By Mark Crisp
STOP trying to create the perfect trading system. There isn't
Phew..what a relief. Stop spending all those hours creating
more and more trading rules and realize this:
Money creation in the stock market is made from CONCENTRATION.
That's right. Trading the very best stocks atthe right time
with enough capital to make a big difference.
You must go from wealth CREATION to wealth maintance in this
game. Unless you plan on "investing" for the next 25+ years
building wealth slowly.. this is my plan of how you can make
millions in the stock market:
In Darvas's book "How I Made $2 Million..."
How many looked at his position sizing? In his early trades
Darvas only trade 1 or 2 stocks at any one time on MARGIN!
when he got upto over $500,000 did he start diversifying a
little. Most people overlook these facts.
MY Momentum Stock PLAN:
CONCENTRATION BUILDS WEALTH DIVERSIFICATION MAINTAINS WEALTH
$2 MILLION+ ACCOUNT MAKING 20-30% P.A
$50,000 Trade 2 stocks with half capital in each.
RISK Per TRADE = 5%
When at $100,000 Trade 3 stocks with 1/3 capital in each.
Risk Per Trade = 3%
$500,000 Trade 5 stocks with 1/5 capital:
Risk Per Trade = 2%
When at $2 Million Trade 8 stocks with 1/8 capital:
Risk Per Trade = 1.25%
You first have to create wealth in order to maintain it.
trading only two stocks at a time may be deemed to “risky” by
the “professionals” you must be very selective on the stocks
you trade. Quality beats quantity. Especially when you
concentrate so much.
This is the only way a small account can break into the big
time. You must not only focus your efforts in the early stages
but you must also onlytrade the top 0.1% of stocks in the
marketand get yourtiming SPOT ON.
About The Author: Mark Crisp, A Successful Momentum Stock
Trader and Author www.stressfreetrading.com