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Do you diversify your swing trades?

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  • Do you diversify your swing trades?

    Just curious as to whether you guys diversify your trades or just go all in on one stock at a time?

    I've tried both methods and I gotta say I prefer being in a few stocks at a time for swing trades.

  • #2
    I wouldn't advise anyone "go all in" when trading. Its just foolish trading.

    I put on several positions with GREAT setups to give myself a better chance of success.

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    • #3
      There are pros and cons to each approach:


      Diversify:

      Pros
      • Smaller drawdowns
      • Peace of mind in trades
      • Clear thinking

      Cons
      • Very difficult to gain traction i.e. grow your account at any significant pace
      • Your full cash reserve is almost never in play at one time. If you decide to put 1/6th of your funds into any ONE trading idea you won't always have 6 trading ideas and you'll have "dead money" collecting dust.






      All-In one stock at a time:

      Pros
      • Huge single trade gains
      • Your full cash reserve can be used and isn't on the sidelines of the market collecting dust

      Cons
      • Can be mentally exhausting when a trade goes against you




      Overall I am a fan of going ALL IN with my trading capital. It just helps you grow faster. The one caveat I will add is that with this strategy you definitely need tighter stops for swing trading. Don't trade this way if you plan on having stop-loss orders 5-10% away from your entry or further. Your account would get absolutely decimated in no time.

      This method definitely requires the "cut losses short, let gains run adage"


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      "Step into the arena and hold on to your hat. Don't get discouraged if you don't make 8 trillion dollars in your first month. Trading is not a get rich quick scheme. Realize that trading is a skill and just like any other skill it takes time to learn. Have convictions in your decisions in life and trading. Ignore the comments and "advice" of those that have never traded a day in their life."


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      Disclaimer: This website provides information about the stock market and other investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for informational purposes only. The Author of this website is not a registered investment advisor and does not offer investment advice. You, the reader, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.

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      • #4
        I go all in with a 2% stop loss. Diversifying doesn't help you when the market takes a dump anyway.

        Cheers

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        • #5
          My rules are as follows

          Max risk on any given trade is 2% of total account size. When compounding into winning trades I only go 4 times moving stops accordingly to make trades risk free as soon as possible.

          On any given trade day, I can only enter new positions up to 10% of total account value.

          Pretty simple and keeps me out of trouble. Also from over trading.

          The guy who taught me this did over 300% (verified) in '17. He is pretty darn good.

          Good luck.

          Comment


          • #6
            Originally posted by stan1 View Post
            my rules are as follows

            max risk on any given trade is 2% of total account size. When compounding into winning trades i only go 4 times moving stops accordingly to make trades risk free as soon as possible.

            On any given trade day, i can only enter new positions up to 10% of total account value.

            Pretty simple and keeps me out of trouble. Also from over trading.

            The guy who taught me this did over 300% (verified) in '17. He is pretty darn good.

            Good luck.
            Nice!!!

            thanks for sharing some of your insight. Any quality content is appreciated here at WSF
            Platinum Swing Trade Alerts (FREE 14-Day Trial)

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            Sign up for the forum to reply to this post!!!


            Best FOREX Signals Software

            Stock Market Investing For Beginners

            Facebook Group
            StockTwits Room


            "Step into the arena and hold on to your hat. Don't get discouraged if you don't make 8 trillion dollars in your first month. Trading is not a get rich quick scheme. Realize that trading is a skill and just like any other skill it takes time to learn. Have convictions in your decisions in life and trading. Ignore the comments and "advice" of those that have never traded a day in their life."


            Terms Of Service

            Disclaimer: This website provides information about the stock market and other investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for informational purposes only. The Author of this website is not a registered investment advisor and does not offer investment advice. You, the reader, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.

            Promoted content: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this website and may receive commissions from purchases you make on subsequent websites. Always exercise due diligence before purchasing any product or service. This website contains advertisements.

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            • #7
              I've always diversified even from day one. It eases your mind when you have a trade going against you and one going for you.

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              • #8
                I diversify all trades/investments. The timeframe makes no difference to me. I'd never put all my eggs in one basket. One stock could have a tragic news story come out and tank the sucker.

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                • #9
                  Depends on the mood i'm in or the overall market. For example, I held a fairly large position in ROKU on friday. I don't think it matters too much if you have a close stop.

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