<<An up market must give them carpal tunnel.>>
I have known many successful traders who use this method of momentum investing. In fact, I have done this myself. The most successful traders I know who use this method, create "Baskets" of stocks within specific industry groups.
Typical baskets would be the INX, GSM, SOX, DRG, etc...
The baskets are pre loaded with the highest priced, most liquid names. The next step is to create a "Dynamically Updating Index Portfolio." This permits the trader to track all of the major index groups in real time. They will seek the best performing index in an up market and chart the index for setups, just like you would a stock. When they feel the time is right, they select the basket named INX, for example and hit one button to purchase 100 to 500 shares of each stock in the index. They then watch their portfolio manager for gains and losses. As the index they purchased continues to go up, they sell the stocks in the portfolio that stay flat or go down. This permits them to only hold the stocks that are increasing in value, thus participating in the groups rally. When they determine the index has peaked on very short term charts, i.e. 1 min, 3 min, they then liquidate the balance of the stocks in the basket portfolio. Buying/Shorting an entire basket can easily be 10 to 30 trades. Unwinding the trade is another 10 to 30 trades. The traders I know who use this methodology typically trade 300 to 500 trades per day. Very profitably, I might add.
N2Growthe
Merrick |
