Trading Conviction And Sizing: Chat On Becoming A Successful Trader

I wanted to share what I thought was an important discussion we had in chat today on a stock that I got bearish on.

Here's how the conversation went in chat and I think these points are critical and should be reviewed by everybody many times for anybody who is in the business of trading stocks. Print this out and stick it on your fridge and review it again and again.

Question in Chat:

"...find it challenging to figure out how to avoid getting whipsawed by the price action when shorting."

My answer: [please excuse my syntax. This is how I type in chat sometimes when jamming.]

"if cant handle the swings means too big if can handle the swings or are longer term, not too big everybody's different but thats the general gauge

some people 5% is too big and some people 50% is too big

its personal 

If you agree with my thinking [on said security]. depends on personality

if you didnt buy into my thinking then too big

markets are oversold now so there's bounce or hold. have to be patient to have the

market that helps us to be bigger

When i said first break and things like that.

its a rhythm. its not easy shorter term trading

and its less easy if you didnt buy into the thinking

everybody needs to self evaluate, where do i stand. what happens if it goes against me 

how will i feel with losses of x at size y

Its a very difficult process, especially a period of change from bull psyche to bear psyche, most dont believe so we see choppy markets

but i think i said and i apologize if not, but if oversold, its not the time to get big on a short. b/c markets can bounce. downtrend is a good time and first break is a grt time to add.

i mentioned a few days ago even before a break someone asked me if its a good time to short some mag 7 stock and i said yes because nobody sees it 

when people start to see it, it gets more competitive

so you have to have a game plan, i think using my oversold, overbought, downtrends, can help a lot . of course there's no perfect system and trader demons affect everybody 

so conviction in the fundamentals, inner honest believe that's the fundamentals. then playing that based on the technicals

key: so conviction in the fundamentals, inner honest believe that's the fundamentals. then playing that based on the technicals

and sizing is based on how much you can sleep at night. i believe people should sleep at night"

Subscriber, "Thank you, this has been very helpful"

That was our chat exchange on what I believe to be a critical topic in trading successfully. We have many traders in our chat doing very well because we build conviction in layers starting with fundamentals with key data that's backtested to show to matter, then seeing it form and confirmed in the technicals, first short term, then medium term.

Hope you enjoyed.

Wishing you success.

Please share.

Try Trader Chat click here (Market, Bitcoin calls, Big-cap stock calls like Nvidia (NVDA) and Tesla (TSLA), macro and commodity calls, all in one by a pro Fed, tech, and markets expert with experience.)

Starting in March 2025 there are no free trials but cancel any time.

All investments have many risks and can lose principal in the short and long-term. Options have even more risk and should be fully understood before entering. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Opinions given are at this moment and can change after this is published. If our calls are made public (outside the service) we may or may not update our opinions publicly.

Picture Credits