My justification for daytrading has nothing to do with my opinion on investing in big cap tech. I am invested in bonds right now. I am also closely watching the U.S. Dollar and I may get some government bonds in some selected foreign currencies if it begins to show weakness in the coming months. We will see who has investment credibility over the next two years. I have been a buy and holder in the past. As I made some great returns in the market over the past 7 years I started to get nervous about the amount of money I had in tech. I started to read more and real investigate what I owned. I had been working as a consultant in the computer industry for years and invested in the products I believed in. Software, hardware and consulting firms. There came I time just before Y2K that I decided I wanted to try my luck at trading in between contracts. I thought that the would be great movements the markets leading into and out of the Y2K non-event. I got myself hooked up with a direct conection to the NASDAQ via, ISLAND, Instinet, SOES, SelectNet. NYSE access too. I quickly learned that daytrading has nothing to do with investing. Intra-day. P/E's and other fundamentals don't mean a thing to day traders. It doesn't matter where you think a stock is going over a month or a year. As a pure daytrader I only care about the next 5 to 10 minutes and I most often hold positions for 2 minutes only. I scalp. The SOX.X, Nasdaq Futures, S&P Futures go up. I buy strong stocks that have what appears to be low risk level 2. I play stocks with 10-20 point ranges on the day. I just try to get a few points here and there. I few hundred shares here and there. It adds up if you are quick. You take little losses and try to let the winners run. The point I am making is that daytrading is a job for me now. I made it. I learned to play the Market Maker game. Short the gaps and let them fade. Buy the dips when the futures make a higher high. Short weak stocks just before I think the futures are going to make lower lows...it they don't cover. etc. etc. etc.
Now, the reason I only really day trade is because I think overnighting stocks at these price levels is gambling. To me it's a different game. You could be buying INTC on a dip say last week...it had pulled back a fair bit. Analysts had down graded it and then just come out and upgraded it. So, I'm sure, many bought in on the upgrades and thought they would hold for a few days and see what they could get out. Then pow. bye bye 21%. and thats INTC. NOK did the same. How about buying the dip on NT...you could get smacked at any time. But, CSCO on the other hand. at $70 how much could it gap up on good news and hurt you? When I got to the thread I said I thought it was a safer, better short at $70 then a buy. Stocks like CSCO with 7+ billion shares outstanding aren't going to gap up 21%. But, if there is a little bad news....pow! $45-50 bucks at least....you watch. It will come.
Bambs |
