A big part of this process is to review my trade journal of all the ideas and notes that I have accumulated over the course of the year. I highlight the best ideas and then transfer those as the first new entries into my next year's journal. This simple exercise has been one of the most helpful to me as an ever-improving investor.
Here are some bits of knowledge that I found most relevant from the past year:
-The most bullish thing a stock can do is go higher
-This is not a bearish setup:
-Stick to solid intermediate-term trends and avoid overtrading. Short-term thinking and overtrading are the major hindrances to otherwise successful strategies.
-Counter trend moves are violent and designed to shake you out. Be aware of that and don't fear, stick to your stops and levels.
-Corrections/Pullbacks reveal where the strength and weakness is in your portfolio. Your weakest stocks will fail and once the correction ends you will only be left with the best.
-Pay attention to Monthly trends and bases. Look for setups that have formed multi-month bases within a larger uptrend.
-"All Stocks are bad, unless they are going up"; if your stock is going down there is a problem. Its a bad stock and you need to respond to that.
-Never average down.
-Ignore news and predictions. Nobody can see the future regardless of how smart they sound.
-The goal is to buy a stock "right", hold it through an entire move, and then sell it "right". Big moves take time.
-Don't limit your upside on a trade by taking early profits.
-Run winners. Don't gamble with loses, cut them.
-Bull markets see regular leadership rotation. Be mindful of where money is flowing from and into.
-Give trades plenty of room to develop. You don't need to catch every wiggle in the market to be successful.
-For intermediate-term trends, trailing stops should be no tighter than the low of the last 8-10 weekly bars (50 Day lows). This level should also be below the rising 20 WMA and a previous supply/demand area.
-My personal sentiment becomes more negative the closer my stock gets to its stop. Yet I find that if I override my predetermined stop it usually turns out to be a poor move. Anticipating a stop and having one actually trigger are not the same thing. Let stops play out regardless of your emotions.
-A stock will almost always make a "shake-out" type correction right before a big move will occur.
-No single position should hold special importance over the system's long-term results. Do not deviate from the overall strategy because of an emotional reaction to a single position's movement.
-Your backtest didn't factor in the current news or emotions, it simply took the price action as it was. Your next entry or exit should be no different.
-Always pay attention when a stock does the opposite of what you (and others) "expect" to happen. Some of the strongest moves occur when sentiment is leaning too far in one direction.
-You don't have to be right all the time to win big. You just have to make more when you are right and lose less when you are wrong.
-If you get shaken out, don't be too proud to get back in there if the signal re-triggers.
-Your ego has NO place in your investing arsenal.
-Nice Scan for strong breakouts: (using Finviz.com)
1. 5-yr Sales Growth > 0
2. Q/Q Sales Growth > 10%
3. EPS Growth this year > 0
4. New 50 Day Highs
Those are my favorite ideas and notes from 2014. In the coming year I plan to continue to learn and keep an open mind. Undoubtedly this rough list will help me and I hope to add to it as 2015 rolls on.
-This is not a bearish setup:
-Stick to solid intermediate-term trends and avoid overtrading. Short-term thinking and overtrading are the major hindrances to otherwise successful strategies.
-Counter trend moves are violent and designed to shake you out. Be aware of that and don't fear, stick to your stops and levels.
-Corrections/Pullbacks reveal where the strength and weakness is in your portfolio. Your weakest stocks will fail and once the correction ends you will only be left with the best.
-Pay attention to Monthly trends and bases. Look for setups that have formed multi-month bases within a larger uptrend.
-"All Stocks are bad, unless they are going up"; if your stock is going down there is a problem. Its a bad stock and you need to respond to that.
-Never average down.
-Ignore news and predictions. Nobody can see the future regardless of how smart they sound.
-The goal is to buy a stock "right", hold it through an entire move, and then sell it "right". Big moves take time.
-Don't limit your upside on a trade by taking early profits.
-Run winners. Don't gamble with loses, cut them.
-Bull markets see regular leadership rotation. Be mindful of where money is flowing from and into.
-Give trades plenty of room to develop. You don't need to catch every wiggle in the market to be successful.
-For intermediate-term trends, trailing stops should be no tighter than the low of the last 8-10 weekly bars (50 Day lows). This level should also be below the rising 20 WMA and a previous supply/demand area.
-My personal sentiment becomes more negative the closer my stock gets to its stop. Yet I find that if I override my predetermined stop it usually turns out to be a poor move. Anticipating a stop and having one actually trigger are not the same thing. Let stops play out regardless of your emotions.
-A stock will almost always make a "shake-out" type correction right before a big move will occur.
-No single position should hold special importance over the system's long-term results. Do not deviate from the overall strategy because of an emotional reaction to a single position's movement.
-Your backtest didn't factor in the current news or emotions, it simply took the price action as it was. Your next entry or exit should be no different.
-Always pay attention when a stock does the opposite of what you (and others) "expect" to happen. Some of the strongest moves occur when sentiment is leaning too far in one direction.
-You don't have to be right all the time to win big. You just have to make more when you are right and lose less when you are wrong.
-If you get shaken out, don't be too proud to get back in there if the signal re-triggers.
-Your ego has NO place in your investing arsenal.
-Nice Scan for strong breakouts: (using Finviz.com)
1. 5-yr Sales Growth > 0
2. Q/Q Sales Growth > 10%
3. EPS Growth this year > 0
4. New 50 Day Highs
Those are my favorite ideas and notes from 2014. In the coming year I plan to continue to learn and keep an open mind. Undoubtedly this rough list will help me and I hope to add to it as 2015 rolls on.
Please feel free to add any additional ideas you have had in the comment section below or share with me on stocktwits @relativeperformer.
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