In yesterday’s issue of Traders Daily Direction, I showed you how I’ve been trading the move in Tesla, Inc. (TSLA) stock.This is one of the more volatile stocks out there, so I decided to scale into a position with two separate entries.

In the Sept. 1 issue of Traders Daily Direction, I told you I was taking a small position in Tesla, Inc. (TSLA) stock.At the time, TSLA was just starting to break out of an “ascending triangle” consolidation pattern.

Stocks don’t go straight up.After a significant move higher, the surge takes a breath.Profit-taking causes small pullbacks, which allow the stock to briefly consolidate.

I don’t believe in diversification.I rarely hold more than five or six stocks at a time.In fact, I prefer to hold no more than four – allocating 25% of my portfolio to each name.