The thing that saddens me is that I could have taken the 40K just bought the stock, left it alone, and in 4-5 months turned it into 160K. Instead I worked in and out of it "day trading and swing trading" and only managed to capture 1/4 of the increase in value.
This is very interesting topic. I often think about it, but can not come to that certain conclusion. Here is my main concern:
yes, we all see stocks that make us regret that we didn't hold it longer. But at the same time, there are plenty of those that would have killed us if we did. I daytraded BEAM starting from the day 1 of its run. If I remember correct it went from $4 - 5 to 7-8 that day. Of course if I just hold that original buy I would make a killing. However, when I ask myself if there was any way to distinguish BEAM from legion of 2-day spikers, I can't see it's possible. Fundamental analysis? I saw plenty of people doing them and saying that BEAM has no business to trade above $5... so it's just opinions, some of them right, some not...
Hard to argue that swing/position trading has potential for higher profit vs daytrading. At the same time, daytrading with its tight stops is safer... Probably those whose capital allows it, could do very well combining different approaches (which probably assumes very flexible mind).
My todays take on this (it may very well change in a while): there are great short-term traders and long-term traders, and they make money. There are bad (or just inexperienced yet)short-term and long-term traders, and they lose... It's probably matter of personal preferences, temper and other circumstances that make one decide what he goes with. Although one thing is not to be questioned I think: hard to imagine Warren Buffet making his millions daytrading :)
Vadym |
