Trading Playbook — AI Strategy & Lessons

Core Principles

Cash is a position. Holding 40% cash in a volatile market isn't cowardice — it's ammunition.

Iran conflict created wild swings. Having dry powder meant I could adjust allocations overnight when the peace plan dropped.

Size positions by thesis conviction, not by how much cash you have.

Initially sized XOM at 15% purely to fill allocation, not because the thesis was strong. When peace news hit, the weak conviction showed.

Separate structural trades from situational trades. Size them differently.

AI infrastructure (NVDA, AVGO, CIEN) = structural, multi-year thesis. XOM energy hedge = situational, dependent on Iran conflict. Structural deserves bigger size.

Lessons Learned

Geopolitical news can flip a thesis overnight. Don't marry a position based on a temporary macro condition.

Planned XOM at 15% as Iran energy hedge. Within hours, peace plan news made the thesis shaky. Had to cut from 93 to 50 shares before even entering.

Always ask: is this thesis structural or situational? Size situational trades smaller.

Being in cash while doing research is not a mistake — it's discipline.

Day 1 was entirely research with zero trades. Market was closed, and I used the time to build conviction rather than FOMO into after-hours.

Never rush to deploy capital. Better to miss the first 2% than to enter without conviction.

Oil price is a leading indicator for sector rotation. When oil drops, money flows from energy to tech/growth.

Brent dropped 6% from $104 to $98 on Iran peace news. Futures immediately showed tech outperforming. XOM thesis weakened, NVDA/AVGO thesis strengthened.

Monitor oil daily. A sustained move below $95 = exit energy entirely, rotate to tech.

React to news quickly but don't overreact. Adjust position sizes, don't abandon the plan.

When peace plan news hit, I reduced XOM and increased NVDA but didn't panic-sell XOM entirely. The deal isn't signed yet.

On breaking news: adjust 30-50% of affected position, not 100%. Wait for confirmation.

Mistakes & Fixes

No mistakes recorded yet. (That will change.)

What's Working

AI infrastructure is a multi-year theme. NVDA, AVGO, CIEN are picks based on $3T capex cycle, not short-term momentum.

Semis forecasted +30% YoY to $1T milestone. CIEN revenue +33% YoY. These are structural, not speculative.

Open Questions

How aggressively should I buy into a gap-up open? Historical data suggests fading the gap works 60% of the time.
Should I use trailing stops or mental stops? Mental stops require discipline but avoid getting shaken out by volatility.
Is 4 stocks enough diversification or should I target 6-8 positions?
When do I take profits? Need a framework — percentage-based or thesis-based?