Wow, hello Michael, thanks for your interest! I will say that my most obvious biggest problem with the way I trade is hanging on to losing stocks way too long. Number two (or co number one) is not protecting well from downside risk. Third is buying stocks basically “on a hunch”. Like I could really pick them! I’m looking forward to a more stable relationship with my investments.
I’ve seen some trend followers traders here in Brazil selecting their stocks to trade finding the ones that had the most strong trend in 26 weeks (and some others filters). In your opinion, is this a good time window? Or should be less, 3 months or larger, 1 year?
Hi Michael, I would probably say my biggest challenge is knowing exactly when to get out of a trade. I have lost a lot by not setting a stop loss on certain trades for fear of whipsaws and exogenous events. Seems like as soon as I sell the darn thing turns around and heads back up.
Probably also need to understand better which stocks to trade and which ones to leave alone so I know when to trade big and when not to. I am about down to trading MSFT and indexes for now.
My overall strategy is to swing trade pullbacks (especially from new highs) on uptrending etfs and stocks (see TROW). I have an Ameritrade account of 100K on which I target 3 to 5 percent a month and use Think or Swim to look at candlestick charts and determine support and resistance.
• I always chart a 20 SMA and a 50 SMA and only take trades above the 50.
• I look for the 20, 50 and 200 SMA to all be stacked positive
• Typical hold times are 3-4 days to 3-4 weeks
• Most trades are short puts 1 to 3 strikes OTM depending on my conviction
• Will buy put call options 1 strike in the money if overall market, sector and stock is bouncing up.
• I am willing to exit most or all of the position after a 10 to 25 percent move up.
• I check IBD and Vectorvest for stocks with good fundamentals.
• I also will also trade breakouts on good volume (see RNG)
I do have another account in which I try to find etfs and boring stocks that I can hold for longer periods with a trailing stop. Hope this was not too much information but I was not sure if you wanted specifics of my trading plan. Some of my favorite tickers right now are: MSFT, AAPL, CRM, AMD, LULU, PCTY, GPN, TDOC, SPY, XLK, TQQQ.
I would stop that. A different point of view is here.
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Hello Michael, my name is Arian and I am a long time reader of your fantastic books on trend following trading. I have to say by biggest challenge currently is picking the best futures contracts to trade in terms of length to avoid having to continuously roll them over. I am currently trading 12-20 contracts to avoid getting out of position when the contract expires and having to re-enter the trend. I currently trade e-mini contracts and I am finding out that some commodities (mainly agriculturals and natural gas) just don’t get triggered on a buy or sell order placed in a 12-20 contract. I guess for some commodities it doesn’t make much sense to have such long term contracts. I have been trading for a few months but I have methodically followed a long term trend trading system that has a clear answer to all the important questions you mention in your trend following book. What do you think is the best solution in terms of contract expiration time for a long term trend following trader? Please keep writing those fantastic books they are lit candles in the dark caves of the trading world.
That’s not the issue IMO. Rollovers are normal. I help clients with rollovers, but I am concerned when I hear you say your goal is to pick markets in a way to avoid them. See FAQs and Markets.
My biggest challenge is trying to manage my family’s trust account while working a full time job and trying to follow the Biblical Responsible Investing method, where we don’t invest in anything that goes against our beliefs.
My goal is to grow the account safely with little screen time, but still either be at the stock market average or better, but still protect it against the corrections.
There are a few BRI ETF’s that I like and have traded options from time to time.
I also think it would be nice to have a shorter term trading method that I could use some of the cash in the trust to generate some shorter term profits and then reinvest those profits into more shares of the ETF’s I am holding. Not sure how realistic that is, but it would be nice.
I like just watching a few symbols at a time and investing in just a few at a time to keep things simple.
I enjoy watching the markets, but I don’t want to be obsessed or stressed out over watching the trust start losing money.
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The classic text ‘Reminiscences of a Stock Operator’ by Edwin Lefèvre PDF
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