Episode #3 - The strategy

Week 19 - 2025

In the foreword to his book “The disciplined trader”, Mark Douglas wrote that he ‘sincerely feels that success in trading is 80 per cent psychological and 20 per cent has to do with methodology’. As with all goals you want to achieve, you have to stick to your plan. It is a crucial requirement and I am the first to admit that staying disciplined in stock trading is more difficult than achieving any other goal, but the method of risk mitigation, in addition to discipline, are also of incredible value.

Over the past few weeks, I have been shaping my strategy and I must say: it has not been without a struggle. Since I was mostly into value investing in recent years, I sometimes had to be reminded of my previous learning points the hard way.

I (re)started swingtrading last month with shorter hourly and 2-hour charts, but soon found it too fast and too intense. And actually, I already knew that. I had switched from shorter to longer charts before. So apparently I need to experience it a few times before I automate it.

Another example is crossing the EMA-20 line. Yesterday, that was the case with American Express. I sold the stock, but it later recovered to the old price. I remember struggling with that earlier too. Do you sell when the line is crossed or do you wait until the end of the trading session with the risk of it falling much further?