Trading Psychology

Trading History

2005 Newbie to trading, I was a buy and hold investor

2006 Understanding fundamentals better, I continued being a buy and hold investor

2007 With credit crisis on the horizon, buy and hold didn’t work and I focused strictly on day/swing trading

2008 With recession strongly underway, I focused on companies that made for good shorts and kept shorting any potential pops

2009 With mixed markets and no clear edge, I focused on micro-caps and penny stocks since I realized this is where retail investors have better chance of profiting. Hedge funds and large institutions stay away from micro-cap and penny stocks due to its scalability issues which is actually positive for retail investors

Trading Strategy
I look for stocks that have gone parabolic/supernova…and wait to short them on the sell off.

Trading Rules
Rule #1: Play stocks with market capital less than 600 million. (Micro-cap and penny stocks)

Rule #2: Never never ever short a stock into strength, but rather into weakness

Rule #3: Never never ever short a stock on its first spike up day, otherwise get ready to be squeezed

Rule #4: Not all stocks make up for good shorting, especially ones that report good earnings or get big contracts

Rule #5: Wait for the parabolic stock to start selling off (go below yesterday’s close) to short into or starting to show signs of weakness

Rule #6: Fading volume indicates parabolic stock running out of steam and potential for short selling