"Water shapes its course according to the nature of the ground over which it flows; the soldier works out his victory in relation to the foe whom he is facing. Therefore, just as water retains no constant shape, so in warfare there are no constant conditions."
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Sun Tzu

Friday, February 15, 2013

How I Trade: Three Examples, One Stock

It is always a good exercise to go through past price action and determine where one would have bought and sold. The following example of PGR shows three FICTIVE long trades that would have been justified in recent months with rationale. This exercise is to illustrate my trading style for (new) Covestor Model subscribers and fellow traders.

PGR offers characteristics of a good short-term trading stock: liquidity, well-structured (non-choppy) price action and a market-leading stock as can be seen by relative strength.

So why did I not trade PGR in my own account? There have been many other great opportunities in recent months and I simply cannot trade everything :-). Also, instead of showing three different trades in three different stocks, I wanted to highlight how a perfect example can look like and how one company can offer several opportunities over time.

Three fictive trades illustrate my trading style