Stock Trading Strategies, Tips & Software | Core Position Trading™ Stocks and ETFs -- CPT Overview

Core Position Trading Defined
No Guessing, No Plunging
No Need to Trade Risky Stocks
Buy Low, Sell High
Let The Market Tell You What to Do

Core Position Trading Defined

A Core Position is defined as a core or basic position in a readily tradable item, including such things as precious metal (PM) bullion or coins, stocks, mutual funds, exchange traded funds (ETFs), etc.  Whatever it is you are trading will here be called the "item".

A Core Position Account comprises a quantity of the item AND a cash reserve position.  The cash reserve position enables purchases adding to the quantity of the item from time to time.  Proceeds of the sales of some of the item, from time to time, are added to the cash reserve position.  The cash reserve position enables purchases adding to the quantity of the item from time to time...

Core Position Trading™  (CPT) is defined as buying or selling, adding to or subtracting from, the core position of the item in such a manner as to, over time, increase both the amount of the item AND the cash in the account.

No Guessing, No Plunging

As contrasted with typical trading, Core Position Trading is not an all or nothing method.  You do not try to guess a price at which to buy and then plunge with all your cash, and then try to guess a price at which to sell and then "bail out" (if you have a loss) or "cash in" (if you have a profit).

No Need to Trade Stocks That Are Risky

Since you maintain a greater or lesser core position at all times in the item, it is important that the item you choose to trade will likely maintain some sort of value over an indefinite period of time.  Well managed, established companies as opposed to "dot.coms" should be considered if you are considering individual stocks.  Exchange-traded funds (ETFs) are becoming very popular, and are superbly suited to Core Position Trading trading.  While ETFs may decline dramatically in value, they are much less likely to lose 90+% of their value or go to ZERO as many individual "tech" stocks have done.  Actual physical commodities, especially the precious metals (PMs) are excellent in the sense of always maintaining some value, but transaction costs (spreads and/or commissions) can be high.  CPT proxies for the PMs can be either individual PM stocks (which individually can be quite risky), PM stock funds (where the risk is distributed), or PM exchange traded funds (ETFs).

Buy Low, Sell High

The object of trading is to "Buy Low, Sell High", but most people don't!  Robert Lichello's AIM method is a Core Position Trading method that is designed to "force" you to "Buy Low, Sell High".  IF you follow his method, you will be able to "Buy Low, Sell High" on a consistent basis.

Let the Market Tell You What to Do

Why try to predict the market?  Why not let the market tell you what to do?  (See AIM Basics.)

Glossary of Stock and Options Trading Terms

Core Position Trading
  AIM Stock Buy & Sell Calculator

Technical Analysis
  Risk/Reward Calculator User Doc

Stocks and ETFs
  Stop, Limit, Stop Limit Orders

Stock Options
  Options - The Very Basics
  Options Premium Intrinsic & Time Value

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