How I Trade

I only trade stocks listed on NYSE, AMEX and NASDAQ.  I do not trade currencies, commodities or futures because my competition (the person on the other side of my trade) is smarter, has deeper pockets, and is better connected than I. I trade stocks because my competition is generally a weak, gut trading and Cramer watching male trader.

I trade in three time frames: Long Term (LT, holding positions from weeks to months), Short Term (ST, holding positions from days to a week) and Intraday (holding positions from minutes to hours.


Long Term:  I use all savings that I would not need for at least 5 years, unless in an emergency. This is long term money, e.g., IRA's, savings, UTMA's, etc.  I use RTS exclusively to manage my long term money.


Short Term: My short term trading is exclusively selling out of the money puts and calls on stocks with weekly options.


Intraday: I am a contrarian trader intraday.  I monitor about 4000 stocks and look for panic selling and frenzy buying.  I buy what is panic sold and short what is frenzy bought.  I look for a bounce to in my long position to close them, and I look for a drop in my short positions to close them.  I never hold any intraday day position over night.  Depending on the day and market, I am usually managing 5 to 50 positions intraday. I open and close my positions with a dynamic tracking system, similar to a trailing stoploss. 

My Day Trading Golden Rules

1. All trades are for the day.
2. Positions are opened between 9:30 to 3:00.
3. Each position is closed if its close target is reached or closed with a market order sometime during the last 30 min of trading. 
4. No position is left open for the next trading day, no exception what so ever.
5. Approximately equal $ amount is traded in each position.
6. Each position $ amount is approximately 1/40 of available intraday buying power.
7. Market orders are used to open positions, limit trailing stop orders are used to close positions.
8. No stoploss is used, stop loss could actually hurt performance in the long run in this type of trading. This is based on experience.
9. If more than one position is opened, there is no way to know which position is going to be winner, a big winner, a loser or a big loser.  I do them all and hence spreading my risk and increasing my chances.  If I was to pick and choose, with my luck I would probably choose losers.