What is your trading philosophy?

A member asks; what is your trading philosophy?  

Here is Stephen Cooper's response:

I believe that the first step after deciding that you want to be financially independent is to divide your current assets into long and short term categories. 

A full 80-90% of your money should be in the long term group! 

For most people this will be mutual funds. Next is to set up a plan to regularly and consistently add to this area. I look for 20%+ out of long term investments. 

After that has been accomplished, the 10-20% that remains can be considered. Here I look for the big returns. 

I prefer to position trade options on stocks. Much of the site is designed to support option traders with trading ideas and ongoing education. 

To be successful one must have a way to find great stocks, know what option to buy, when to buy it and when to sell. 

Finally a clear system of money and risk management must be in place.

How often do you trade?

The average position is open 2-6 weeks. I prefer to make a few very good trades rather than a lot of O.K. trades. This not only cuts down on commissions but requires far less time than frequent day or swing trading.