How to Manage Your Portfolio for Attractive Gains

This pertains to trades that you are in, not trades that you are about to enter. Consistency and discipline will show up on your P&L. That’s the numerical representation…that’s alpha.

If you see a chart that comes through you Twitter or StockTwits feed, delete it. It’s not helpful, insightful, although it might be entertaining. You don’t have the emotional makeup of the person sending it, so it’s irrelevant to you. It’s not like you’re going to put a trade on because you see it on social media.

Worse, if there are overlays on it, you might get a sense that they are important.

How do you handle your winners?

Do you feel enough anxiety to want to take it out of your portfolio and get rid of it?

Are you afraid you’re going to lose it?

Those are emotional issues, not financial ones. These emotions might appear for you whether you’re a discretionary chart reader or system trader.

Do you have the willingness to love it and let it grow up and develop into something amazing?

Do you become overbearing and stalk the trade and keep it on your monitor all day?

When the vol expands, you can trim the position so that you have the same percentage risk that you did when you added the position to your portfolio, or when you added your last risk unit.

When vol expands, you can cut the number of contracts per risk unit.

Allocators are looking at your daily equity volatility and in today’s environment, they are looking for low-vol gains.

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