My Newbie System, Any advice?

[TerryPenny]

Hi, I've only been trading sinds October - About 9 months.

This is my system so far:
1. I use 2% of my account to determine the max value of my stop loss.
2. Calculate Stop loss for 1 Share.
2 Divide the max stop loss by stop loss for 1 share.

So 2 % of 10.000 is 200
1 Share is 50
Stop loss is 10%, so 5 each
Shares to buy = 200 / 5 = 40

I made a spreadsheet for that in open office, it also calculates other things like trailing stop, possible profits or loss, %raise needed to cover expenses, win/lose ratio...

3. I sell half at 20% profit, This covers my remaining 10% stop loss and expenses.
The percentage varies on what the stock does, for example if it's at + 22 % I place a stop for half at 20, if it raises more I move my stop.
If It's at 16% up and It's a bad day I'll sell half anyway. Then I fiddle with the remaining stop loss until I'm safe.

4. If the stock drops, but I think it's because my entry was badly timed, I buy half again (1 time only), but I treat it as a separate trade, with his own stop.
The intent here is not to average down.
5 I only buy stocks that are going up over a long time. price is close to EMA 20 and 50 and above 200.
6 Once They go up more than 20% I start moving my stop up.

That's it, no leverage, calls or puts. (otherwise I have to pay Tax to the Gov. Belgian rules...)
I try to follow these rules but sometimes.... I mess up

Result : Invested 5000 Euro, 6 months later added 5000, , Changed to dollar to trade Nasdaq
Lost 10% to Euro - dollar exchange price falling
Lost 15% because of "Tariffs" market drop
594 $ went to Broker fees and exchange tax
Still up 11 % so 11.097 euro, can't see it directly in dollars without having my platform changed to dollar.
67 % of trades profit, average win = 18%, average loss 14%
Drawback : 1200 euro during Tariff scare? no idea. Is it considered a drawback if you keep the shares?

Best trades : Robinhood markets, POET, Tesla, NNE (nasdaq)
Lessons learned: Don't lower your stop. Don't drink while trading.

I'd like to hear what long time traders think of this, just lucky?
I'm rather happy with the results, I learned some valuable things without losing money, And I beat the intrest I would have had in the bank.

 

[brettb]

I also started in October. If you're trading larger cap stocks then do some backtesting. You might be surprised how using stop losses does not increase returns. I don't use them and I sold nothing in April's panic.

The other thing I do is set fixed percentage profit points. That allows me to automate selling with limit sell orders. I used my backtester to calculate the best %. It turns out 5-10% is the best for almost all stocks because of the much higher CAGR. For example yesterday I bought a stock and it went up 2.4%. I sold because that's just such a massive CAGR and better than waiting another month for it to reach 5% or for it to crash and lose me 20%.

 

[TerryPenny]

I also started in October. If you're trading larger cap stocks then do some backtesting. You might be surprised how using stop losses does not increase returns. I don't use them and I sold nothing in April's panic.

The other thing I do is set fixed percentage profit points. That allows me to automate selling with limit sell orders. I used my backtester to calculate the best %. It turns out 5-10% is the best for almost all stocks because of the much higher CAGR. For example yesterday I bought a stock and it went up 2.4%. I sold because that's just such a massive CAGR and better than waiting another month for it to reach 5% or for it to crash and lose me 20%.

Thanks, I also didn't sell everything in April, in fact , I added some Poet stock. I suppose it depends, a stop when Nasdaq is rising is useful I think. However, I dont' get how you sell at 2.4% or 5 and still make profit. I need 3% up to break even with Lynx. Perhaps it's because I'm buying low positions of 1000$?.
I suppose a stop also depends on how much the stock moves in a day. However, moving my stop down only worked once so far (POET) but on my paper account I'm not that strict and it has about equal gains. How do you do backtests? I cant afford subscriptions right now, so I do them manually (somewhat) I'm at 13% now, but I renewed my assessment of profit, because unrealized profits are not real. So realistically, if I was stopped at all positions my profit would be 5%. I've changed my system so I only risk half my profit. My goal is to beat the intrest I would get from my savings account and inflation. So everything above is a nice bonus.
I also find it difficult when to sell, Palantir and Nvidia are up about 10%. Part of me wants to sell, other part wants to keep because I sold Robinhood at 55 and it went to 100. POET went to 7 and I sold at 5.5