Traders Corner

I love getting feedback from clients and fellow traders. Here is another email I just received today. Jeff is wonderful guy and a good friend, not to mention a good stock picker. I always pay attention when Jeff mentions a stock. Here shared an email this morning and I asked him to elaborate on the difference in his trading, here is his reply and many thanks for letting me post to the blog.

Hi Kerry,

Here is my equity curve for January. My picks have gotten better, but I have also been more consistent at taking profits. You’ve played a big role in these results. Thanks!

These are the main reasons for my results ( December was also good and I was profitable for 2008 ).

1) I spent much more time on a short list of about 10 favorite stocks and really got to know how they trade and what is and is not out of character.

2) I focus much more on support and resistance on all time frames. I tend to sell as we approach resistance and if we keep going, I don’t worry about it. I’ve always had a tendency to kick myself if I get out too early or if I don’t get out and it drops! That leaves a narrow margin where I’m not kicking myself. Now I’m focusing more on my account goals rather than “being right.”

3) I also like to buy closer to support so my stops can be below that support. I’m also using volume much more to determine if the short term trend is running out of or gaining steam.

4) I am trading smaller with proportionally wider stops so I don’t have to be as precise in my timing.

5) Probably the biggest thing is that I’ve really cut back on questioning myself. There have been many times where my analysis suggested I enter a position but I would talk myself out of it. The same applies to exits. I would see a stock hit a ceiling and stop going up and I was afraid I would sell and be wrong. Now I sell and if it goes up further, no big deal.

Jeff