Will you take the same setups on multiple different stocks that are lining up according to your method(ie. pullbacks, MA cross, whatever you use to trigger you long or short)?
Let’s say your overall view on the market is up so you are only looking for the strongest pullback trades. if you see 5 stocks that all look like they are lining up for a pullback trade, will you take positions on all 5 stocks, OR from here only look for the best looking one of those 5 and ONLY take a pullback trade on that one stock? I feel like putting on 5 of the same trade type is basically just taking a pullback trade but increasing your risk 5x because if one works, odds are they will play out on the other stocks you are looking at also.
For example, I put on a position in SPY a few days ago from what looks to me like a pullback lining up. I am in the process of forwarding testing using 1share but knowing I am already bullish on the overall market, I am not taking setups on individual stocks (although they look good) because I really feel like its all the same trade. I haven’t thought about this at the time, but definitely something I will need to think about and incorporate into my trading plan going forward about how I will handle this.
Also, what do you think of looking for “setups” that only look like textbook trades? Do you think there is anything to how good a trade “looks” atomically?
I’ve noticed that in my analysis, there are some charts where I will take a look at them for multiple minutes and I feel like the longer you look at a chart, the more you are vulnerable to adding something there that may not exist(if you are a discretionary trader). then there are other charts that just jump out the second you look at it and its like BAM, oh yeah that’s a pullback lining up for sure!
Does anybody else have any thoughts/experience with what I described above regarding those “textbook” looking setups? I have to imagine, the cleaner a setup looks, the better those probably play out.
Let’s say your overall view on the market is up so you are only looking for the strongest pullback trades. if you see 5 stocks that all look like they are lining up for a pullback trade, will you take positions on all 5 stocks, OR from here only look for the best looking one of those 5 and ONLY take a pullback trade on that one stock? I feel like putting on 5 of the same trade type is basically just taking a pullback trade but increasing your risk 5x because if one works, odds are they will play out on the other stocks you are looking at also.
For example, I put on a position in SPY a few days ago from what looks to me like a pullback lining up. I am in the process of forwarding testing using 1share but knowing I am already bullish on the overall market, I am not taking setups on individual stocks (although they look good) because I really feel like its all the same trade. I haven’t thought about this at the time, but definitely something I will need to think about and incorporate into my trading plan going forward about how I will handle this.
Also, what do you think of looking for “setups” that only look like textbook trades? Do you think there is anything to how good a trade “looks” atomically?
I’ve noticed that in my analysis, there are some charts where I will take a look at them for multiple minutes and I feel like the longer you look at a chart, the more you are vulnerable to adding something there that may not exist(if you are a discretionary trader). then there are other charts that just jump out the second you look at it and its like BAM, oh yeah that’s a pullback lining up for sure!
Does anybody else have any thoughts/experience with what I described above regarding those “textbook” looking setups? I have to imagine, the cleaner a setup looks, the better those probably play out.
