- Tune out the noise (maybe the financial news).
- Tune out the noise (maybe social financial media).
- Tune out the noise (maybe the indices, Dow Jones, SP500).
- Figure out what your edge is.
- Learn how to lose and accept it, you will be wrong 50% of the time if you are good, if you are great you could be right 30% of the time and still make money.
- Try to eliminate any bias to a stock on your watch-list. On any given day you don’t know what stock will be the big winner so you have to be able to pull the trigger on the ones that trigger and play the probabilities.
- Know your time frame and yourself. You can produce large gains with many trades and low volatility or with a few long term position trades with higher volatility.
- Constantly go over your recent trades and watch-lists to see what is working and how its working.
- Tune out the noise, I’ve been browsing some books lately, one of them the author says he made all his money buying IBD type stocks; over $15 dollars, accelerated growth and E.P.S etc, and the other guy made a fortune doing almost the exact opposite with beaten up stocks left for dead. Know what is important within your trading time frame, and do your own homework. Money can be made with all type of stocks, a lot depends on what the market is favoring and your time frame.
- Come to play everyday, be prepared especially on the down days.
- Know your advantages; don’t trade like Fidelity Contrafund unless you are moving billions of dollars like them. Liquidity is completely relative on the size of your portfolio. A stock that trades only 250k shares might not be liquid enough for a billion dollar fund but it is for most retail clients.
- Constantly try to improve by recognizing and working on your weaknesses.
- Try to stick with the trend, don’t let what you think is logical stop you from believing in the trend. This is when tuning out the noise helps.
- Position size and risk management is the key to all this.
- Stay humble, biggest draw-downs normally come after big up swings. The minute you feel euphoric take some chips off the table.
Frank Zorrilla is the founder of Zor Capital LLC a New York based investment management firm. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts. Managed Assets
Photo; John Chapman