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My Trading Approach
Swing trades focused on Mega-Cap Stocks and Options
- I make only one trade per week. I buy at the open on Monday and sell at the close on Friday (or before, more later about stop-loss).
- I focus on US mega-cap stocks, with a market capitalization higher than $150bn.
- I trade exclusively call options. I select short-dated, in-the-money options with an expiration date of one week and a strike price 7 to 15% below the current stock price.
A momentum strategy based on a proprietary algorithm
- I collect various momentum and technical indicators for each stock in my stock universe (US mega-caps): Moving averages, RSI, MACD, stock performance, 52w High / Low.
- I perform a comparative ranking to find the best momentum stock among the specific group.
- I then assess the confidence level by looking at the absolute momentum for the weekly pick and the market overall. It is then compared to historical data since 2019 to evaluate the likelihood of success.
Optimized trading plan for maximized gains and manageable losses:
- I primarily use the confidence level to define the leverage and the size of my position.
- To preserve my capital and lock my gains: I withdraw all my profits weekly and never add more funds to my trading account.
- I usually exit my trade if the stock is down 2% or up 6% vs. the Monday open.
My options trading performance in 2022 is up 218% after 10 weeks. Even without leverage, the strategy generates sizeable returns in absolute and relative to the SP500. My Weekly Stock's picks delivered a cumulative return of 400%, 5x the performance of the SP500 since 2019.
I can't link my brokerage account to Commonstock as I am not based in the US but all my trades are shared timely on substack.
Read more about my trading approach on the link below:
You can see below what I have traded in 2022 and my weekly returns. As I follow a momentum strategy and Energy is the best sector in 2022, no surprise that I mostly traded oil stocks:
myweeklystock.substack.com
My Weekly Stock - Trading Strategy
Dear subscribers, You will below more details about my trading strategy. I initiated my research in 2019 and spent the following two years collecting data, refining my algorithm, and paper-trading my stock picks. In 2021, I felt confident enough to put in actual money. After a very successful year, I have decided in January 2022 to publish my stock picks.
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