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Read our free, updated as of Mar 3, 2022, Dr K report on how to optimize your mind and body so you can boost your focus when trading the markets.
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Chris Kacher
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FAQs Frequently Asked Questions

Market Lab Report
Dr K. states, initial purchase, 25% of trading account and he likes 12 - 18 positions (15-25% of account in each and adds to with 2nd/3rd/4th purchase). Can you explain in more detail these numbers.

That is my preference however it also is a function of the strength of the overall market.

Each investor must find their own risk/reward preferences. This will affect position sizing and pyramiding as well as sell points. Some may have longer hold times so prefer to use the 50dma while others may prefer to use the 10dma. Still, others may use a combination of the two moving averages as sell guides.


Note, my rules may not work for someone who is on the conservative side of investing as such a person would likely not tolerate the type of volatility to which I am accustomed, and thus would sell at just the wrong time.

That said, in practice, I let the stocks tell me what to do. As I see stocks issuing buy signals (pivot points), I will buy the best. I may find my portfolio holding a number of names if the market is strong enough. I may hold 12-18 positions in a strong market on full margin. I will then reduce position size on the weaker/slower names, and add to the stronger ones at logical buy points. If a new stock appears to be stronger than my weakest holdings and is issuing a buy signal, I will add that new stock to my portfolio, while reducing the size or selling out entirely the weakest position. This has the effect, over time, of force feeding money into the strongest names.

First published: 3 Oct 2010
Last updated: 5 Apr 2012