After careful consideration, I have decided to try a new investing strategy. I’ve found that I do not have time to use the traditional rules. My rules will have to fit my time constraints. In other words, it has be easy and simple enough to do during my lunch hour.
Here are my Lunch Break Investing Rules:
1. Only buys stocks on the watch list.
2. Must be trending upward.
3. Must have a trending sweep of at least 10%.
4. Buy only at the bottom trend line.
5. Set a loss limit (2-3%).
5. Set a trailing stop loss to 8% below the bought price (dollar amount on the stop loss, not percent)
6. Set a profit limit (5-10%).
6. Allow the stock to trend upward until trailing stop loss is activated.
7. Never break any of these rules.
8. Adapt my strategy as needed.
Over the next several weeks I will be expanding on each of these items. I will also concentrate on the automation and mobile techniques.
Here is my full confession to my horrible mistake. I did it again! After careful consideration and research, I bought 200 shares of a nice pharmaceutical company. I followed my rules:
Added it to my trading journal
Calculated my Profit Limit
Calculated my Loss Limit
Set my alerts for both profit and loss
The stock did just as I expected. It hit my profit limit. As always, when my iPhone dings it’s ding of profit, I cheer and do the “the profit dance”. But! I didn’t sell. The whispers of greed said, wait it could go higher. I missed the word “could”. Yes, dear reader, the spirits of trading punished me for not following my own rules. The stock dropped. My iPhone mournfully sang the tune of loss and I frowned and did the “loss shuffle” to my computer. It touched the loss limit, but didn’t go below. I was safe. I now promise the trading spirits that I WILL follow my rules and sell when my limits are met. Again, I have learned my lesson the wrong way.
Thanks for reading, check back later for a more light hearted and happy post. I promise!
Picking individual stocks for a portfolio is not for everyone. If you are interested in investing, it’s worth the experience. Give it a try and if you love it, keep doing it. If you don’t love it, get out and find a different investment strategy like money markets or mutual funds. For an investor to really make money in the stock market they must have a passion for it. The stock market is a roller coaster with ups and downs. When you go up it’s the greatest feeling, elation with just a tingle of fear that it’s all going to crash. When it does crash, and it always does, it’s a sickening feeling that ties your stomach into knots and makes you doubt what you are doing. The doubt is the killer and passion is the defense. If you have the passion and excitement, then you too can make money in the stock market.
