What the record teaches
Library
Nothing here is theory for its own sake. Every rule and setup links to the trades behind it, and every concept is explained from zero.
Concepts
The vocabulary. Start here if a word on this site is new to you.
- Gap risk: when the stop doesn't save youIf a stock opens below your stop, the stop fills at the open, not at your price. Holding overnight always carries this risk, and the record shows it.
- Moving averages: the 8, 21, 50, and 200-weekA moving average smooths price into a trend line. Four of them do most of the work in this record: the daily 8 EMA, 21 EMA, 50 SMA, and the 200-week VWMA.
- Partial profits and the break-even stopSell part of the position into strength, then move the stop on the rest to entry. The trade can no longer become a real loser, and the remainder gets room to run.
- Position sizing: size comes from the stopYou don't pick how many shares to buy. You pick how much you're willing to lose and where your stop is; the share count falls out of the math.
- R: measuring every trade by its riskR is the amount you planned to lose if the stop hit. Every result on this site is a multiple of it, so a trade reads the same at any account size.
- The stop: deciding where you're wrongA stop is the price that proves the trade idea wrong. It's chosen before entry, placed as a live order, and only ever moved in your favor.
- Trailing stop: the daily close below the 8 EMAAfter the first trims, the remainder rides until the stock closes a day below its 8 EMA. It's a rule that lets winners run without guessing the top.
Setups
The patterns I trade, with every trade taken on each one.
- Breakout from a baseA leading stock clears the top of a multi-week base on rising volume. Buy the break, stop under the breakout day, add only on a new base.
- Deep value: buying quality near the 200-week VWMAA quality company sells off to its 200-week volume-weighted average. Scale in at pre-set levels, then manage it like a pullback once the trend turns.
- Pullback in an uptrendA strong stock dips back to its rising 8 EMA and holds. Buy the hold, stop under the day's low, trim into the next push.
- Squeeze: tight range, building momentumVolatility contracts into a tight range while momentum builds underneath. The entry is the break out of the coil, with a stop at the day's low.
Rules
What I hold myself to, and every time I broke it.
- A lesson for every closeEvery trade that closes gets at least one written lesson line, win or loss.
- Adds only from the planNo adding to a position unless that price or trigger was already written in the plan.
- Exits only from the planNo selling except a stop, a written trim, or the written trail. A discretionary sell is allowed only if it's logged the same day as a named exception.
- Market regime filter (SPY & QQQ)Before buying individual stocks, check SPY and QQQ against their 8, 21, and 50-day averages. When they're below, stand down or only trade the indexes. When the 21 sits close above the 50, don't buy pullbacks.
- My own trigger, every timeAnother trader taking a position is information, not a reason. Every entry needs a trigger of my own beyond a stop.
- Plan before the fillEvery new buy has a setup, a one-line trigger, a stop, a size worked out from that stop, and a first target with a trim amount, all written down before the order fills.
- Stops are live ordersThe stop is a working GTC order at the broker the same session it's decided, and the journal matches it. A stop that only exists in your head isn't a stop.
- The books match the brokerAt the close, every position in the journal matches the broker, and nothing that's flat is still marked open.
Principles
The why underneath the rules.
- One system until it's consistentEvery system has drawdowns. Hopping to a new one each time the current one hurts guarantees you never learn any of them. Get one consistent first, then build.
- Risk firstDecide what you can lose, and where you're wrong, before thinking about what you can make.
- Show the lossesThis record is for the people reading it. That only works if the losses, mistakes, and broken rules are as visible as the wins.