more old thread goodies!
There has been a lot of questions regarding when I sell if I buy a stock and it starts to downtick. It really varies from stock to stock.. There are a lot of variables that come into play, I can't say that I will sell as soon as it drops 3/8 or more. If I think its just the market makers shaking the weak hands out ill hold, or if i think the stock is just taking a rest Ill hold. There are so many factors that come into play before I buy a stock but I generally believe that if I buy a stock and it starts to downtick then my analysis was wrong and I get out but thats not always the case. For example, last week I bought a stock GMGC. The second time I bought it, it immediately downticked almost 3/4 of a point. I didnt worry cause I felt that it would have late day run and it was just being hit by some profit takers especially since Joe Kernan on CNBC just spoke about it and caused the stock to run up. I was right and I was able to sell out with a 3/8 point profit. But there are some cases where I buy a stock like ZCAD that looked like it broke its downtrend line and was about to close above its 50 day MA, but ended up not being able to hold. Stocks like this I will sell at a loss as soon as I feel its meeting too much resistance. (I sold ZCAD for a 1/4 loss) You all must understand, i'm a daytrader, I scalp as much or as little I can get. I dont care what the company does or how much money they make or how much they lost last quarter, I only look for trading opportunites for TODAY. I also change my trading styles often. A few months ago, 90% of my trades were breakout plays, now less than 10% are breakouts plays. To become a successful daytrader one must adapt. I remember a month or so ago, almost every gap play would be a winner, now I never hold a stock overnight because i'm scared of the dreadful gap down. I hope you all understand this cause its getting late and im very tired but if you dont, let me know and ill try to explain in more detail. In closing, I just want to say that there is no right or wrong way to trade a stock. What works for me, may not work for you. A lot of my trades are based on gut feeling from watching the the trades go by and looking at the intraday/historical charts, sometimes i'm wrong and sometimes i'm right, but the times that i'm right pays for itself many times over.
By the way, Ray Snow, you are right, I did quote Elder in my previous message. I have read his book so many times I can almost recite the entire book from memory. If any of you are considering buying a book on daytrading, "Trading For A Living" by Dr. Alexander Elder is by far, the best book out there on the subject.
Happy Trading |
