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Registered User
Joined: 12/2/2004
Posts: 1,775
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I feel most comfortable with no more than about 8 or 9 open positions. Since I mostly swing trade I often have the same position open for days or weeks. And by doing so I get to really know the stock's characteristics, it's intraday pattern tendencies, volatility, etc. So, an advantage imo for keeping your open postitions to a relatively low number. But then I read about long term successful traders like Jim DePorre of RealMoney. This guy says that he often has anywhere from 50 to 100 open postions. And he's a basic swing trader. The reason he has so many open positions is because he has a 7-figure account and likes to trade stocks that are often under $10, are volatile, and often have low floats. Makes sense then. But still, how does he keep a keen eye on so many? My first thought was that he simply uses a disciplined/technical trading system. But he says he doesn't; says that he's constantly re-evaluating the positions. Could you effectively manage 50-100 short term positions? I can only pray that I will have that problem one day. What's your style or philosophy?
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Registered User
Joined: 12/25/2004
Posts: 51
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Aside the mental effort, isn't it a question of diversification. If your trading position are large part of portfolio, then many may make sense. Otherwise what's wrong with one, two, or three trades with high potential intensively done?
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Registered User
Joined: 3/26/2005
Posts: 1
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Why, nobody is talking about when to sell?
Thursday and Friday 6/23,24 the DJIA and all indexes had the worst CRASHES ever and nobody here, or anywhere as far as I know, is telling us when to get out.
I am missing something? I need to know when to sell and aboid big loses.
When the Market crashes it does not matter if you have 8 stocks or 50 stocks because 99% of the stocks will crash also.
Thanks
Lui
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Registered User
Joined: 11/26/2004
Posts: 68
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I don't think in terms of when to sell. All my stock positions have hard stops. It may be time to question whether any more long positions should be opened or if put options might be in order. I suppose you could also question the wisdom of tightening your stops.
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Registered User
Joined: 11/13/2004
Posts: 141
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fpetry
The number of open positions one manages depends on several factors and there are no set rules. However, some things to take into consideration are the size of your account, the amount of time you have for watching each position, your need for diversification, and your time frame for holding stocks. but one thing I don't see mentioned very often when it comes to how many open positions one has, is the gain held on those open positions.
This is often not mentioned but plays a big role in the number positions some people have. thus goes the old cliché cut your losers short and let your winners run.
Example, if one is continuing to see nice gains on an open position there is little or no reason to close it. However, one can then use margin with those gains to open up one or more positions in another stock with out closing the original position. Then, if successful you now have two or more open positions, and if all goes well, after a while one accumulates enough gains on both positions they can now margin those gains to open yet another position or two. Or they can just simply close one open position with a large gain and use the cash to open two other positions at half price of the one they closed an pyramid their way into more positions.
My point here is that the number of positions you have open will depend heavily on your accumulated gains and your need to re-invest and or diversify. However, for most individual investors, that means a handful or less is plenty. As for Jim DePoere, I doubt that he is managing all those positions completely on his own. Also, as I explained above, I would suspect at least some of his positions have likely seen large enough gains that they do not need to watched as close has some would think and that at least a portion of his portfolio is built on re-invested gains.I would also bet that the majority of those positions are being held for the long term and very few are being actively traded.
UserTM
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Registered User
Joined: 11/13/2004
Posts: 141
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Louisvale
Point 1.
When to sell should be relative to the positions you have open, and not neccessarliy based on the over all action of the market, as not all stocks follow the market (though most do) and then out those that do not all will fall as steeply.
Point 2.
Your exit point should be decided on before you open any positions long or short.
Point 3.
Where do "you" see the market going from here?
You should not depend on this board or any other for advice on when to enter or exit a trade. The purpose of this board is for exchanging ideas and not necessarily buy and sell signals. Also, what may be a sell signal for me might not be for you are for others on this board, as most posters here all trade in different time frames and as well as in differnet stocks. Just take a look at the Wordens videos and related notes from other posters on CMGI. This should be a good example of what I am trying to say. After you have reviewed the videos and all the relates messages, set back and ask your self if you would have brought the stock based on the wordens original recommendation. If so when would you have brought the stock, that day, at a later time, or not at all. If you brought the stock, did you get shaken out of your position for a loss, did you lock in quick profit, or are you still holding? Now ask yourself why you took the actions that you did concerning this stock, Then apply what you learned to the greater market
UserTM
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