I stay 100% invested except it takes me a week or so to reinvest after I sell something. I have scoring criteria for deciding what to buy. I decide discretionarily using a weighted "purchase candidate spreadsheet," which I adjust according to the situation. The criteria mostly pertain to value and momentum. I have never had to go short; there have always been several assets to be long in. I feel the weakest in 1) knowing the universe of investments that would suit me and 2) my "sell spreadsheet" wherein I decide whether it is time to sell an asset. Again, I make the sell decision with discretion. I don't have stop loss orders. No firm preliminary stop loss decisions. I just have an ongoing idea of at what price I will deem a trend to be dead, based on my daily review of my holdings. I'm net yet zeroed in on how many days should be built into the MAs and other indicators that constitute the criteria, so as to match my "hold for weeks or months" strategy. That is, I am not yet definitive on how far to let price drop before I deem the trend to be dead. Selling is the hardest because you may have just been whipsawed and you have to be unemotional. I've been doing this for six months and am still evolving. I've done some things right, some wrong. It's starting to feel more natural now. It doesn't require nearly at much time as it did at first. My book-keeping is decent. My risk management is informal but OK as far as I can tell. It's good to see how others have done similar things. What should I work on next?
Your exits.... Money is made on the exits more often than the entries. Few of us have a system that is better than 50% win rate. Mine is around 53% give or take depending on the market conditions. So you could flip a coin and be right nearly as often. But it's how you manage your risk (decide stops and shares in the trade,....position sizing) and how you exit trades to protect profits that largely determine your success.
For those of you who consider yourselves intermediate- to long-term traders, on average and all being equal, how many days would you put in your SMA (or EMA?) in order to say that, when price drops below it, the trend is deemed dead and you sell? I am leaning toward "when the 3-day EMA falls below the 30-day EMA" as the signal, except I might use the 60-day EMA instead.
I am sorry but my definition of a trend being broken is only partly based on EMA crossovers. I mostly use Support and Resistance lines along with other indicators and finally EMA as a small part. For me they must all match up on multiple time frames and all saying the same thing. Of all of those the S/R lines are most important to me. But like everything else in TA it is all quite subjective and open to interpretation.
I use S & R too, in that I draw a channel around the item's price action, and consider selling if it falls definitively out of that channel. But not all time frames are relevant. A channel drawn on the one-week chart, for example, would seem irrelevant to a long-term trader. The 3M, 6M, and 1Y charts are more applicable, wouldn't you agree? Whether I use channels or MA crossovers, it is the time scale I am trying to zero in on. Too short and I jump in and out too often. Too long and I miss opportunities. How do you strike the right balance?
There is no right answer Steve. That answer is different for everyone. Although I use EMAs I rarely use them as a crossover to tell me to buy and sell in a trade. I use them more to tell me DIRECTIONS of the trade when confirmed by other signals that tell me the same thing. I use other factors to decide buy and sell signal. You have to decide how active you want to be and then choose a timeframe you want to trade. Generally, you might use a smaller time frame to help time entries and exits on a longer time frame. I am a swing trader so I focus on weekly and daily charts and sometimes hourly and monthly. They all work together. You have to figure some of this out on your own. I recommend reading stuff by Elder and Van Tharpe to get started. They each have several books and will help guide you to figure out what kind of trader you are and developed strategies that suit you. The holy grail system is the one YOU develop for YOU to trade. You may also want to get a subscription to a website that has stock charting on the site and even some commentary and plenty of articles on TA. Good Luck