Remember the first time you learned about stocks…
“What? I can own McDonalds? Can I get free fries?”
You learned a stock moves based on its earnings .
Then you learned it was its earnings outlook.
Then you learned it was how believable/believed an outlook
These are situations, and acting on them requires different strategies and styles.
Remember the first time you learned about shorting…
“What? I can make money when the stock goes down?”
Then you learned that a short’s risk is different than a long.
Then you learned don’t stay short too long, especially MCD!
Another situation. Calling for another strategy, for another trading style
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Incidental terms to understand for this discussion:
– your Trading Style
– your Trading Plan
– tactics
– Risk:Reward
Different situations call for different strategies.
Buy MCD because you want free fries.
Short MCD because they’re giving away free fries.
(Or, you were mad that they wouldn’t.)
Other situations that are likelier to be encountered more often can be:
Economic opinion – ahead of econ reports
Product mechanics – rollover choppiness
Time of day – e.g. trusting/doubting an Opening Thrust
Environments – choppy vs trending
Account size
Personal focus
Indecisiveness
Setup e.g. Fri PM Drift
Different strategies include:
All-or-none (stab-stab)
(A word about 1-lots: “against”)
Trading around / Position trading
Laddering
Scalping (hit & quit)(2-point strategy)
Scattershot (micro to macro)
Staggered entry*
*Staggered entry strategy, not explored in this workshop:
define a full position, i.e. X total contracts
define a full position, i.e. X total contracts
divide into 1/2, 1/3, or 1/4 (tranches)
1st tranche is immediately upon signal
2nd tranche is 3 minutes later (price permitting)
3rd tranche is another 3 minutes later (price permitting)
cost basis is averaged, common reax is exploited thx to discipline
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Not explored in this workshop:
MANAGEMENT i.e. tactics –
re-entering… “stab-stab”
“trading around”
PRACTICE still doesn’t make one perfect
a word about 1-lots: don’t