Strategy Overview

This page attempts to provide a simple and concise summary of how I view capital (money) and manage investment risk using technical analysis to meet my goals.  

See disclaimers here.



Capital
Money is a form of capital.  Humans use money to purchase other forms of capital that are vital for their survival and more.

Humans invest their money (principal) in other capital (e.g., a "security") to get returns to maintain or increase current and/or future purchasing power. 



Risk
Investment risk is the potential loss of capital and is a function of "what" investment is chosen and "when" one buys, holds, and sells that investment. 

Investors often ignore the "when" aspect of risk.  I focus on the "when" aspect of risk.

Investing involves speculation that certain assumptions will hold. "When" they don't, investors risk losing purchasing power.


Goals
Two simple goals help maintain/increase purchasing power: 1) Protect initial capital (principal), and 2) Protect and maximize capital gains.

A simple strategy of achieving these goals is to "buy and protect".


Technical Analysis
Technical analysis provides rational/objective knowledge concerning price trends that allow an investor to "buy and protect" by understanding "when" certain assumptions hold and "when" they do not.

Price trends are driven by supply/demand for an investment security, which is dependent on what the majority of investors do with their capital, whether or not it is judged by others as rational, correct, and/or realistic at the time.

Regardless, price trends, supplemented by other technical signals and indicators, are an investor's friend and should determine when to buy, hold, and sell any investment if the above goals are to be met.

Investing can then be reduced to simple if/then decision logic statement(s).  Example: If support = yes, then buy and hold.  If support = no, then sell.