Do you diversify your swing trades?

[Chang]

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.

[MikeJones]

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.

[Wall Street Forum]

NEVER go all in when trading...read this article for a full rundown on diversification



Going all in with my trading style would be a disaster after the first loss.

Here's an example:

If I have $200K and I buy a stock at $200/share and it goes against me. I give my stocks a ton of breathing room on the downside so a 10% loss would be -$20K. That's just too much to lose on a trade that you have to recover from. My account value would be down to $180K. You'd have to make three or four trades to get back even. Trading would never work that way.



On the other hand if you diversify into let's say 4 trades and one out of the three fails then you don't have to trade as much to recover from the loss.