Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Saturday, June 28, 2008

Strengths and Weaknesses

Strengths

1. Predicting stock movement - thinking through everything.
2. Fundamental analysis and long-term trend analysis.

Weaknesses

1. I can't use stops for Swing trades. So I should only VERY RARELY swing trade.

So far, I've been successful mostly at intermediate-term call options (3-5 months out), and with long-term predictions. Swing trading, because of the Stop requirements, doesn't work for me. I don't like to follow stocks every day and cut losses as they go down. Not my style. I am good or can be good at analyzing sentiment, fundamentals and technicals carefully, deciding what will happen, and going long or short for a while.

2. Emotional attachment to AAPL.

Great company, but sometimes a bad stock - like any other. Don't let it become more than 30% of your holdings. Recognize your weakness.

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