Call me lucky, I am 100% cash, and I am not giving that up like that !

Am I lucky ? Yes I am, but thanks the risk management and the discipline I have put forward in the past months. I even was quite frustrated at the end of july, when my stops were triggered. I went on holiday for the first 2 weeks of august, and when I came back, I had to smile. (sorry for those out there still in long positions).

We are in a choppy market since march, and what I learned during that period was risk management & position sizing :

  • A: How much do I want to risk on a trade ?
  • B: What is the stop loss level I see for a trade ? Are we in volatile markets, lower the stop loss level to avoid being stopped out due to large intraday moves. (this means less shares to buy in order to not risk more money on a trade that you want.)
  • Given A and B, calculate the  number of shares to buy.
A lot more resources on this is available on the net. http://www.turtletrader.com/money.html can be a start for your search.
The next area I want to improve is identifying the trend.
Found the solution after 5 minutes. Or not … ?
Is the trust/trend model  the solution ? Or just the 50d and 200d moving average cross-over ? Or 5d and 20d ? Or weekly crossovers, or monthly ? Right, plenty of choice, but which one fits my personality ? Still don’t know for sure. Analyzing my previous trades do not give a complete answer yet. You do have a trading journal, do you ? This is extremely valuable information.
I know I am not a day trader, and current environment is way to unsure for me to enter into trades. So, it is an excellent time for studying, improving my strategies, prepare for re-entering the market. Not being in trades is interesting. I am currently observing as an outsider, have defined my strategy to re-enter and have to pep-talk myself not to enter the market when there is another 4% day up. Nope, need the discipline here.
I probably will be posting some analysis, but that does not mean I am entering the market again.

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