5 new questions:
1) Rule to pick up best setup to buy
2) How do I prevent chops & whipsaws while using EMA’s
3) Holding over earnings
4) Strategy for managing multiple portfolios
5) Calculating hypothetical end-of-day volume

Do you have a question for me? Use the free forum. Links are below!

The strong down day in the stock market was not a surprise. The NASDAQ was 16,5% above its 200 EMA. That's a very high value. I see everything above 13% as extended.

Another observation was the shift from growth into value stocks in the last weeks. That was a sign that laggards are caught up. The same was true for lagging growth stocks. In such a situation I change my trading horizon from mid term to short term. You can catch some nice short term moves in laggards, but you have to sell them very quickly because they are the first ones which get sold when the markets correct.

What's next? I see that a lot of leading stocks held up very good during the correction day. A lot of them continued with their consolidations or corrections. That's a sign that leaders weren't sold by institutions. Instead the laggards which broke out last were sold.
On the other side you have to take every 5% correction in one day seriously. That can be the start of a longer consolidation or correction in the stock market. It's best to observe the stock market from day to day and decide what to do.

I removed a lot of stocks from my watchlist and replaced them with new ones. I always do that if the markets correct. My goal is to have only very strong stocks on the watchlist.

This week I have 41 stocks on my watchlist, 6 less as last week.

The most of you know me only as mid-term trader. I write about that in my newsletter, the ebook and on Twitter. However, I am not a pure mid-term trader. I also trade short-term moves from a few days to weeks. It always depends on the situation in the stock market. Especially when the market is extended, I tend to trade more short-term moves because I already sold the most of my mid-term positions.

You don't have to label yourself with one style or time horizon. Short-term trading requires different skills, risk management and time expenditure. That's not a style for everyone, especially if you have family and a time consuming day job.

The benefit of trading short-term is the fast turnover of trades and accumulation of profits. While you have to stay multiple weeks in a trade to make a 5R return with a mid-term approach, you can accumulate a few 1R and 2R trades to make the same amount of money in a few days. But as I said: It's not possible for everyone to trade that style.

The most traders you can find in the first ranks of the US Investing Championship are short-term traders. They trade intraday or short-term (a few days). The secret is the accumulation of profits, aggressive risk management and huge position sizes.

I personally don't trade intraday, because it doesn't fit into my life. I don't want to sit in front of the screens the whole day. But trading short-term moves helps me to benefit from more market situations. This newsletter will not focus on short-term trading but will keep the mid-term view, because I think it's a better approach for the most traders and especially beginners.