- When looking for trend reversals start with low beta names.
- When a new macro trend is set deploy into small cap reversion.
- Do not trade options before 345 if intending to hold overnight.
- Most of your money is made when the markets are closed, through preparation.
- Remember that institutions are cumbersome, press investments until the chart makes a blowoff.
- When a stock closes at or near the high of the day on volume, think about taking half overnight.
- Do not miss a good trade over penny pinching the execution, pick good spots and pull the trigger.
- Scaling is the only way to trade unless a major macro move is on.
- The longer a sector non-leader defies comparable intraday gains/losses the larger the reversion candle will be. (Attributable to ETF rebalancing?)
- Try to determine early on if the issue at hand (stock or market) is in for a trend day or a range bound day.
- Always be accountable for your plan and always hold your plan accountable for its results. Existing conditions factor into the plan, they are not excuses for its failures or successes.
- Fade the loudest crowd in a counter-trender on any scent of a reversal and reversion to the broad market.
- When in doubt, palms out. (Love that, just saw it on Twitter a few weeks ago.)
- Create a risk limit before buying.
- Do not overnight uncertainty.
Wednesday, July 28, 2010
Disclosure. The following list contains some original content, as well as a good deal of material that I simply wrote down because it sounded good. Here's a raised martini to the inventors of the copied content.