THREAD | 10 Steps to Profitable Trading

The secret to winning big in the market is not to be right all the time but to lose the least amount of money possible when you are wrong.

As long as you win larger than you lose, you will be a profitable trader at the end of each year.
1) Manage Risk:

Learn to trade a manageable portion of your portfolio (only you can determine this number or percentage, it differs for every person).

Always establish a risk/reward ratio before making a trade or investment. Without the ratio, how do you know your risk?
2) Understand Position Sizing:

All traders must learn to know “how much” to trade on each position. Do not overtrade or you will run the risk of ruin. NEVER run the risk of ruin!

Position sizing is rule number one of managing risk.
3) Cut Losses:

Do not allow losses to run wild when the story changes. You must learn to cut losses & understand that losses are a part of the game. Every one makes mistakes and loses.

Check you ego of winning at the door. We are here to make money, not go undefeated.
4) Learn when to Sell:

You must learn when to sell. Selling is more important than buying as it ties directly to risk management. Use stops if you haven’t yet developed the discipline to get out when the story changes.

Sell when the story changes but don't overtrade.
5) Average up in Price:

I will never hesitate to add shares in a stock that is moving higher but I often avoid averaging down.

You want to add shares in stocks that are leading and rarely give you the chance to grab (winners).

Trends last a lot longer than most expect.
6) Have Patience:

It takes years (often a lifetime) to master trading as an profitable skill; even then, you are never done learning or adapting.
7) Buy 52-week Highs, not 52-Week Lows:

Don’t be afraid to buy stocks making new highs. The garbage sits at the bottom of the market along with poor earnings, weakness and further downward pressure.

Buy strength and the momentum moving higher.
8) Ignore the Talking Heads:

Do not listen to the noise, gossip & rumors flying around on TV, fintwit, stock blogs & newspapers. It a surefire route to bad information and clueless advice.

*Skin in the Game*

Do your own research; you’ll come out much further ahead.
9) Understand Technical Analysis:

Fundamental analysis tells me what to focus on (sales, earnings, etc.) while technical analysis provides a visual tool of what everyone has done and may do going forward (bases, support, resistance, etc.).

It's a guide, not a predictor.
10) Control Emotions:

You must control your emotions or the game is over!

Understand you and trade accordingly.

It's the stomach, not the brain that controls your overall outcome.

Lastly, ignore naysayers and trolls & stick to your plan!

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More from @cperruna

8 Aug
1) Thread: 6 Stocks showing a Shooting Star pattern this week.


Pullback warning - perhaps!

Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East, 2nd Edition by Steve Nison
2) $SE - $129.00, shooting star pattern this week, down 12.2% from 52 week high at $146.99 but above the 50d and 200d ma's.

I'm looking to grab shares on a healthy pullback to base of major moving average.

No position.
3) $CHWY - $54.91, shooting star pattern this week, down 7.4% from 52 week high at $59.30 but above the 50d and 200d ma's.

One I am watching to grab on a base formation, perhaps near a major MA.

No position.
Read 7 tweets
28 May
1) Commented on a @markminervini thread at 2pm asking if it looked like leaders were starting to roll over again.

Gut urging me to lock in some profits.

Wider pullback coming...?

Take a look:


2) $TTD - $298.17
Own shares
3) $MDB - $215.60
Own shares
Read 17 tweets
24 May
1 / Stock Market Quote Thread

20 Stock Market Quotes that are fitting for 2020 (and every other year for that matter).

“The obvious rarely happens, the unexpected constantly occurs.” – Jesse Livermore

The quote thread is inspired by 16 Market books:…
2 / Stock Market Quote Thread

“A speculator is a man who observes the future, and acts before it occurs.” – Bernard Baruch
3 / Stock Market Quote Thread

“What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower.” – William O’Neil
Read 20 tweets
27 Apr
1) $IWO is trending up with a new high back to March 11th, 5ema>10ema (it stopped right at the 50ema on Friday).

I'm holding 10 positions in growth account & will remain that way until I see red flags with price action.

2) $TTD - $256.63, up 49.68% since purchase on 3/17/20 at $171.45. I had my eye on this one for a while but didn't own so I took the opportunity to grab in the March slide.

Chart via @MarketSmith
3) $LVGO - $40.98, up 44.65% since purchase on 1/22/20 at $28.33. Was a stock to watch coming into the year so I grabbed back in January. I didn't get the low but happy with my position right now.

Chart via @MarketSmith
Read 14 tweets
7 Mar
THREAD: Active Account Holdings:

Cash is 29%

- $184.36, 13%
- $73.09, 11%
- $40.00, 9%
- $50.09, 7%
- $27.84, 6%
- $36.76, 5%
- $31.68, 5%
- $125.97, 5%
- $51.96, 4%
- $102.02, 4%
- $14.91, 2%

What I’m thinking...
- $184.36, as the largest holding in this account, I’m currently looking to add on the recent pullback. Both and have proven to be great buys on pullbacks to the 200d ma area. Will remain a long term holding.

Chart via @MarketSmith Image
- $73.09, quarterly sales were up 41% YoY and EPS were up 64% YoY so I am holding, despite the recent pullback. I see this pullback to the moving averages as an opportunity for others to grab shares. Will remain long.

Chart via @MarketSmith Image
Read 13 tweets
2 Mar
1) Stocks to Watch 2020 - February Update THREAD

Overall, +9.75%
8 double digit gainers
3 stocks with 20%+ gains
1 even stock
5 negative returns

2) $ZM - $105.00, up 54.32%, it has been the anti #COV-19 stock but the latest weekly candle ended in the bottom half. I still like long term but it may digest some of the YTD gains which will provide a decent entry area. Above or near the 200d would be great.
3) $SQ - $83.33, up 33.2% YTD, the stock reported solid earnings and looks poised to make a run once the market stops falling and shakes the concerns surrounding the virus. #long shares
Read 16 tweets

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