Trading strategy- Concise version correct as of 28 May 2018

Foreword

I have blogged about in piece-meal fashion on my investing strategy(here and also here) , today maybe will be something like a concise version without explanation. It is done so without illustration because these are concepts i have picked up shared nonstop by traders who share so generously and you can think of them as "big picture" concepts.  I try to write down my thoughts as it helps clarifying it. I will also look forward to penning down my income investing strategy in the near future.

The following are my considerations when i plan my trade after i have screened it through a stock picker or the daily top 50 active counters:

Manage risks

Through position sizing- know your comfort level and plan your stop loss within the comfort level. E.g. if you feel panicky when losses are $500... That’s your comfort zone. Put positions where the losses will not be greater than $500 after factoring in the buffer for your support levels.

Entry Price	Stop Loss price	Quantity of shares	Loss amount
$1	$0.95	10,000	$500
$1	$0.90	5,000	$500

Adjusting the quantity of shares to adjust your stop-loss limit.

Setup for entries

Good setup allows for good risks to rewards ratio. Increase the rate of returns on capital. E.g. break of counter-trend, build up before resistance, etc. ( see here)

Exits

Exit when your trade idea fails, but not when it hits your target price. Exit when the bears are stronger than the bulls in an uptrend, because it might be a reversal of trend. Add some buffer, so you will be convinced fully it is an invalidated trade. E.g the angle of decrease is steeper than the angle of ascend. This reinforces the notion of not holding onto your losing trades.

Scaling up (earlier post)

Scale-up helps to amplify winnings.  Scale up when there is a setup and you have some gains to buffer. This is reinforcing the notion of letting winners run.

Trend is your friend

In an uptrend, the big ups are larger than the bids down. This allows consistent gains to be made.

Betting small when probability is low

Reversal setups and breakout gives a huge return over a short period, but there’s a higher probability of failure. Bet small so you can keep trying