These days I'm all for non-sexy low beta stocks, but often failed to act, except GE... I missed DD when it broke out of consolidation in early May, missed NOC in late April after a huge cup and handle. I'm looking at NOC, seems to be forming a pennant.

    As usually one of those

    Posted by foody518 on 27th of May 2021 at 05:22 pm

    As usually one of those kinds of stocks - Just got back into T last week after the Discovery-Warner merge news dropped the price. There may have been some insider buying post-drop, too, massive volumes on those days. 

    If you're looking for low-beta

    Posted by rjdst on 27th of May 2021 at 04:52 pm

    If you're looking for low-beta performers, check out DHR.  It's a GE-like company.  I missed the recent break-out, but picked some up on the retest with a stop just below the 50MA.  The past several months were more volatile than normal as it consolidated, but historically it's a wealth-building snoozer.  

    Can you give some input

    Posted by foody518 on 27th of May 2021 at 05:17 pm

    Can you give some input on how you manage those low-beta stocks that you intend to stay in longer term? Trailing stops at a longer MA such as the 50 day? Partial sells at really peaky RSIs? I am having trouble staying in things...

    I wish I had something

    Posted by rjdst on 27th of May 2021 at 09:31 pm

    I wish I had something definitive to share, but there are so many variables - positions size, entry point relative to support, relative market strength (i.e., likelihood of bouncing back), what the rest of the portfolio is doing.  I have two positions - a  large one in my IRA; a smaller one in my trading account.  I don't watch the IRA.  I'll check on it if the overall market starts to show a strong downtrend.  For that, following the 401k systems here is a good catalyst to think about moving in/out.  

    For the trading account, it's more dynamic and I think that's what you're asking about.  If something isn't contributing to profit, it gets fired.  So the guidance that Matt & Steve offer works - identify support and resistance.  I ask myself how much I'm willing to lose if my thesis proves invalid.  If the next support (a major trendline, 50MA., 200 MA) is below that, I either reduce position size or don't purchase and move on to something else.  9MA is a bit tight for me for a low-beta, slow mover.  But that's me.

    I think one of the biggest challenges that many traders face is the desire to make gains quickly, not  so much to create wealth but to experience validation.  The main reason people day/swing trade is because they think they can outperform the buy & hold strategy.  Positions are larger than they should be to prove the point, and it becomes tempting, if not necessary, to exit prematurely.  I've suffered through that, and still occasionally do.  Meme stocks don't help as they create unrealistic expectations.  Who wants to settle for 10% a year when you can make 48% on Wednesday....?  Only one of those is sustainable....

    When I sacrificed my ego to the concept of slow, steady wealth-building, I started performing much better.  I was more objective and I started to show control over outcomes.  And I began sleeping better.  :-)  

    If I were to give advice to my earlier self, it would be to set a very reasonable goal relative to my account size.  Say, $500/month.  For a year.  When I can do that consistently, I'll have earned the right to aim for $750/mo, then $1K/mo, then a little more.  If the first goal seems a little underwhelming, you have selected it wisely.  ;-)

    The holy grail for a trader isn't yolo gains; it's trading behavior that consistently returns predicted outcomes and repeatable gains (says me to my earlier self!).  

    Some good advice in this

    Posted by fundamentalvalues on 28th of May 2021 at 07:37 am

    Some good advice in this post from 

    rjdston 27th of May 2021 at 09:31 pm

    The psychology and realistic goal setting are so important. Knowing yourself and how you will behave over time is huge. I do a trading journal entry every day. I have a plan before I begin the day so I know what I'm doing when it is time to do it. 

    Setting orders with target prices in advance has helped as well, then I can adjust them depending on what my time frame and risk/reward possibilities are for the position. Trim and trail. Not interested in giving back profits. If I'm bullish long term, I will sell some keep some (trade around my core). Lots of ways to do things. Best way I can put it is that if you are a sports fan, there are a number of ways and plays you can call to win a game. If you are meeting your goals then that is what matters. I used to get caught up in selling something only to see it go higher in later sessions. Bottom line is, if it was a day trade, it was a day trade. There is always another one. No fear of missing out. What was the goal in mind for the position? 

