How to trade around a core position | Jim Cramer | Mad methods

FRI, JUL 26 20136:40 PM EDT

Here is the link. 

Mad Money host Jim Cramer explains his methods of trading around a core position. “Trading around a core position is an important basic trading strategy that everyone can use, even those of you who find the notion of trading, as opposed to investing, to be abhorrent,” he says.

00:52/07:12

Mad methods

1. New high list pullbacks
2. Insider buying at 52-Wk highs
3. Insider buying - heavy short-interest
4. Trading around a core position

Mad money

Cramer: Knowing how to trade around core position Could be helpful, especially in a crazy market

Sell some when price is high, and buy some when price is low - essence of trade positions

Trading is something for profit for short term fluctuations 

Using Google as an example - long term, volatile 

Do not buy all at once - tech bubble burst once

Commission will eat profit - 

Favor with disciplined players 

100 shares of Google, 5% up sell 25 shares, either direction works as well

Nothing is changed in fundamental - 

Not exciting - watch the stock - add more example - 

Too much on the table

Too little on the table 

Basically strategy 

next level - two chapters - Get back to the even - using option as strategy 

• Find a stock to trade 
• Add incrementally and sell decreamentally 
• Trade core position - commission should be considered as well
• Option as strategy - alternative 
• Call option - cheaper - Jim Cramer - Hedge fund - add up over the time

Have some disciplines - Trade - A lot of small gains - hedge fund - add up over the time

Using Google as an example 

Take some off when too much on the table

Add some more when stock is low and will go up 

Stock replacement - using call - high price stock like Google stock

Bottom line - Add up over time 

Change from balanced to low risk

March 16, 2020

Introduction

It is not easy for me to stay humble, not over-confident on my investment strategy. I got contacted by my friend on March 10, 2020, I was over confident and I did not expect that things can get so serious related to corona virus. I need to make change and stay on the course, but reduce the risk.

Asset allocation

It is so important for me to apply asset allocation instead of timing the market. But after carefully consideration, it is better for me to save some cash in my investment account, and I like to use those cash to hedge against equity asset instead.

Here is March 16, 2020 S & P 500 index:

If  I stay humble, and do not be too greedy, then I will not invest another $13,000 Canada dollars on TFSA in February, 2020. Instead I should show concern about Chinese in China, and learn how to prevent Corona virus spread instead of focusing on SPX return for another year, another 30%.

If I am humble, then when my friend Pamela contacted me on March 10, 2020, I will carefully consider her suggestion, and then adjust my asset allocation, reduce equity from 50% to 25%, with total investment amount over $100,000 dollars.

Now I like to take loss, and sell 25% of equities, and then use those cash to hedge against equity. I do believe that SPX will continue to go down at least 500 points to meet 2000, or 2009 level.