🧠 11 of the best tweets by @jposhaughnessy

Jim Sir has a spectacular ability to simplify complex topics and put them in just a tweet or thread.

I scraped his entire tweet library - here are some of my faves 🔥🔥🔥

THREAD...

A THREAD ON SL, TSL AND RE-ENTRIES-

WHERE TO PUT THE SL-

1. NEAREST PIVOT/SWING POINTS-

Normally I use this method for placing sl, In this method we use swing point for placing the SL.

As normally the stock would not try to go below previous swing point if it is to go in our direction.

2. ATR method-

Sometimes the Stock do not have any nearest pivot at time of buy, So we use this method as it gives us a level on basis of current volatility of the stock.

I use 1.5 ATR away sl , say the ATR at point of entry is 30, so I place sl
1.5 X, or 45 rs away from entry

In below example the entry is 120, ATR=5, SL= 1.5X ATR= 7.5 OR 113.

Nearest pivot was too far away, that’s why this method is used in these cases.

4. Anchor candles-

Anchor bars are those which have extreme Volume, gaps or wide Ranges.

Here, we place our sl below those candles which has the above characteristics.

(Thread) Why do I own individual stocks?

Thesis:

1. The digitalization of our world is 10% complete.
2. This megatrend will continue for at least another decade.
3. If you enjoy spending your free time on individual stocks, then the potential for outsized returns is possible.

What is my approach?

There are two parts to my portfolio.

- 40% in Vanguard All-World ETF. This is on autopilot w/ regular contributions.
- 60% in what I consider to be high growth stocks

I keep a balance by adding cash. No shuffling around unless it gets too out of whack.

The latter is the interesting part.

I invest in companies that can

1. successfully disrupt an industry with new business models $TTD $SQ $PTON $TDOC

2. further enable the digital transformation with their services and infrastructure $ZS $HUBS $TWLO $CRWD

I intend to hold my shares indefinitely and allow my investments to compound over time.

I don’t believe that it is possible to time the market. Markets go up and down. I hold on knowing that quality businesses tend to bounce back.

The list of reasons to sell is always long.

If you have full conviction in your holdings, then no single piece of “infotainment” should make you change your mind.

Ignore it + people who make predictions about the economy.

Trendline is basically use for majoring trend 📈 of any stock.

It is also useful for indentify demand & supply ....

Here it's applications 👇

➡️It is formed when a diagonal line can be drawn between a minimum of three or more price pivot points.

And that all three points must tested equally.

example 👇 #sis

➡️ Trendline is mainly useful for identifying trend 👇

⚡Uptrend - #happiestmind

⚡Downtrend - #bluedart

➡️ It is also useful for support & resistance.

Ex - ⚡ #happiestmind

⚡ #omaxe

➡️ If three point 📍have not be touched clearly then it is wrong ❌

Ex - ⚡ #bluedart

⚡#zeemedia

Working on some execution optimisation related backtesting. I have so far been executing with market orders only. Going towards higher lot sizes, I'd like to optimise for minimal slippage.

First off, on NSE, if you place a market order, you get filled at the best bid/ask right?

If we want to optimise this, the first non-creative idea one can think of is, slicing the order into different lot sizes, and placing a limit order for each slice at the mid point of current best bid & ask.

But this requires your latency to be the least.

Why would latency affect it?

I looked at tick historical data, and there are more than 18-20 ticks in a second (auction and quote combined).

Even if you keep 10 ticks per second, your best bid/ask can shift from the time you place to the time exchange receives the order.

So, the next best thing that people can do is place tranches of orders every 1s, 3s, 5s, 10s, 15s - in their preferred time range, and get filled at the midpoint or best-bid+1/2/3/4/5 in the depth.

What you need is liquidity.

But if you're trading breakouts, then it's highly likely that your limit orders may not get filled if the action is too fast.

So, a retry mechanism is required in such cases.

If nothing works, you convert your orders to marketable and get filled at worse slippage.