    I struggled early on in the game because I was inconsistent with my strategy and also took outsized risk (I set my goals too high as someone else mentioned) given my account balance. It led to some large drawdowns and times of large gains. Kind of like a boom/bust situation. Fortunately, I had set a particular amount of capital aside for the trading account and I worked at it until it was back up. I was also still working at the time, so while it wasn't fun going through that multiple times, I was learning.. Any trader that has stayed in the game for years I think has gone through something like that, it is kind of a right of passage. Everyone makes mistakes, though successful people learn from them. 

    My long term accounts (IRAs) are a different strategy than my income producing trading account. 

    Another thing that is super important is that I specialize in my strategies. I don't try and do it all or know about everything under the sun. If it is something I have no interest in, then I stay away from it. My strategies are both fundamental and technical in nature. If I don't have both, I'm not interested. Also, having too many positions is too much to track for me and too difficult to manage when trading. At one point I thought I could manage 10 positions, then I went to 7, then to 5 I focused on. The number got much smaller, especially for my focuses during a particular day. My results improved a lot after cutting down all the unnecessary extra work. I have a friend who texts me regarding the next best thing every other day. I may look at an idea or two, but will usually know pretty quick on whether I can take something else on at the moment. Saying "no" can be more important for me on a given day in order that I can stick to my plan. 

    Let us remember why we have this holiday weekend. Memorial Day  is a federal holiday in the United States for honoring and mourning the military personnel who have died in the performance of their military duties while serving in the United States Armed Forces.


    Really appreciate these insights from

    Posted by foody518 on 28th of May 2021 at 11:04 am

    Really appreciate these insights from y'all. I am trying to fight the FOMO from not knowing what I was doing until a few months ago and seeing these awesome gains that could have been had from just getting in around April 2020 and riding easy uptrends. The choppiness of the past few months has not given me confidence that I can stay in positions from breakouts that were not following through, skittishness from this sense that we are perhaps on the last legs of the current bull run, etc.
     
    Taking partial profits earlier and being more consistent about deciding what my absolute get out of a position price level is before I enter a trade has been helping (maybe I should do less of trying to catch bottoms, heh). Totally okay with making small gains over time and not needing to hit home runs. 

    Well stated 

    Posted by steve on 28th of May 2021 at 09:11 am

    Well stated 

    Thank you very much for

    Posted by lapri24 on 27th of May 2021 at 09:54 pm

    Thank you very much for sharing your thoughts. 

    I know I have to rewire my thinking. Wanting to strike big (for my account size...) in a short period of time often ends up in strike down big and loss of sleep.  Trying to 'trade', I'm coming to a conclusion, is not me. Building the wealth, that's much better way of framing.

    I’m with rjdst, keep a

    Posted by cape_rover on 28th of May 2021 at 07:31 am

    I’m with rjdst, keep a core acct for the long term.  Trading acct for short term trades.  I’ve had some success trading low beta stocks that are in a channel.  Very visual to sell at top of channel and buy at low of channel.   You dont hear of many self made billionaires tech traders for a reason IMO.  That is why I keep a buy and hold acct.  TA does help you sleep well tho but timing both the perfect exit AND the perfect entry AND allocating the  right amount of $ can be tricky.  

    There is a guy on Twitter called Puru Saxena I have enjoyed following.  He is into high beta which is a different story but he leaves the position alone if EMA is above ~65EMA (long term trend)and hedges when Under the 65EMA AND when 5 and 7 EMAs flip (short term trend).  You could do something similar with buys and sells based on 5/7 EMA flips when stock is under 65EMA.  Above 65EMA just hold.

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