If you want to learn how to make money with stocks the best way is to watch how professional traders do. So for demonstration purposes, we started 2020 with a real money depot.
1. Where do we trade?
Let us show how we trade stocks. Firstly, we opened a TD Ameritrade account. We like TD Ameritrade because we pay zero commission and we can use the powerful thinkorswim platform for trading stocks and options. 2020 we started with a total amount of $19,816.30:
2. What we Trade?
Primary we trade stocks from the top 200 list of the INVESTOR’S BUSINESS DAILY (IBD). These stocks are selected by the CANSLIM method created by Investor’s Business Daily founder William J. O’Neil. Further we recommend to read his bestselling book:
3. How do we trade?
From this list, we select our candidates to buy if the stock is in a low volatility uptrend. For an entry we wait for a daily swing setup but only if our Market Models are positive and if the entry risk is below 10%.
We sell the stock if we have a volatility stop signal or before earnings with a mean movement greater than 5%. If our Market Models are negative we hedge delta-neutral our current positions.
At the end of the month, we also rotate 5 stocks from the Nasdaq 100. Time to time we add some ETFs to our Depot. Our current depot has 8 stocks, one ETF (ITB) and one put in SPY:
We hold at most 20 positions. No more than 4 entries per day are allowed and our current depot risk should be below 5% and diversified.
Maybe all this sounds a little bit complicated but it isn’t. We can help you with a few coaching sessions how to trade stocks and use this system by yourself.
4. What are the results?
We made last year 18% with 155 trades and an exposure of 65%. Our maximum drawdown was no more than -2%. So our reward risk ratio was 9 (18/2).
5. How to follow us?
Further, we will post our entries and exits on StockTwits, username LoroTrader. Please follow us. You find the latest posts in the footer.
You can find more information about StockTwits and success stories in this book: