Investing is a marathon, not a sprint. It's a journey, not a destination. Investing is a process in which you constantly have to evaluate yourself and apply lessons you learn in order to become more and more successful over time. Most importantly, investing teaches you a lot about yourself as well.

The beauty of investing is that over the course of time you figure out exactly what your "sweet spot" is. I define "sweet spot" as being your absolute comfort level with your portfolio construction. When you hit your "sweet spot" you know it. According to this Jason bond review, it explains why you sleep better at night, you get excited every morning when you wake up to learn something new about the penny stocks you are invested in, you feel like you are invisible to the markets because you are so focused only on your investments. Simply put, the "sweet spot" is a great place to be. But it is tough to get there. This process takes time.

For me, finding my "sweet spot" in the world of microcap investing luckily didn't take long. I have always been the most comfortable with my investments when I hold only a few, 3 or 4 at the most. When I swerve away from that bedrock principal of mine, I lose focus and I can feel stress levels become much higher and my clarity for all my investments becomes challenged. I have isolated this to being because it's near impossible to know everything about all your investments if you hold more than 3 or 4 companies in your portfolio...it's just too much. I would rather be an expert in understanding 3 or 4 companies, than be less of an expert in trying to understand 7 or 8. I love being highly concentrated in several companies as opposed to spread thin among many. While it is true that the more concentrated you are, the more risk you take, it is also true that the risks can be significantly mitigated by ensuring you conduct significant upfront and ongoing due diligence. 

With all the above said, I greatly deviated from my "sweet spot" in Q4 2015/Q1 2016 when I added several companies to my portfolio. I did it for what I thought was good reason as the TSX-V continued to plummet and the opportunities to pick up some companies at what I thought was a deep discount was incredibly attractive. However, picking up additional companies has caused me to greatly lose focus on the companies I feel have the most explosive potential in my portfolio. For months I have been operating outside of my "sweet spot"... and I need to find my way back. 

I will be trimming my portfolio down to 4 companies that I have the highest conviction in from the current 7. I started that process yesterday with one of my holdings, and I will continue to sell on strength for a few of my investments. I will keep you guys updated as to when a position is fully closed out. 

Remember, selling is ok. You don't have to hold stocks forever. But what is most important is that you do hold companies that you have your highest conviction in for as long as your investment thesis is intact, for that is the only way you will put yourself in a position to achieve 10-100x returns, or more, over a period of time.

So, what's your "sweet spot"? Let the discussion begin in the comments section below.

So you identify a stock that you want to trade and then come up with a specific point of entry. This is the easy part. But how do you determine when is the optimal time and price(s) to exit your trade? This is effectively referred to as trade management and it is a very important part of every successful traders trading plan. Without having this framework laid out ahead of time for every single trade that you place, I can assure that your emotions will almost always get in the way and cloud your judgement regarding when to exit your trade. 

Some people will go as far as to say that your entry really doesn't matter because if you manage your trade correctly you should be fine entering at any time. I don't completely agreed with this because I feel if you aren't careful choosing the proper time to enter, while your trade may ultimately still result in a profit, it could take a lot longer for this to occur. This is normally what happens when a person
enters a trade for a day trade and then ends up turning it into a multi-day hold rather than sticking to their initial plan and cutting their loss or taking profits during the same trading day. This is one of the main reasons a lot of traders fail because they deviate from their plan or even worse go into the trade without any idea about what to expect. There is nothing wrong with swing trading but you have to look at the chart and determine that the potential upside to your target is most likely not going to occur in a single trading day and therefore you can size your position to account for the increased risk that is the result of holding a stock overnight.

Since I like to redeploy my trading capital into the next trade as soon as possible (rather than sit in an idle stock position for days, weeks, or months) I prefer to be more choosy about my entries. None the less, I still feel that managing your trade is incredibly important. For this reason I always have between two and four projected targets in mind for every trade that I take. That is not to say I wouldn't deviate from my plan if an expected positive event occurred such as a sudden move in the stock which blew through multiple price targets. In this case I would probably immediately take off 3/4th's or even my entire position right then and there because large unexpected gains do not
usually last for very long in the stock market. 

