All Entries in the "Trading School" Category
Buy and Hold for the Long Term
If people really understood how long the long term truly was – maybe selling a stock every now and then wouldn’t be such a traumatic experience. When you bought into the gospel of “stocks for the long run,” did you have any idea how long the long run can turn out to be? Exactly 10 [...]
Stock Trading Plans are Personal
I had lunch with a friend last week and he said – why don’t you simply sell after you have a 15% gain in the bag? My response was that you will never have a 25% or 30% winner if you always sell after a 15% gain. He said – it seems like you have [...]
Let Your Winners Run and Cut Your Losses Quickly
Wall Street has many great sayings. One that I try to live by is “let your winners run and sell your losers quickly.” Many people buy into the “letting your winners run” part, because they have also bought in to Wall Street’s buy and hold philosophy. However, unless you are planning on “letting your winners [...]
Now is Not the Time to Listen to Wall Street
In my report last week to my subscribers, I said the following: “Some may recall that last year – our timing on becoming fully invested wasn’t the best. On almost every occasion it usually preceded a sell off. Hopefully this time will be different, but let’s not be too careless.” Based on Friday’s action, I [...]
Buffett on Diversification
Not a day goes by that I don’t hear a talking head on CNBC talking about a well diversified portfolio. Diversification must be a required course in money management school. Here is a commonly accepted definition from the U.S. Securities and Exchange Commission’s web site, One of way of diversifying your investments within an asset category [...]
Stock Market: Put a MACD Crossover on your Holiday Shopping List
In late February, the Shanghai stock market reminded us how inter-related the world’s markets are when its 9% plunge reverberated around the world and concluded with the DOW closing down 400 points. The market recovery started once all three major market indexes (DOW, S&P 500 and NASDAQ) flirted with their 200 Day EMA. The July/August [...]
Using Basket Trading to Get Ahead of the Herd
Wall Street has been advocating diversification forever. I have my cynical reasons why, but that’s a story for a different day. However, in certain sectors diversification is necessary. Gold mining is a great example. I have been trading these stocks for a number of years. Apparently a 10-15% meltdown, when least expected, is part of [...]
Real Money Portfolio – Half Year Stats
This thread tracks real trades in one of my portfolios. Refer to backgrounder for more info. Here are some interesting half-year stats: Closed trades: 31 Winners: 17 Losers: 14 Fewest Calendar Days in Trade: 1 Most Calendar Days in Trade: 98 Average Calendar Days in Trade: 28 Largest Winner: 25.6% Largest Loser: -8.9% Closed Return: [...]
Trading Thru the Housing Blood Bath
You don’t have to be a brain surgeon to realize that housing market is not going to turn around overnight. Even the homebuilder CEOs are finally admitting that this environment “sucks.” Economist Nouriel Roubini has been calling this blood bath for what is for awhile. I haven’t seen him on Kudlow and Company in awhile. My guess is [...]
Stalking a Trade Thru the Eyes of a Trader
I am often asked how I determine entries and exits for my trades. Let’s take a look at a real time example and walk through the process. It is currently 11:00 AM New York Time on Tuesday June 19, 2007. First and most importantly, I determine how much risk I am willing to take on a trade. [...]
