Thread by @Tribhuvanbisen

I read all the material available on @markminervini and summarize the key learnings from his trading and investing style, so you don't have to.

🧵on“Keys to winning in the Stock Market”

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#BREAKOUTSTOCKS $VIX

Until the right opportunity emerges, pay special attention to capital preservation above capital appreciation. When a promising opportunity eventually presents itself, be ready to act swiftly and aggressively.

Top three priorities in trading:
1) Preservation of capital.
2) Consistency in executing your plan.
3)When you have these two things mastered, you can then pursue the third, which is superior performance.

In stock trading, waiting is the hard part.
While you are sidelined, reading the latest news or watching the Dow move up may pressure you to make trades you would usually not take. Patience is the key.

Daily surveillance is necessary while suppressing the temptation for action, meaning the desire to initiate a trade, until the right opportunities present themselves.

Conduct intensive research to identify trading ideas and follow those ideas like a hawk. When the time comes to put money to work, the decision is automatic and obvious. To trade like this, in almost a Zen-like manner, you must trade when the conditions are favorable.

Trading should be effortless. If your trading is causing you difficulty or stress, something is wrong with your criteria or timing, or else you’re trading too large. When the market is not acting tremendous and there’s no clear market leadership, play it small with pilot position

Pilot positions accomplishes two things:

1) You will test the market and keep its pulse. Once you get a strong heartbeat, you can step it up.

2)You stay in trading shape. Trading is just like working a muscle; if you don’t work it, it loses strength.

Stay in trading shape by using pilot positions as “sparring partners.” However, don’t slug it out and get hurt with your sparring partner. Instead, wait for the main event and then give it your all to capture the championship belt.

Sacrifice: Must know who you are and what you will be doing- A successful Trader will need to establish their edge

Status: Do you want to be a Hyundai or a Mercedes?

The average trader spends the majority of his/her time in between

Indecisiveness <<<<<<<<<<<<<<<<>>>>>>>>>>> Regret
Should I buyI should have bought
Should I sellI should have sold
Should I holdI should have held

50% win rate is enough

KEY Point: Perfectly executing your plan is the key, not perfectly trading the stock

It is a business of being wrong- How you manage this determines your success.

-Discipline
-Process
-following the game plan

EGO: A destructive force
Do you want to make money or be right?
Don’t focus on $, focus on Process
Money is the Scoreboard, scoring is a by-product of successful speculation.
Focus on
-Being the best you can be
-Implementing sound principles
-Implementing your plan consistently

Master one Style
Multi-tasking hurts development and confidence

Master one strategy w/in that style
Master one tactic w/ in that strategy within that style
Develop a consistent routine (like the military. “SOP” standard operating Procedure”
Become profitable first.

Trading Priorities:

Preservation of Capital
How much can I lose (consistent application of discipline)
Consistent Returns
Superior Results

Have a contingency Plan for every situation beforehand

-Initial stop –loss must be predetermined - must be a function of expected gain “R”
- Take profits Into Strength
-Re-Entry Plan- some of his best trades have been from the previous failure
-Disaster Plan

Reasons many fail to achieve superior Results

Poor selection Criteria
Style Drift
Failure to cut losses
Averaging Down
Let good gains slip or even worse turn into a loss
Seeking Action- trading is supposed to be boring

Position Sizing:

-He has and will put up to 25% in one position
-His goal is to put as much capital as he can into his best ideas
-He will risk 1-2% of equity per trade
-Avg Stop/loss 4-5%
-Max Stop would be 10% (only breached on nasty gap down)

-Smaller positions if stock is thin
-All you have is your entry- Your stop is only as good as you are at setting it.
-Max Positions – 12 (unless they r small caps and he has smaller positions)
-In the ideal situation, he can have 8 positions- fully margined.

Must do your best to take emotion out of play

Have a plan and contingency plan

He would rather lose following his plan than win outside his competency

He uses no indicators: Focus only on Price, Volume, and a few MAs just for reference.