I've been keeping a written trading journal on stageanalysis.net since 2013, where I've documented all of my trades, warts and all. Which has helped me to learn from my mistakes, and has forced me to stick to my trading rules and avoid making impulsive trades that don't meet my risk requirements.
I trade mostly using the Stage Analysis method, which was made popular in the classic stock trading book – Stan Weinstein's Secrets For Profiting in Bull and Bear Markets. But I've read lots of other trading books over the years, and so have developed my own preferences and so don't follow a strict interpretation the method.
However, it does make up around 80% of how I trade, and was the reason I finally stopped losing money, and instead started to grow my account, as it helped me to focus on the quality of the trades that I was making, and changed the way I look at stock charts forever.
I currently trade two different types of account.
The first is a short term trading account, where I mostly make trade stocks listed in the US stock market, with an average holding time of around 1 to 2 months. Although I'll exit trades early if they don't behave as I was expecting.
The second is a longer-term investment account, where I trade in stocks and etfs. Although I'm more limited in what I can trade in that account as it's via special type of pension account that we have in the UK called a SIPP, which means a self-invested personal pension.
My trading style is mainly breakouts, and I focus on what is known in Stage Analysis as the Stage 2 Advancing Phase.
I favour stocks that are in their already in their advancing Phase, and had strong Stage 2 breakouts on heavy relative volume, which expanded as the stock rose, and then contracted on the pull backs.
I also look for a stock that has strong relative performance versus the market, which must be outperforming following the breakout.
It should also be clear of any near term resistance – by which I mean, it should be near to its 52 week highs, and not its 52 week lows.
As I'm looking to buy high, and sell higher instead of the buy low, sell high cliché that is consistently talked about in the financial media.
This is not the only criteria, as I also look at sector strength and lot more. But it is the core of the method and hopefully gives you a rough idea of how I trade.
But if you want to know more, you can read my entire journal from 2013 until today in the forum, called isa's SIPP Pension Journal, which can be found in the Members Threads section on the site.
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