fulfilling my buy criteria .... i initially buy 1/3 or 1/4 of my allocation for a particular stock ... then i wait and observe ...
2. on subsequent days ... when the price of the stock advances... i add 1/3 of my allocation ....
3. i add my last 1/3 allocation when the stock advances some more ...

* what i don't:

i dont think in terms of/i dont use:
1. trendlines
2. channels
3. patterns (with certain exceptions)
4. fibonaccis
5. cost averaging
6. elliots
7. parabolics
8. retracements/dips
9. "bull'' or "bear" markets

i don't
1. like to catch falling knives
2. predict the future
3. set tps
4. do blind/naked trading: no plan, no trade (there are exceptions to this rule)
5. care about the dow nor the p6
6. daytrade (ok ... in exceptional cases ... sometimes i do daytrade)
7. shortsell
8. over analyse: i try to always remember  ... i make my money by trading ... not by analysing
9. like to keep things complicated nor think that the more sophisticated or more technical sounding the better
10. try to fool myself and be in denial when things dont go my way

what is a "short term trend follower"

i have other rules but those are minor details na ... the ones above are my main rules ... happy trading! good luck!