On a personal note, after learning about technical analysis, I have purge my stock to let go of the old mindset and apply the new effective system.
Time for execution. Practice and practice until mastery is attained. It will be "Plan. Execute. Reflect"
I decided to shift to reading the blog of another successful trader who has the setup I prefer: part-time and trend following. I got into that conclusion after I read about how much portfolio you should have to earn comfortable. Small trades for now when I haven't reached that desired portfolio.
It starts with a post on the career of Nicholas Darvas. He was a dance foremost then trader second. He was dancing all over the world when he earned $2 million. But his quotable quote includes: " I am the captain of my ship." And goes on to share who he relentlessly study until he got is own style.
Different trading styles and styles, Trading 212 shares on chart time frames
- for trend following: daily >> weekly >>3 to 6 months; low maintenance
- for breakout trader:
- for swing trader: 3 every 3-4 hours
- for day trader: 10-15 mins char; requires more attention; high frequency trade
ZF shares that trend following
- easy to learn and master
- does not require a lot of indicators
- uses mainly 20/50/100 MA
Elements of Trend Following as derived from Ed Seykota
- initiation
- holding
- liquidation
Pitfalls of Trend Following as shared by Kay Sebastian; she begins that it is not for everyone
- initiation
- good periods of the market has little movement and may bore trader
- never getting the earliest entry
- goal of trend following is to enter the trend not finding the lowest of lows
- holding
- getting stuck in consolidation; other traders like momentum are gaining more
- hanging on to large profits; when your profits, greed creeps in
- liquidation
- cannot sell at the highest level
Key to trend following
- asymmetric nature of trading; upside is way higher than downside
- trend followers manage their downside through position sizing and tight stop loss but trend follows do not set target prices
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