Disciplined investing

I would like to find out how disciplined investing performs on swing trading (i.e. the average holding period of a stock is about 4 months). Will keep the info/performance on this blog as comments. We all have bad trading habits. I like to check whether I can beat S&P with disciplined investing in the long run.

*It will be real-life instead of simulation.

* Will be disciplined on how I trade following the procedures below.

* Buy. Will place a buy order about one stock per week usually on Monday or Tuesday except vacations, holidays and a down market.

Will have a position from $10,000 to $25,000 per stock depending on how attractive the stock and the market conditions.

Will buy it at .5% to 2% less than the market price and will buy it at market price if I cannot buy it with my limited price. Skip the buy order if it explodes in price. I missed a lot of good buys before. Over 90% of the buy orders should be executed.

* Sell. Will place a loss of 25% and sell it at a gain of 15%.

* Market correction. Will sell all stocks at 2-10% higher than the current prices when I predict a correction is coming.

* Market Recession. Will act accordingly. Will tighten stop orders at the last phase of the market cycle or when the market is risky.

Market timing is not a science. However, it is better than with a plan than without one. Hopefully, in the long run, we can guess correctly more times right than wrong.

The above is a very simple market plan and all investors should have one but it should be more complicated. It should include how you select a stock and your objective like beating S&P 500 by 2% at least risk.

Stocks will be screened from many sources. Some are free and some are at low costs. Will evaluate each stock using fundamentals. Select the best one to buy.

Just updated the scoring system for stocks. Now I've two: one for taxable accounts (holding it for 12 months) and one for swing trade (4 months). Will include stocks I just bought. Do your own research as no one will be responsible for the performance other than yourself.

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History.










(c) TonyP4 2011. Written in 6/3/11. Updated 7/26/11.

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Disclaimer: All my posts are for informational purposes only. I'm not a professional investment counselor. Seek one before you make any investment decision.