Replies to post #32 on Newbie Do's & Don'ts

[gramps2]

Evening 'REO',

Your question deals with 'Money Management' & 'Trading style'.

You 'MUST' diversify.

Lets say you're at a 'Buffet', you only have one plate & one pass at the food. I'll bet you'll squeeze as many 'delights' as possible on that plate. Yet there will be more of one item than any other. Because 'YOU' like it, & not because somebody told you to like it...

Buy the most of the 'SYMBOL' you've done the most 'Due Dilligence'(DD) on, and that 'YOU' like the best!

Only you can decide how much or what % of your hard earned money to put on any one position.

Hope this helps.

Now i'm hungry!!

gramps

[timhyma]

REO- As much as you feel comfortable with risking.

Personally, I stick to 20% max of my trading portfolio. The "safer" plays closer to 20% then the ones you have to constantly watch.

[excel]

Reo. Do you base your decision upon volume, float, share price, percentage of your portfolio or how liquid you are at the point of entry?

The opinion below is based on trading for a day trade or short swing trade.

I look at volume first. If volume isn't enough I need to go in with an amount I know if I need to get out I can without creating huge downward pressure.
I like getting in day trades when I look at 10 day moving average and two hours into trading already is over 60%.
With an upward trend going on at same time along with good technicals it allows me to take a bit larger position than one that is trading average volume and still waiting for stronger upward trend.

As far as share price goes if the stock has bounced already off the 5 day or other indicator I'm looking at if it's already half way to next resistance I'll get in smaller then I would if right after breaking resistance as it has lot more to go before volume may slow down due to those thinking it's not strong enough to break next resistence.

The float,outstanding shares, authorized, I'm only concerned with when I'm going long term.

As far as percentage of your portfolio, yes, that's something I definetly look at.
I want my money working for me at all times.
If I get into a stock with to much of my portfolio it takes away from other plays that come up.

I've lost out on way to many bounce plays because I didn't have any cash sitting there.
Never again.

Everyone has different idea's about your questions, as they should because there are so many different ways to trade out there which entails many different strategies.

Keep asking questions. One who asks questions is a winner in my book.

If you have missed any posts by Lance and Harbs they have some excellent posts about trading styles and money management on their ibox now.
I have learned a lot from them.
You'll see a lot of posts full of wisdom relating to your questions.

http://www.investorshub.com/boards/board.asp?board_id=212