How do I trade (part 2)?

Intro

In the previous article, we talked about visioning, planning, and drafting your investment plans for the long & short terms.

Today I want to give you the next level of insights & practical tips to help you take your plan to the next phase - execution.

You can also use my resources list to tap into an abundance of knowledge.

To successfully cross the challenge of investing, you should give yourself the time to learn

Method

1. Build your thesis - this part is so fundamental, that it was discussed separately here.
   

2. Designate a total sum for the entire portfolio - Never start by telling yourself you can do the math as you go. Like budgeting any other project, also your investment project should be calculated from the beginning.
   

3. Allocate according to your thesis (step 1) the total sum into sectors' holding percentages - In your investment vision, you should have your core values described. Once decided which are the sectors poised for an upside, it's time to allocate a percentage of the total sum to each of the sectors.
   

4. Identify the stocks & funds your tools indicate should be bought, assuring alignment with the sector allocation (step 3).
   

5. Buy in portions, only when the equity has reached your indicated price zone, and even then - don't buy the whole position. Instead, enter the position at a few different prices, to average your buy price (DCA). When your marked equity approaches your buy price, start placing limit orders from that price downwards.
   

6. If the price had dropped after buying the first portion, it is time to buy some more, until reaching the total sum designated for that specific equity. Place the additional buy limit orders according to your analysis of the next supporting points, according to the technical indicators you're using.
   

7. Do not buy listening to the media, trends, hypes, or any other buzzword. Those will cause you to make your biggest mistakes and act irrationally. Unless it is a breaking live event, when something is in the news, you can be sure it is not that new.
   

8. Sell the same way as you buy - in portions, according to predefined price stop points. Use again your indicators of choice to curate for yourself a set of those that when combined - help you establish a detailed snapshot of the current situation. Additionally, you should have at least three - optimal, halfway, and worst-case scenarios - different possible future developments from that current situation. Each developmental path should end in your defined sell price.
   

9. Always remember that your gains are not secured until you realize them. In general, for the short-mid terms try in advance to enter into equities which will make 100% ROI, then sell 50% of the equity and return the investment (principal). For the long-term ones - I try to touch as little as possible and let the compound growth do its magic. If I haven't reached the full allocated position then I might DCA when opportunities pop.
   

10. Run periodical evaluations & adjustments of your fundamental assumptions & goals. For example, the allocation percentages may (and should) change every few quarters, according to market conditions (interest rates for example). This may affect the selling decision of certain equities, and "force" you to make even more micro-adjustments, but it all sums up to your benefit, as you can enjoy both worlds - On the one hand, you can use some of the sold gains to reinvest in other qualified equities (stocks, ETFs, cryptocurrencies, real estate, etc) or strengthen some of your current positions. On the other hand, you can use another portion of the realized gains for your ongoing cash spending.
    

11. If the equity\sector enters a volatile period, consider selling 25% of this specific holding if it has already reached a 50% ROI (or 12.5% when reaching a 25% return, etc).
    

12. Unlike in trading, when investing, try not to buy & sell on the same day, unless some unusual event occurs and the equity reaches your first defined exit point. Normally only the fees related to multiple intra-daily transactions can reduce the returns, so consider those also. Anything less than a double-figure return within minutes or hours - won't be worth the interest.

Bottom line

Like any profession, investments are for the long term.

In today's declining power purchase of fiat currencies, it is imperative to diversify our portfolios with alternative investments.

The process blueprint for doing so is similar to every new commodity or equity under your radar.

Working under those guidelines will help you get on the right track to build your winning picks.

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I've worked on automating the entire process described above, to the level of no more than 10 minutes of work per day, on a more than 50 tickers portfolio.

I call it Investi-Cation (formerly Noti-Vest), as it is even notifications-based, so I won't need to be hooked to the screen.

Soon I'll be starting to offer it for public use.

Hop on the early adopters waiting list, and enjoy some very nice advantages once it's in your buy zone!

I'm in!