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“I trade and invest over different time frames with different objectives. Sticking with the original objective has been difficult…”

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I trade and invest over different time frames with different objectives. Sticking with the original objective has been difficult. Too easy to turn a losing short term trade into losing long term investment. I don’t get out of losers fast enough but I do let winners run though I scale out on the way up.

Your exact strategies and time frames?

Trades: My time frame is 2 days to 2 months, more or less a swing trade My entries are typically technical. I look for a 2nd retest of support on “recovery” trades but I will often enter on the first test of support in a continuation trade. I set a stop loss based on the lower edge of support minus the ATR. I usually set 2 upside targets, one just below the first lower resistance level and the 2nd on the next higher one. I look for a reward/risk setup of 2.5:1 or better from first target though if high conviction, I might enter with only a 2:1 reward/risk. I do better on continuation trades than recovery trades but have had some big wins in recovery trades so I keep doing them. I don’t do as many continuation trades as I probably should mainly because by the time I identify the opportunity, the stock has run up a lot already. When they fail it is because they don’t hit targets and continue downwards after a bounce. With continuation trades, there have been plenty of cases where I have gotten in at a top. “The trend is your friend until the bend at the end” and sometimes its hard to see that bend coming. Usually it happens moments after I enter the trade.

Investments – time frame 6 months to 2-3 years

Core holdings must have strong fundamentals: Growing profits, strong free cash flow, low debt for industry, not overvalued (use two sites to determine this. Dividends preferred but not required. I am NOT diversified across all market segments but try to stick with the segments that are in favor and rotate to new segments as they go out of favor. This is difficult sometimes because

Speculations – I am not afraid to jump on high risk opportunities in hot segments. Recently closed out a bunch of uranium related investments that turned into trades after prices peaked. Still in a couple since I suspect they will do well in the long run. Right now I have a significant position in energy companies in the belief that energy costs with sky rocket in 2022. If this new variant quashes demand for oil, that thesis will be wrong though it still may be right for natural gas.

Hedges – I am not as heavily hedged as I should be given current market conditions. I almost bought January IWM and QQQ puts on Wednesday but held off believing our big correction would be in late December (wont bother you with details). But it looks like the market has had the last laugh, looking at this mornings futures. My portfolio does hold some gold, sliver and platinum ETF’s along with miner/royalty companies. Most current hedges are focused on inflation, not a market correction caused by COVID or geopolitical events.

Markets – I have brokerage accounts with Interactive Brokers where I trade US equities plus those in Canada, Australia, UK and have been setup to trade in Japan but have no open positions there currently. I also have an account with TD Ameritrade.

One of my biggest problems is I hold way too many open positions, something I am working on correcting. I am retired and do spend about 3 hours a day keeping an eye on everything, though sometimes this had lead to over-trading, another problem I have had to work on.

Thanks,

Lloyd M

That’s too much. Too much all over the map. Give a good read of the resources here. Those resources are a whole other perspective.


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