15 Tips to Improve Your Trading

10/10/2013 6:00 am EST

Focus: STRATEGIES

Frank Zorrilla

Founder and Chief Investment Officer, Zor Capital

In a market environment distorted by monetary policy and political chaos, momentum trader Frank Zorilla of ZorTrades.com, shares some tips to help you keep your focus on what’s important.

Stocks have done some serious decoupling from the indices since August. I base this on my performance since then, and if you follow my watch list, you'll see that some stocks on the lists have been acting as if the market has been on a tear. It wasn't long ago many called stockpicking dead, and getting involved in ETFs was a must.

Some of the standouts from this week’s watch lists: MOBI +45%, BITA +27%, AIQ +23%, VIPS +17%, SLCA +13%.

Here are some a few things I recommend:

  1. Tune out the noise.

  2. Tune out the noise.

  3. Tune out the noise.

  4. Figure out what your edge is.

  5. Learn how to lose; you will be wrong 50% of the time if you are good, if you are great you could be right 30% of the time and still make money.

  6. Try to eliminate any bias to a stock on your watch list. On any given day, you don’t know what stock will be the big winner so you have to be able to pull the trigger on the ones that trigger and play the probabilities.

  7. Know your time frame and yourself. You can produce large gains with many trades and low volatility or with a few trades that you hold on for a while but you will also suffer some big volatility.

  8. Constantly go over your recent trades and watch lists to see what is working and how it’s working.

  9. Tune out the noise; I’ve been browsing some books lately, one of them made all his money buying IBD-type stocks; over $15 dollars, accelerated growth and EPS etc, and the other guy made a fortune doing almost the exact opposite with beaten-up stocks left for dead. Know what is important within your trading time frame, and do your own homework. Money can be made with all type of stocks, a lot depends on what the market is favoring and your time frame.

  10. Come to play everyday, be prepared especially on the down days.

  11. Know your advantages; don’t trade like Fidelity Contrafund unless you are moving billions like them. Liquidity on a stock is largely dependent on the size of your portfolio. A stock trading only 250k shares might not be liquid enough for billion-dollar fund but it is for most retail clients.

  12. Constantly try to improve by recognizing and working on your weaknesses.

  13. Try to stick with the trend and not let what you think is logical stop you from believing in the trend. This is when tuning out the noise helps.

  14. Position size and risk management is the key to all this.

  15. Stay humble, the biggest drawdowns normally come after big up swings. The minute you feel euphoric take some chips off the table.

By Frank Zorilla of ZorTrades.com

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