Ondrej Pohorsky asked 7 years ago
- Put $2500 to each position - it means 1/8 of my account.
- Or should I take each trade with pre defined risk (e.g. with 1% loss of my account on hitting stop-loss) and measure position size accordingly? (Disadvantage of this approach is that it can allocate too much money for one single position)
Poho
Pat Walker Staff answered 7 years ago
Good evening Ondrej,
It is a pleasure "meeting" you! I am honored to work for you. I respect your drive and ambition to truly learn the markets, and I will help you any way I can!
These are good questions. You are smart to NOT put all you money in one stock. That is too aggressive. Here is my suggestion. Take account.
Divide by 4. Therefore, $5000 in each stock. Constantly re-balance this as account grows. The other option is divide by 5. $4000 in each stock. Either is fine.
Now this is important: When a stocks hits the buy point buy 1/2 your amount your have allocated for each stock. In other words, If you are going to put $5000 in a stock, start with ONLY $2,500 as first purchase. If it goes up 2% to 2.5%, buy 30% more of your $5000. If it goes up 4 -5%, buy 20% more. ***IF it does NOT go up, you do NOT buy more!
This is good pyramiding. I learned this from Bill O'neil. Let's talk if the stock goes up a bit from you purchase and drops. I frequently will sell the stock price drops below the lows of the day. Please, keep your losses VERY small. As the stocks goes up in price, keep raising your sell stop. NEVER let a $2 profit on a 20 dollar stock turn into a loss. Sell it!
As it goes up in price and is extended from your buy spot, you can Sell a little into the strength. This guarantees you will make a profit even if it drops in price and you sell rest for breakeven.
Let's talk TYPE of stock to own. I would not do the wild stocks like AMZN or GOOGL. They move around too much. I would focus on stocks from $20 to $40 a share. There is great money there with less risk of large losses. Stocks like TER, ACLS, SQ,, SEDG were perfect stocks for you. Also, please study the chart of those stocks back in Sept. of this year. They had CLEAN AND SIMPLE price patterns. They had simple entries. That means you have a simple exit to sell if it falls. Your loss will be much smaller. I would focus on REALLY SIMPLE BASES. Also, I would NOT buy pullbacks until your account has grown a decent amount.
Please, as we proceed, ask me more questions. I will answer them promptly. Also, I must tell you, your English is very good. Better than some Americans I know!
I am thankful to know you! And will work hard to help with your learning any way I can. Have a great, safe weekend.
Sincerely,
Pat Walker
Pat Walker Staff answered 7 years ago
Ondrej Pohorsky
replied 7 years ago There is no problem calling me Ondrej. “Poho” is my nickname based on first four letters of my surname. But Ondrej is OK also.
Ondrej Pohorsky answered 7 years ago
OwenHello Ondrej,
The Key List is the list that is sent out every night to VIP members. It is the list that Pat will be “Keying” on for the following trading day. I’m sure you already know that; you’ve been a VIP Member for a while now.
The MaxList is a list of stocks that are leaders in their groups. For example, Amazon is a MaxList stock. If you are going to purchase something online, where are you going to go first? Amazon. If you are going to search something online, do you go to Bing? No. You use Google. Google is a MaxList stock. Pat put out a video a few months ago called, “This is the MaxList” – you can find it here: http://missionwinners.com/getting-started/this-is-the-max-list/
Additionally, there is some good information in the Getting Started category. You can drill down into the blog or you can simply use a category limiter to get the whole shebang by truncating the URL after the category, like this: http://missionwinners.com/getting-started/
Hope that helps! I’m going to close this post now; feel free to open a new one if you have additional questions.
Happy New Year!
Owen
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Hi Patrick,
thanks for your advices. I will divide my account to 5 parts ($4000 each) and try pyramiding that you suggest.