Modern markets are volatile and there is a need for improved risk management over standard buy and hold asset allocation. These are the 30 Day Trading portfolio principles for managing our money. This book is the result of our trading experience and background reading. We have actively traded many of these strategies on our journey to discover what we believe works. The trading strategies and risk management we now use are the direct result of this experience.
We start with a high level review of possible trading strategies and pick our strategies based on risk management. We then define our portfolio risk measures and portfolio ideas. These ideas are primarily based on managing downside risk, then on upside potential. The overall investing approach aims for capital gains and income.
We don't claim any insider market insight but these trading strategies chosen have worked for us over many months and years (including protecting our portfolio during the credit crisis).
The ideas represented here do require some management and this isn't a totally hands off approach. Some of the portfolio ideas presented use options for hedging and income while still leaving the opportunity for capital gains. To execute this approach you would have to comfortable with allowing some short term capital losses on option hedges to protect core long term stock positions. If you not comfortable investing the time to actively manage the portfolio you may get better results with a more passive investment approach.
We are not trying to hard sell a particular approach, we are just saying what we have found works for us. Like all portfolio management, this is not a one size fits all. This is the summary of our portfolio principles.
In the second part of the book, some basic option trading understanding is helpful but definitely not required. A high level understanding of buying puts and selling calls will help. If you are not familiar with these option terms you can still read the book and refer to the many online or book references as you go.
Options can be complex and many investors are not familiar with them. They often have a bad reputation as being “high risk, high reward” or just for pure speculation. However we will outline trading strategies where options are used to significantly reduce the risk of an entire portfolio. We will show how to use them as “insurance” (or hedge) against stock sell offs.
This book looks mostly at motivation and philosophy for our portfolio principles. We focus on higher level portfolio strategy and overall risk management. The book does give one detailed case study with actual trades for 1 year on a sample stock. Detailed trading approaches are covered in the “Trading Strategy Blog” at http://www.30daytrading.com/ trading-strategy-blog/
We start with a high level review of possible trading strategies and pick our strategies based on risk management. We then define our portfolio risk measures and portfolio ideas. These ideas are primarily based on managing downside risk, then on upside potential. The overall investing approach aims for capital gains and income.
We don't claim any insider market insight but these trading strategies chosen have worked for us over many months and years (including protecting our portfolio during the credit crisis).
The ideas represented here do require some management and this isn't a totally hands off approach. Some of the portfolio ideas presented use options for hedging and income while still leaving the opportunity for capital gains. To execute this approach you would have to comfortable with allowing some short term capital losses on option hedges to protect core long term stock positions. If you not comfortable investing the time to actively manage the portfolio you may get better results with a more passive investment approach.
We are not trying to hard sell a particular approach, we are just saying what we have found works for us. Like all portfolio management, this is not a one size fits all. This is the summary of our portfolio principles.
In the second part of the book, some basic option trading understanding is helpful but definitely not required. A high level understanding of buying puts and selling calls will help. If you are not familiar with these option terms you can still read the book and refer to the many online or book references as you go.
Options can be complex and many investors are not familiar with them. They often have a bad reputation as being “high risk, high reward” or just for pure speculation. However we will outline trading strategies where options are used to significantly reduce the risk of an entire portfolio. We will show how to use them as “insurance” (or hedge) against stock sell offs.
This book looks mostly at motivation and philosophy for our portfolio principles. We focus on higher level portfolio strategy and overall risk management. The book does give one detailed case study with actual trades for 1 year on a sample stock. Detailed trading approaches are covered in the “Trading Strategy Blog” at http://www.30daytrading.com/ trading-strategy-blog/
