I’m not trading today, but there’s something I’ve been thinking about and I want to put it down, so I can really start working on it in the future when I have a bit more working capital to invest.
I want to have a long-term “portfolio” similar to the diversified one I currently have, but I don’t necessarily want it to be as diversified, and I’m also not planning on holding, essentially, forever. I want to look at good stocks that look like they’re poised to move up over the next several weeks, and take the trades on the daily chart. Maybe look for entries on the 4h chart at the lowest.
It would be the plan to look at these stocks only weekly, and largely let them ride from there. It’s portfolio adjacent, but more actively managed. So what will these stocks look like?
I don’t want there to be the risk of crazy wild swings, and getting stopped out without even realizing (if I use stops..), so I definitely want something that already has some weight behind it. Probably things that are trading at a minimum of $50. Maybe as low as $25, but I think $50 should probably be the threshold. And for volume and pre-market moves etc. I don’t think that matters much, considering it’s a buy-and-hold strategy.
I think I want to look at longs largely, too, so I’ll look for things that have outperformed the market over the last several months, or at least has a little strength while the market has had some weakness. I’ll make sure to keep an eye on these, but I don’t think there are too many stocks that are inversely correlated with the S&P, so I should be good there. Also, when I say outperform, I’m including stocks that have dropped, but less, percentage-wise, than the S&P and DOW overall
I was thinking that I could hold shorts, too, but for now, I think I want to hold Longs. I also think that this could be a good strategy for Options, but I know those tend to be more expensive (though I’m waiting until I have a significantly larger account to implement this, so that might not be an issue). Let’s also keep the number of stocks at a reasonable number, so I don’t get too overwhelmed.
5 – 7 Stocks
$50+
Outperforming the market overall
Technical Indicators suggest further strength
Since I plan to hold these for so long, I’m not sure I want to use a stop, but at the same time, this isn’t a portfolio I plan to hold into retirement, so I need to figure out how I plan to exit these.
Also, I just spent a few minutes messing with the TradingView screener, setting up the parameters for this strategy. I’m probably going to continue to tweak it, but for now it showed something like 250 available stocks. So, when it’s time to implement, I’ll just look through each one, starting at the Monthly or Weekly charts and work my way down, and pick out the 5 – 7 that I like the most and believe in the most. That’ll probably take up a whole day (like setting up the portfolio) but once it’s setup, I should be good.
The last thing I can think of with this strategy is determining how to replace a stock, but that’ll come when I figure out what it takes to exit. I’ll also probably keep a list of 10+ so I already have an idea of which stock to rotate in (potentially, that also might overwhelm me and cause me to make changes that might not necessarily need to be made. But if I have a specific exit/replace strategy, I should be able to stick to it.)