I get lot of emails from readers about scans, specific chart patterns or entry and exits. All these things are about tactics. The more critical thing in trading is basing your trading strategy on a core proven concept. If the core concept is sound and based on proven anomalies rest is all about tactics. Tactics is the easy stuff.
Everything that is traded here or discussed here is based on core ideas like historical breadth analysis, factor equity selection models, historic precedent analysis f biggest winners in market, proven anomalies like momentum anomaly and PEAD (post earnings announcement drift), and risk management.
|Market Breadth||Market Monitor|
|Equity selection||Momentum+growth+Event catalyst|
|Momentum Anomaly||Double Trouble|
|Momentum Anomaly||Modified Double Trouble|
|Historic biggest winners characters||Growth stock+IBD 100 and 200|
|Momentum Anomaly||IBD 100 + IBD 200|
|Post Earnings Announcement Drift||Earnings Episodic Pivots|
|Post news announcement drift||Other Episodic Pivots|
|Risk Management||Initial stop placement|
|Risk Management||Position Sizing Calculator|
|Risk Management||Fast exit on losing trades|
|Risk Management||Partial exits|
|Risk management||Exit in to euphoria|
|Risk management||Higher risk on conviction trades|
If you feel these ideas can work for "you" and want to develop "expertise" at trading these ideas, you need to understand the core concepts in detail. The more you become knowledgeable at the core concept you will find it easier to trade methods based on that. You will be able to improve on them. The methods I trade are only "one of the ways to trade" these core concept. If you dig dipper you will find more possible ways to make them work. These are not the only core concept which work. Most of the things that work in he market are well researched and are in public domain. The latest book detailing many core concept that work in market is: Quantitative Strategies for Achieving Alpha (McGraw-Hill Finance & Investing)
Focusing on core concept that work in market is key to building a profitable strategy. As the zen story about learning goes, there are three types of people in the world. When they see a window or somebody shows them a window of opportunity:
- The first kind looks at the scene from the window admire it or criticise it and walk away or close the windows.
- The second kind piss all over the scene from the window
- Jump out of the window to explore more and then .......
they find more windows of opportunities.