My trading style is a work in progress that continues to evolve over time. As I discover a weaknesses, I put strategies in place to address the issues. The following is a problem that would drive me nuts. After I would sell a stock and move on to the next hot one, unintentionally I would forget about the one just sold. At some point in the future, I would check its price.  Often it would be higher, sometimes much higher than the price it had been sold.   Some would say that I should not have sold it in the first place. Maybe I shouldn’t have. Maybe I should have. I believe that the mistake was not in selling the stock, but in not buying it back.Â
I didn’t buy it back, because maybe it was a health care stock and now I am into consumer stocks or maybe it was a large cap and now I am into small caps. There are literally thousands of stocks available and it is very easy to get distracted. To address this issue, I have reduced my stock universe to around 30 stocks. Occasionally a new one will be added and an old one will get the boot.  Some of the stocks I trade as a basket, so in reality my universe is probably closer to 15 stocks. I have also narrowed my focus to primarily commodity stocks and a couple of tech ETFs. This has many benefits, but mostly it allows me to really learn a sector and how it trades.  It also reduces the probability of missing a run in a stock that was recently sold. Continue reading “Trading Style Discussion & Silver Wheaton: The Best Silver Play in Town”