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  1. #1
    Avalancheykj Guest

    Default developing a new strategy

    Hello,
    Im new to trading and have created an investment club. I had a successful trading strategy that worked in simulation but i can't apply to real life. seeing how other people have employed successful strategies I thought i would ask for some tips. I'm thinking of going with a swing trading strategy, trading under $5 stocks. any tips at all are appreciated, thank you.

  2. Default

    What do you mean by "investment club?" Just you and a few friends getting together to chat stocks once in awhile or will you be opening a brokerage account as an Investment Club?

    Second why only stocks under $5? Most stocks under $5 are terrible companies and not worth investing in. Yea I trade them all the time, but that's just trading the charts, I don't care about the company. If you are an investment club pooling together money, you need to find good stocks that can grow your money. Otherwise you'll find your investment club members soon arguing about what stock to swing this week or next week because of some hot rumor they heard. Eventually people get pissed off and take their money out.

    You need to come up with a plan. Find some rules you want to stick to such as the company must have earnings growth year over year for the past 2-3 years. Come up with at least 5 rules you guys all can agree to and find stocks that meet that criteria. This way you at least find good stocks. Then if you really want to swing trade them, you have to learn technical analysis of the charts to find entry and exits. This is no cake walk, it takes time and practice. If your investment club members are not willing to learn this aspect of swing trading, then you will be better off just finding a few good stocks to buy and hold that everyone can be happy with.

  3. #3
    Awannavare Guest

    Default

    I dislike the idea of an investment club with swing trading. Money ruins relationships. You better sit down with your buddies and create a real detailed plan on what you're going to do when things go wrong (and trust me - they will go wrong).

    Create a very detailed plan of what stocks you are gonna trade in what indexes and what sectors. Then do some money management to determine what type of risk you can handle with each trade.

    Try your strategies on paper and look at your results.

  4. #4
    azjwvehlort Guest

    Default

    ok by "investment club" we chat stocks but each individual person trades on their own, with whatever plan they are good with,like, and have tested. at the end of either a fiscal quarter or 6 weeks we will pool the money allowing for loses to be covered(kind of like a safety net) and profits being distributed. (also the one member has a hong kong trading account if that means anything)

    secondly, I've changed to just stocks like below $30ish seeing how i can't buy many of them and won't make much of a profit if they cost more. For the sector i was thinking technology, and I'm looking at high earnings, and market cap. I have found a few that fit this profile already, also i'm looking to have mutual funds as long term backups for my own trades.

  5. #5
    Backlitrgs Guest

    Default

    Have you read any technical analysis books? I suggest you do if you haven't. If you want to do swing trading, you need to be able to read charts and apply technical indicators on the charts to find entries and exits.

 

 

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