17 Years of Trading Lessons. What worked and what did not.
Living a simple life and trading stocks can be done if you keep stock trading simple. You do not need a ton of complex trading techniques, styles and long watch list. For the holy Grail of Trading Strategies click here.
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Trading stocks can get overly complicated. Everyone is always looking for the perfect trading system, the perfect trading style, price action breakdown, price action trading, best trading apps, swing strategy, the holy grail trading strategy. You can skip right over the basics looking for these. Did your portfolio double or triple last year? With the current Dow Price, S&P 500 all time high, if you did not make money, you are doing something wrong. If you are losing money let the professionals trade it, invest in mutual funds. If you must trade, keep it simple.
What should you trade? Should you trade penny stocks, stocks, OTC stocks, options, etfs? I have been trading the market for over twenty years. I authored a book that you can say can Holy Grail Trading Strategy. It goes over a lot of hard lessons I learned, and the basics. My point of authoring the book is so you do not have to learn those lessons the hard way. There are a ton of stocks, ETF’s, options, and currencies to trade. There are a ton of technicals, chart patterns, news, and other reasons to trade a stock or etf. If you are new to trading you have a lot to learn, but do you need to? I am going to tell you no.
I like keeping things simple. Every technical, oscillator, channel, or pattern are composed by average price action. Simple moving averages, stochastics, and bollinger bands are all you need to know. Everything is about averages; your cost average of your trading position is also something you must know about. Everything thing else disregard. Disregard the news, what people are saying, what you think the fundamentals are. Focus on two things, the chart, and your position cost basis. We will get to that.
First know what you are going to trade. The shorter the watchlist the better, overtrading can hurt you. Should you trade stocks, options or etf’s? Trading one or two stocks can be very risky as it could be news about their competitors that drop them. Trading options are also very risky. Trading etf’s are less risky but also not a lot of potential for big gains in swing trades. I like keeping my money safe, but also want big swings. That is why I trade leveraged etf’s. They are based on a basket of stocks and move in swings I like. If I enter at a good point and they continue to go down I am comfortable adding more to lower my cost basis.
My list of leveraged etf’s is the following.
SOXL 3x to SMH
TQQQ 3x to QQQ
TNA 3x to IWM
SPXL 3x to SPY
LABU 3x to XBI
BIB 2x IBB
That is just a brief list, there are a lot of leveraged etf’s. Keep your list short, less time it will take you to look at charts and decide on your trade. Then keep it simple, buy when they are oversold, or breaking out. Sell when they are oversold or pulling back. If your position keeps going down, you should have dry powder to buy more and lower your cost basis. Once you start selling positions because of fear and lose money it will not stop. You will be chasing stocks, losing money every time you let emotions run your trades. Fear and greed move the market, set your emotions aside and make money. Look at my short simple book to learn more. You could have doubled your portfolio last year by keeping things simple.
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