"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."
Sun Tzu


“(from ὅλος holos, a Greek word meaning all, entire, total) is the idea that all the properties of a given system (physical, biological, chemical, social, economic, mental, linguistic, etc.) cannot be determined or explained by its component parts alone. Instead, the system as a whole determines in an important way how the parts behave.” (Wikipedia)


Two short term effects frequently occur in equity markets and can be exploited to achive abnormal returns: price momentum and mean-reversion. The momentum effect refers to the occational tendency of equities to maintain motion for a period of time. Mean-reversion indicates the opposite: prices tend to reverse to a mean value as result of an excess of euphoria or fear. My trading model, which I call “Holistic Swing Trading”, tries to identify these regimes using technical indicators in combination with market sentiment analysis. My goal is to benefit from short term price swings in US equities. In the past, only bigger institutions, such as hedge funds and proprietary trading desks were able to exploit these strategies. However, I believe that new technologies and significant reduction of trading costs enable individual investors today to profit from these inefficiencies.
Investment Process
The strategy is based on a three step top-down investment process, starting with analysis of short term market direction and regime (momentum or mean reverting) using various price and sentiment indicators. Step two is identification of market themes. Goal is to invest into themes which are “in play” and drive current market direction, leading to selection of stocks and ETFs, who benefit from identified themes.Usually I trade between five and ten positions from various industries and/or asset classes. Finally, entries and exits are determined using technical analysis methods.

Risk Management
There are basically two ways to be profitable in trading: a strategy can offer a high win rate or/and high ratio of winning amounts to loosing amounts. In order to limit losses and have a favorable win/loss ratio, I sell a stock whenever the loss exceeds 1% of portfolio value. So for example, I would close a position if I loose more than $100 on that trade in a $10.000 account.
In addition , position sizing plays an important role for overall profitability. My optimum position size is calculated as a function of underlying volatility and anticipated selling price in case of an unprofitable trade. The more volatile the stock, the smaller the size of the position. A third mechanism to manage risk is diversification: I try to hold between 5 and 15 positions across various sectors at a time. Finally short selling also plays an important role to reduce account volatility.