Page 804 - How to Make Money in Stocks Trilogy

Breaking Boards: Successful Trades and Lessons Learned 83

• KEY POINTS •
• Treat investing like a business.

• Wait for a follow-through day, and then scale in slowly.
• Look at the IBD 50’s top 10 stocks during a correction to
see if any are setting up in base patterns.
• Do homework over the weekend. Set trade triggers Sunday
night through a brokerage account.

Paramjit Chumber
“I was living in England in the 1980s when Margaret Thatcher was the
Prime Minister. At that time, a lot of the utility companies were being
deregulated, and I did well investing with several of those companies as they
began to become profitable. This was exciting and set a lifelong goal for me:
I was going to become really good at investing no matter how long it took.
“In May 1999, I came to the U.S. but was busy getting settled and work-
ing a regular job, so I didn’t become actively engaged in the markets until
2006. With my MBA background, I tried value investing, diversifying with
20 or more different stocks, bought some dividend stocks, and even tried to
imitate some of the traders I saw on TV. I also tried options and swing trad-
ing. No matter which system I dabbled in, I watched my capital diminish.”
“Through all of this, I realized you cannot rely on someone else’s opin-
ions; you must make your own decisions and be in control with a specific
plan.”
Paramjit became an IBD subscriber in July 2008, but this would prove to
be a difficult time in the overall market.
He had a pivotal moment in 2011 when he saw Bill O’Neil speak to an
IBD Meetup Group in Santa Monica, California. Bill mentioned Richard
Wyckoff, a trader from the early 1900s who advocated controlling risks in
any particular trade.
This changed Paramjit’s outlook forever. He saw that trading needed to
be treated like a business. From there, with his MBA background, he set
forth a business plan with a set of rules that would include a monthly review
of how he was doing.
He notes that sell rules are the most important and why it’s critical not to
get tied to a particular stock. “As the IBD saying goes, date the stock, don’t