STOP.
STOP trying to make the best way to trade. It doesn't exist.
Oh, thank goodness. Stop spending so much time coming up with more and more rules for trading and realise this:
Concentration is how money is made on the stock market. You're right. You need to trade the best stocks at the right time and have enough money to make a big difference.
In this game, you have to go from MAKE money to KEEP money. Unless you want to "invest" for the next 25 years or more and build your wealth slowly, here's how to make millions on the stock market:
In his book "How I Made $2 Million," Darvas talks about how he made that much money.
How many people looked at the size of his position? In the beginning of his trading career, Darvas only traded one or two stocks at a time on MARGIN! Only when he had more than $500,000 did he start to do a few different things. Most people don't think about these things.
MY Momentum Stock PLAN:
CONCENTRATION BUILDS WEALTH DIVERSIFICATION MAINTAINS WEALTH
END GOAL:
$2 MILLION+ ACCOUNT MAKING 20-30 percent P.A
Begin with:
$50,000 Invest half of your money in each of two stocks.
RISK Per TRADE = 5 percent
When $100,000 Invest 1/3 of your capital in each of three stocks.
Risk Per Trade = 3 percent
Whenever:
$500,000 Buy 5 stocks with 1/5 of your money:
Risk Per Trade = 2 percent
When you have $2,000,000, trade 8 stocks with 1/8 of your money:
Risk Per Trade = 1.25 percent
You have to make money first in order to keep it. Even though "professionals" may think that trading only two stocks at once is "risky," you should be very picky about the stocks you trade. Quality is better than a lot. Even more so when you focus so hard.
This is the only way for a small account to get big. You must not only work hard in the beginning, but also only trade the top 0.1 percent of stocks on the market and get your timing right.