Through years of a experience I found out for me personally I like to lock in profits along the way as the stock goes in my favor. Even though I usually end up with a smaller over profit than if I were to try to hold the entire position to my final target, more often than not I found these trades would turn into losers. There's nothing worse than having a $5k-10k profit and then a couple minutes later seeing it turns into a loss. This is why I created this rule. Not everyone may feel the same as me and this is the reason why I say you have to tailor your trading plan so that it will complement your own personality.

There is no one size fits all trading plan. What works for one person will not necessarily work for another but the good news is when you have a template like the one I have created here you can easily find what is suitable for you.  

MGT Capital Investments (MGT) was a penny stock that got pumped by another billionaire over the past week. On May 6th the stock was trading at $.36 and yesterday the stock topped out at a whopping $5.58 for a 1450% gain in just 6 trading days! Last year there was a new trend that occurred in small cap stocks whereby billionaire investors realized they could manipulate various small cap stocks by taking a multi-million dollar position and then disclosing it to the public causing a huge short term spikes in these companies. First it was Carl Icahn, then Oprah Winfrey, then George Soros. Now we saw billionaire John McAfee, the creator of McAfee antivirus software disclosing that he has agreed to join MGT as executive chairman and CEO. The reason why this scam works so well is because the uninformed general public have no idea what they are doing and therefore they just follow what the media or some other clueless person tells them is a sure thing because they don't think the media can lie or make things up. Day traders also like to jump on board anything that has a lot of attention and volume and this is a perfect recipe for moves in both directions in a short period of time. 

Now my strategy for these type of trades is fairly straight forward. I want to find these stocks as early as possible using my intraday scanner and then look to get long with a core position. On the first few days I will be looking to scale out of my position. The only shorts I will take are on a stock which moves way outside it's mean, but these will only be scalp trades because the momentum almost always calls for higher prices over the coming days due to the lag in dissemination of market news to the general public which usually takes at least 2-3 days. Noting this I am able to craft my plan and utilize my trading system to choose the optimal times to enter and exit. 

The second big trade I like to take is a breakout to new highs above the previous high reached during the first spike which will usually come about several days to a couples week after the initial spike. The momentum and attention from all the buyers that missed the first move will certainly push a stock higher in the coming hours and days. Not to mention day traders love to keep them momentum alive in these high volume stocks which usually means they can move a lot more than you would think. 

In this case the break of the $1.87 high in MGT is what sent the stock up more than 150% over the next 3 days before plummeting 60% in one day! Despite what you might believe, this is a predictable pattern which is exactly the sort of thing which has helped me to earn a fortune and keep away the 9-5 job over the past 14 years... Now some may say why wouldn't you just buy and hold a stock like this and again this should be very clear when you look at the chart below and see the huge red candle. The fact is it's not that hard to enter a stock and have it go up big in a short period of time, but if you don't have a system for choosing when is the optimal time to close out your trade and lock in your paper profits,  99% of the time you will end up giving back all your profits. 

Greed may seem to be helpful when it comes to maximizing profits but the problem is it's way to easy to keep telling yourself you are going to hold out for a little bit more profit and then BAMMM! You watch the stock drop 50% and you give back sometimes ten's of thousands of dollars in minutes. Successful traders know that it's much better to go for base hits rather than swinging for home runs and this is why traders like myself are able to earn consistent profits at the expense of all of the inexperienced people whom get burned nearly every time. Don't end up getting burned. There's a science to extracting profits from penny stocks like MGT and I can show you exactly how it is done. If you understand how these stock moves and which areas of supply and demand could cause large turning points, you can literally get rich over time trading these type of stocks. Seriously...