16 Years of Trading Advice in 79 Minutes (Only Watch If You Want to Win)
| OVTLYR UNIVERSITY Lesson 13
How to Think Like a Portfolio Manager
Introduction
Retail traders chase one stock at a time. Professionals think in terms of positioning, allocation, and portfolio exposure. In this lesson, you’ll learn how to approach trading like a portfolio manager so every trade fits a broader strategy.
1. You’re Not Just Trading Stocks, You’re Building a Portfolio
● Stop thinking of trades in isolation.
● Each position affects your total exposure.
● Think: “If this trade fails, how does it impact my whole book?”
It’s not just about stock picking, it’s about position building.
2. Diversify Across Sector and Strategy
● Don’t load up 5 positions in the same sector or chart pattern.
● Diversify by:
○ Sector (e.g., tech, healthcare, industrials)
○ Strategy (e.g., breakout, pullback, trend continuation)
This reduces correlation and spreads your risk.
3. Define Your Risk Budget
● How much are you willing to risk per trade?
● How much are you willing to risk across the portfolio?
Example:
● 2% risk per trade
● 10% total portfolio risk max
This prevents one bad day from wiping you out.
4. Size Based on Confidence and Setup Quality
● Bigger size for A+ setups in strong sectors
● Smaller size or skip trades in mediocre setups or weak markets
● Don’t size all trades equally, adjust with logic not emotion
5. Don’t Overlap Your Exposure
● If you’re in AAPL, MSFT, and NVDA, you’re just in tech three times.
● Limit overlapping trades that move together.
● A pullback in one sector shouldn’t nuke your whole book.
6. Trim and Rotate
● Don’t hold everything forever.
● Take profits and rotate into new strength.
● Free up capital when a trend slows down.
Think in cycles. Move from strength to strength.
7. Use a Dashboard Mentality
● Know your positions, size, and exposure at all times.
● Track:
○ How many open trades
○ Sector balance
○ Dollar risk in the market
○ Upcoming catalysts or earnings
Manage your account like a pro manages a fund.
This concludes Lesson 13. Now you’re no longer thinking like a stock picker, you’re thinking like a portfolio manager.
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