First things first, i haven't backtested my ideas and i understand that without postive expectancy etc etc it really counts for squat. However i'm hoping some insightful views can still be provided by the extraordinary combined knowledge some posters on this forum have to offer. The following is what i've basically got written into my plan at the moment.[/b]
Well you realize this so unfortunately without the ability to test this with past data you are forced to forward trade your ideas.As you will find not ideal.
Note: I'm taking a more fundamentals approach for selecting stocks then using very basic technicals to enter and exit. Mainly trying to use support and resistance to guide me.
1. Stock Filtering (Haven't solidified this section yet, still tweaking)
- Above normal ROE
- Low debt/equity
- Positive Cashflow / share
- Market Cap above $100,000,000
You'll soon know if your watch list is un manageable either too many or too few.
2. Portfolio Management
- Maintain at least 10-30% available funds (Cash and/or Margin Loan)
- Margin loan must not breach a $ level i've set in relation to my position (don't worry i'm nowhere near margin call territory)
This is a personal choice more so than a proven business rule.
My experience is that there are times to be all in-- partly in and all out
The trick is identifying when--- and that can be a single day ( all in!)
I'm speaking when trading in a discretionary manner.
Once you have a tried and proven positive expectancy method you'll have a strict blueprint to follow.--- no or very little discretion.
3. Entry Criteria
- Share price pivot's at support confirmed with higher low's in two trading days following the pivot and reasonable volume
- Share price pushed through resistance with noticeable increase in volume
- Stochastic has turned positive from under 20% level
- MACD Histogram has pivoted at a low and looks to be increasing along with a positive MACD cross looking likely
As you say basic. Nothing wrong with basic in a raging bull market,anything will work.
And you'd be trading longer term. Now longer term will generally mean whipsawing.
Shorter term I'd be looking for momentum.
[ quote]4. Position Sizing
- Fixed Fractional Position Sizing
- Risk: 1.00% of Total Equity
- Max Position Size: Total Equity / 12 (I want the portfolio to hold approx 10-15 stocks)