LogFAQs > #948654117

Ultimately, I need a good reason to sell just like I need a good reason to buy. Catastrophic news about company losing the patents to all of its products might just be a good enough reason to sell, but a 5% dip for no apparent reason for me wouldn't be.

All of this is primarily aimed at identifying stocks that I want to buy and hold for long term growth. If your goal is a lot more short term, IE I want to buy this and sell it next week or even later this afternoon, then you need to develop a set of criteria that makes you confident in identifying those trends. And I think that criteria would focus even more heavily on the suspicion I mentioned earlier about reddit pumping stocks...

All in all- this condenses into a process that I follow as such:

1) Identify a potential stock.
2) Identify qualitatively why this stock might do well in the future, and try to play devils advocate and find reasons it might fail. Keep an eye out for scammer/pumpers
3) quantitative analysis of the health of the business.
4) Gutcheck on if the recent movement of the stock price is signaling whether this is bad time to buy.
5) if everything seems good... then buy!
6) hold until you have a good reason to sell.

This also includes several rules, including a) don't buy a stock that has seen a sharp rise in the last week or so and b) no options until 2022, we don't understand the regular stocks enough to even think about that. Rules to restrict myself from bad decision making are just as important as the reasons to justify a good stock. I think its critical after making a mistake on a trade to reflect on if there was a mistake in my decision making, and change my process accordingly. In the future, I should avoid making that same mistake.

So this is the process that I follow. Under this process, I have made gains on every trade I have made, including AMD, ARKG, ARKK, CWB.TO, NET, and BA. The only bad trades I've made were the bankrupt penny stocks Lopen told me not to invest in... I'll baghold those $50 investments until the day I die.

So anyways, I've made gains. But does this make me think I know what I'm doing? Honestly? I think I don't. When I ask myself if I think my method is good enough to do better than the general investing population, I don't really think so. I think my trades so far have just been somewhat lucky. There's an ocean of stocks out there - I like to think I'm a savvy investor, but how could I identify the good stocks that nobody is talking about? How can I *really* be confident that a stock is going to do well? I may have made gains, but I think so far all I've done is make guesses on stocks other people are already talking about, at a time when stocks are often rising to recover from the COVID plummet. I've never invested before, but my feeling is that right now is an easy time to make money, and that in a normal year, it will be tougher to make choices that gain significantly.

So what does that mean? It might be better if I just find some ETF's that align with my high level ideas and let them handle the actual managing of stocks. Does this mean I might not make as much money as someone doing a great job of trading stocks on the regular? Yeah... but if I'm not confident I can be that guy doing a great job trading stocks on the regular, then it's irrelevant. I'm giving myself until the end of 2021 to play around with stocks and decide if I think i know what I'm doing enough to continue investing with stocks. (no options until 2022 is therefore no coincidence).

Even if I do think I should manage stocks myself - I still think I shouldn't trust myself completely, therefore I want to assign 50-80% of my portfolio to ETF's and let them do their thing, and see what I can do with the remainder. After I made a few successful trades, that's why I pivoted to going into ARK.

So, coming back to you, Nanis. You need to ask yourself why you think *you* should be managing your own stocks. Do you think you have a set of criteria to base good decisions on? When you look over what I've said about my own strategy, the steps that I take to make myself feel confident in an investment, do you have any sort of similar requirements of yourself before you make a trade? Your own guidelines don't need to be like mine. They don't need to go as far as I do or they could go much farther. But for you to make those trades, you should have some kind of basis to ground yourself with. When you do make trades and make mistakes, do you think you are learning from those mistakes, and taking care to avoid them the next time a similar situation comes up/

If you don't have any kind of process - do you think it would be worthwhile to come up with something? Do you have the discipline to follow the process you've developed for yourself?

A big thing that has come up over and over is your fear of missing out that drives you to buy and your fear of losses that drives you to sell - do you think you can establish rules on yourself to force yourself not to do this? IE - something like my rule not to buy stocks that have sharply increased, or a rule that you can't sell a stock the same day you get bad news?

I think if you want to continue trading - you need to get to a point where you are confident in your trades, no matter how you do it. If not, you should strongly consider the managed fund route.

Thank you for your time, I hope this has been at all helpful.


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