I’ve started paper trading again. I’m always interested in the stock markets and I wanted to prove out if I could find a system that works for “me”.
My doubts are that I want to spend too little time on it so it may be too “lazy” a system and it isn’t really possible to earn money off it consistently.
Basically, I have a full-time job, but do have time in the evenings (as I find trading super interesting) to do a bit of reading and check up on things. My goal is to have a system that has the following objectives:
- No more than an hour a day of my time (once system is developed…will put in more effort for first few months).
- I cannot conflict with my employer. So do it after work so it would be looking at end of day data. With trades and stops being inputted in the off hours.
- Trading trends with a goal of not holding a stock for more than a month (unless that trend still looks good of course…but I want to see good movement within the month). Otherwise I consider it a failure and will get out of it.
- Long and short trades.
- Wouldn’t risk anymore than 1-2% of capital on any trade (so stop out with commissions no more than 1-2% of total account size). I realize that stock could gap overnight and I would get burned occasionally.
I read a book called Trading Your Way to Financial Freedom which provides useful metrics and tools to evaluate your system. I created a spreadsheet to track this and I’m also using the Stockscores trading simulator to handle my fake trades. It allows you to enter stops, comments, and records performance data of your trading.