**The psychological importance of defining and limiting risk

Afer doing some focusing, I realized the scared feeling I’ve been getting lately could be related to stocks. I’ve been really scared that I’m down so much recently and that this could affect my further and my dreams. 

But I realized I only feel this way when I’m down big and really close to being out of the game because of my investor loss limits.  However, if I were to have cut my losses very short and limit my risk every time, I would not be feeling like this. In fact I would have had to lose many times to get to this point. I need to cut my losses and more importantly define my risk before I buy, and stick to it.

From now on, for the sake of my own happiness AND for my and my friends accounts, i promise to limit risk to the T every trade, and get out right when I need to. It can Always Go lower.


I’ve been getting out of positions way too early.

My positions have been correct a good amount of the time recently. I’ve made decent money on them, BUT my problem is im getting out too early and missing out on much more potential profit.

Specifically, I’m exiting based on fear of other technical factors such as support, superstock moving average, short squeeze, etc. After studying the charts, had I just waited for an opposing no volume test to pass before exiting instead of doing so on a whim, I would have stood to made thousands more dollars. 

Bottom line is, I’m trading on emotion instead of based on volume and price. Stop that!

Research watchlist methodology

I should keep a smaller watchlist so I can watch more closely and have more capacity to be aware of the major indexes.

I think on the weekends I can spend time going though stocks that showed pocket pivots throughout the week, and that showed no supply tests while in a bull market, and then ones that showed no demand in a bear market or at market turns. 

Then I’ll pick a small watchlist of 30-50 stocks from there that showed the most promise based on a number of factors ( signs of strength weakness, quality of base, quality of fundamentals, beta, quality of breakout, moving average position, new highs etc. 

I’ll keep that running list of 50 max stocks and curate it each weekend to include the new better stocks and remove the ones that are extended or failed. I should try to be a bit diverse too in the industries I include.

As a part of my weekend research I should always research the major ETFs like UNG, USO, IBB, CAF, GLD etc for changes in industry direction.


I was looking at USO today after reading that supply cuts are some of the deepest ever by OPEC and that surplus would be in balance by June at this rate. On 2/7 uso put in a failed supply test. There was a hammer on lows of consolidation on high volume. It shows buying and support but that there is still supply at those areas.  

Should see price fail to rally much higher at this point and come back down to test the area and maybe push even lower.

News events and insiders

I was thinking about tenge concept of priced in events. 

For example: interest rate rise will cause banks to make more profit so bank stocks rise.

If the insiders know this and had a chance to accumulate at low prices, then prices move up and in the name of “pricing in” a future interest rate rise, then the insider have already made their money on that “pricing in” and when the actual event is announced by the fed, maybe this is just an opportunity by insider to sell into that mass buying pressure. 

Now if the up move is followed by volume, then more likely the move is genuine and everyone is now getting in on the party.