My Old Notes on Trading

  • Do not sit down and enter a position right away- see what is going on first.

  • Do not fight the trend- wait for indicators of a reversal such as increase in volume, technical indicators- double top or bottom.

  • After a successful trade and the stock settles down- wait for it to show you something before entering into the same position as before because you think you are going to miss the "real move".

  • Do not initiate a position at the resistance or support- instead wait for it to break the level then get involved ( do not buy hole numbers or other such levels unless you are adding to a position).

  • If the market is quiet be more selective about trades to enter because you will get jigged out and end up paying spreads and not being confident enough to hold the position even if you are right.

  • Make each trade count- do not enter a position without knowing why you are involved- have a reason: market movement, tops, bottoms, increase in volume, levels.

  • Do not chase a stock as it is moving unless you are adding to an established position; instead, wait for the pullback and when the stock settles down and it looks like a promising trade then get in.

  • Do not get frustrated and try to fight a trend and keep shorting into an up move or vise versa and then decide to flip especially when nothing is going on- be selective, keep your cool.

  • Try to choose one way and stick with it instead of going back and forth, but if you are wrong do not hesitate to rethink your strategy.

  • If you are playing a stock based on hidden buying and selling- not in the book- then be more patient. Take one long position from a good entry point and hold onto it rather than constantly getting in and out- churning.

  • Do not trade if you are in the wrong frame of mind.

  • If you start off the month on a bad note do not try to make it back in one day... have one solid day and build off that.

  • Identify a trend in the market and the sector and stick with it until you see a real reversal- use the pullback as entry points of following the trend instead of thinking every small move up or down is the beginning of a reversal.

  • When choosing tops or bottoms, be quicker to hit out when things go against you because the trend is still holding.

  • Use the 50 day EMA to identify trends in the stock- it will act as support or resistance and once it breaks to the other side the stock should start to move.

  • Stock selection is key- do not get hung up on one stock if you are unable to make money in it.

at 11:14 PM
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