Developing My Trading Strategy by Leonardo Jafet
Are the risks and returns involved in a more active investment style compatible with your resources and financial goals? Here’s a trading approach that can help answer your questions.
ntry in my mental trading journal, circa October 2008: The demise of buy & hope investing (and ensuing losses in my portfolio) is the nudge I need to finally consider developing a trading strategy in which I would have enough confidence to take some smarter risks. The first question I should ask myself is, “Are the risks and returns involved in a more active investment style compatible with my resources and financial goals?” Maybe. All I know is that I could do much better than buy & hold. But how? I haven’t been able to sort through the cacophony of analysts, pundits, and stockpickers. I just know I need a more objective, systematic approach to investing.
I have been a casual student of technical analysis for a few years and am finally convinced it is the investing approach that best fits my personality and probably the healthiest for my wallet going forward. Do I have everything I need? Let’s see:
• Magazines about technical analysis? 4
• Books about technical analysis? 4
• Bookmarked technical analysis websites? 4
• Technical analysis–based software? 4
Let’s see what I can do.