Stock Trading Homework

15 to 30 minutes/day - 2-3 times a week

Experience stock traders agree that one hour of fundamental analysis a week is required for every stock you're holding. Since my strategy does not invests in individual stocks, we are blessed to limit our home to some simple tasks. The following steps are maintenance tasks of your portfolio that should be performed at least twice a week (Tuesday's and Thursday's) and every time a position has been sold or bought or the stock is down trending and crosses the moving average. Remember: we don't buy and hold, we buy and control our investments.

Note: We recommend you use a spreadsheet to update your entry points, exit points and log entries. A formatted spreadsheet can be downloaded. You may use MS Excel or there is a free compatible version from Sun OpenOffice http://download.openoffice.org/

What to do when on Vacation: some of us take a laptop computer with us when on a vacation trip. However, this may not works for everybody, and this is what I recommend you do. If your brokerage account has "trailing stops", put a 6% trailing stop, otherwise use a 5% stop order for all your long positions. A good choice for swing trades is not to hold any positions while on vacation. When you are getting back, just cancel all your stops.

Step [1] Updating the Sell Stop Order information table (spreadsheet). [7 min.)
This is probably the most important task for your home work. It's an exit strategy, developed to preserve your capital and of course profits you may have attained. It requires to read the stock chart after the market closes.

Step [2] Updating the Buy Limit Order information table (spreadsheet). [5 min.)
This update is required for new or additional purchases only.

Step [3] Review and place Profit Target order. [5 min.)
This is an optional task - see profit target page for details.

Step [4] Updating the trading action log (spreadsheet). [5 min.)
When a position is bought or sold, we want to make a log entry to keep track of all activities. In this way, we can easily track all our stock trading action.

Step [5] Updating the Online Brokerage Account. [8 min.)
This is the last step. In order to make things happen, we must log in to your brokerage account and submit all the changes.

Step [6] Review the Stock Trading Game Plan (optional).
When not sure about your stock trading result, just review the Stock Trading Playbook. It takes a lot of discipline when it comes to stock trading. Some compare it to gambling, it's a sort of the same excitement.

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