The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros

CHAPTER 4

Know Thyself

Chris Peruna, @chrisperuna

Chris is a great trend follower with an impressive track record. He keeps investing simple. I have been reading his blog since my Wallstrip.com days, and he is a must-follow on StockTwits. The StockTwits stream is about ideas, but sticking with trends is not an idea that needs constant attention. Less is often more. Chris makes less great.

Successful traders always follow the line of least resistance—follow the trend—the trend is your friend.

—Jesse Livermore

FOLLOWING IN THE STEPS OF MY FATHER

I am a part-time trader with a full-time career in architecture.

As a teenager, I first gained an interest in trading from my father, who also traded stocks and options from the 1970s to the 1990s. My father's specialty was to trend trade the major moving averages with a focus on stocks with strong earnings and sales. To this day, I still trade heavily based on his trending 200-day moving average plays, although I have slightly modified my screening methods to incorporate more technical analysis than fundamental analysis.

I am looking for gains of 25 percent or more and losses no larger than 7 to 10 percent (preferably smaller). Please understand that this 7 to 10 percent loss is calculated into a position sizing spreadsheet that risks only a maximum of 1 to 3 percent of total capital in that account. The foundation of my approach is rooted in the CAN SLIM philosophy, but I developed my system with detailed position-sizing calculations ...