Filling Gaps in Your Trading Strategy

 Learn to trade stocks and be profitable.

Commentary

I think it would be fair to say that most traders and investors are enjoying 2017.  Just like in years past when the market has had a strong run, new traders come aboard and will usually find early success.  For many, that success can be very short-lived because their trading method tends to be incomplete from a lack of time to truly fine tune their strategy.  Every trader has built their method from concepts and ideas from other experienced traders in hopes of lowering the learning curve.  The successful ones figure out how to take those concepts and add a personal touch to fit their belief system.  Without that personal touch, it's very difficult to have the conviction to buy a stock or sell a stock when the trading strategy dictates to do so.  

Filling the gap in the method you've chosen to trade can take months or it can take years.  For me, my learning curve was shortened immensely because my father had developed a trading methodology and shared it with me.  The only issue is that it wasn't mine because I hadn't taken the time to test and draw my own conclusions.  Eventually, testing my own ideas and concepts lead to the system that I trade today.  

So how do you fill the gaps if you haven't already? Obviously, reading as many books as possible would be a good start.  Market Wizards, Zweig, Van Tharp, and O'Neil are just a handful to get started.  From there, you have to figure out your trading time frame, risk management preferences, and trade setups.  Anyone that's been reading this blog and has seen the charts I post, knows that I tend to trade big weekly patterns moving through multi-year tops.  The stocks, also, but not always will have strong earnings and sales.  

I would also recommend using StockTwits.  If you use it the right way and follow the right people, you can decrease your learning curve.  A few to follow are @JBoorman, @Tischendorf, and @Doozio.  As a side note, those three I listed are going be in alignment with my general thinking towards trading.  You might find that you have zero in common with them or me, but if you look hard enough I'm sure there are few traders that fit with the trading style you prefer to use.  Fill the gaps, but make sure it's your ideas and concepts that are melding your strategy together.

Portfolio Summary

+11.5% YTD

Positions

16 long

Watchlist 

26 Candidates

 

This month has seen several long positions continue higher.  A few stocks that were added to the portfolio in late April made strong moves after earnings this month.  IPGP, OLED, CEVA, and UCTT were added to the portfolio around April 24th.  IPGP is up 12.66%, OLED is up +29%, CEVA is up 19.80%, and UCTT is up 28.70%.  UCTT was an earlier winner from January that was added back to the portfolio.  A few others that looked like they were ready to move, but really haven't are COHU, AMKR, and CRTO.  QRVO was added on April 20th, but wasn't able to move out of consolidation.  It was removed on May 5th at around a 5% loss.  Below are few charts from the portfolio.

Watchlist Summary

The screens and watchlist remain healthy.  A quick look at the total number of stocks passing my main screen gives me a feel for the overall market environment.  In January, 275 stocks were passing, and as of today, 309 are making the cut.  It remains steady and stable, which is what I like to see.  Several stocks from the watchlist have made strong moves and are forming tight consolidations just above their breakouts.  Naturally, as a trader, I'd like to see them pull back just a touch and provide a better entry price.  Sometimes, that's not in the cards and you have to settle for a smaller position.  Below are a few setups from the watchlist.

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