Hello Friends...
One of the driving forces behind my investment interest and strategy is capital preservation. I've watched, several times now, as investors put money into great investments only to be met by an overpowering market... which corrects or even crashes. In 2008, I watched several people lose over 30% of their portfolio value... all the while being told to just hold on... think of the long term, etc. Unfortunately, some of those investments never did recover... while others are now, in recent weeks, experienced similar hits again.
I developed a Weekend Investor Strategy that still focuses on long term results but recognizes the ebb and flow of the market... and doesn't want to get caught in a tidal wave of poor economic news or emotion that drags the markets to yearly lows. It has proven to be quite successful, even in 2011 with all of the uncertainty and losses. Even though the S&P is down approximately 7% year-to-date, the Weekend Investor Strategy is up for the year.
In the early Spring, I began experimenting with an Evening Investor Strategy. The focus is similar... just with more of a trading focus than longer term investment focus. Nevertheless, the design behind it is to allow the investor to look once each evening, make a simple adjustment, and profit over the course of weeks and months.
I'm still developing this strategy... however, I'm at the point of making a few changes. So, here's the simple rules going forward:
- I purchase stocks @ specified prices (I use a legend I've created).
- I do not purchase stocks that are gapping up 2% or more pre-market (easy to see on US stocks with http://money.cnn.com).
- I place stop orders on all my positions (using a legend I've created).
- AND... here's a significant change... I only place my stop orders going forward at the end of the day... in the evening. Therefore, I may purchase a stock that then falls all day and closes lower (increased risk). However, conversely, I also may purchase a stock that falls beyond my stop loss... and then runs up and closes up several percent by the end of the day (increased reward).
It's important you know these criteria when visiting this site. These are not recommendations... they are merely reflections of my thoughts and actions... and are meant as entertainment, not advice.
Hi I have been looking at your post for last couple of weeks and think you have some good stock selection and methodology for entry and stop losses. I noticed that last few trades you put, got you in and exited immediately or within same day. It is frustrating. From reading your post it looks like you are adjusting your trading style but i see that you are not going to put Stop until end of the day or next day. But you still put some big number stop loss(like 5 yo 8% atleast) in order to make sure if you get entered, don't become too big loss (even intraday)
ReplyDeleteThanks for dropping by and leaving a comment. Yes, the same day frustration is what has led to my change... more focus on the "Evening" investor who can only place trades once every day. I did a lot of back testing and it is extremely rare that the stocks I'm targeting will take a big hit... remember, they have to go up first to meet the order price before going down. Usually, on the large down days, they simply drop... and drop.
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