Money creation in the stock market is made from CONCENTRATION. That's right. Trading the very best stocks at the right time with enough capital to make a big difference.
You must go from wealth CREATION to wealth maintenance in this game. Unless you plan on "investing" for the next 25+ years and building wealth slowly.. this is my plan of how you can make millions in the stock market:
In Darvas's book "How I Made $2 Million..."
How many looked at his position sizing? In his early trades Darvas only trade 1 or 2 stocks at any one time on MARGIN! Only when he got up to over $500,000 did he start diversifying a little. Most people overlook these facts.
MY Momentum Stock PLAN:
CONCENTRATION BUILDS WEALTH
DIVERSIFICATION MAINTAINS WEALTH
END GOAL:
$2 MILLION+ ACCOUNT MAKING 20-30% P.A
Start with:
$50,000
Trade 2 stocks with half capital in each.
RISK Per TRADE = 5%
When at $100,000 Trade 3 stocks with 1/3
capital in each.
Risk Per Trade = 3%
When at:
$500,000 Trade 5 stocks with 1/5 capital:
Risk Per Trade = 2%
When at $2 Million Trade 8 stocks with 1/8 capital:
Risk Per Trade = 1.25%
You first have to create wealth in order to maintain it. Whilst trading only two stocks at a time may be deemed to