Some more of my thoughts on bounce trading.
Please remember this is how I trade and am not recommended anyone do it.
1. Make sure you have the best brokerage firm for bounce trading. I use Mytrade (able to use your funds over and over again in one day)
2. Invest no more than 10% of your funds in one stock.( If your trading with $10,000,,,than no more than $1,000 in one stock)
3.Look for stocks that have large volume and are moving down 35 to 40%,,,,I usually start buying around 35% in small quantities,,, when the executions start taking longer to fill,,,most likely the stock is close to the bottom and I increase the amount of shares.
4.Don't get greedy,,,,alot of the stocks that have been walked down do not go back to the original price ( I usually start selling shares at 25% increase from bottom on an average)
Example: Stock is at 1.00 before the walkdown begins,,,,when it gets to .68 to .65 cents start buying 250 shares hopefully ending up with 1,000 by the time it hits bottom maybe around .60 cents,,,then when it moves back up to .80 to .85 sell the shares or at least half. The gain would be around $120.00 dollars after commissions. If you can do this 3 times a day,,,,income would be $360.00 a day or $90,000 a year.
Susie
p.s. Would appreciate anyone elses thoughts on bounce trading. |
