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Mar 14 • 9 tweets • 2 min read
7 key lessons from my book:

“The Ultimate Guide to Stock Trading”:

A Thread: 👇 Image
“A stock trader focuses on price action, while a stock investor focuses on the profit and loss statement of the company.”
“A trader believes a stock is overbought when the price has gone up too far too fast. An investor believes a stock is overvalued when the price is higher than the future value of the underlying company.”
“A swing trade for a stock will typically last from days to weeks but rarely lasts for an entire month. Most sustained swing trades on a chart will only go three to ten days before reaching overbought or oversold levels.”
A day trader may spend minutes in a losing trade & over an hour in a winning trade

A swing trader may spend a day in a loser & a week in a winner

A trend trader may spend days in a loser & weeks in a winner

A position trader could spend a month in a loser & months in a winner
“Swing trading stocks should backtest well for 5-day EMA / 20-day EMA crossover entry and exit signals to verify that the moves are large enough to trade. A swing trader just wants to capture one of the waves in a primary trend or a strong move off resistance or support.”
Rule of 30 for finding the top growth stocks to trade on fundamentals with stock screeners.

Current earnings +30% higher than the previous quarter

Annual earnings per share are up +30% YOY

Stock price is within 30% of highs

30 million share float

Price > 30 RSI

ROE 15-30%
“A complete trading system has 8 essential parameters that give traders a process to make their trading decisions: a watchlist, entry signals, exit signals, position sizing parameters, maximum risk exposure, correlation guidelines, volatility filter, and performance expectancy.”
Book link: amzn.to/3IdhTo2

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What is an edge in trading? An edge in trading is simply a process that allows your winning trades to add up to more than your losing trades do over the long term.

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Research historical chart patterns to understand what is possible in the market and how markets change from uptrends to downtrends, and from volatile to range bound. Use this insight to structure profitable trading systems using price action signals.
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Overnight risk is rewarded over the long-term.
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