AD, Thanks for the update. I used to be almost entirely a buy and hold guy, but the volatility in this market sure makes a good argument for being a more active trader. FWIW, one thing that got me into doing a bit of trading was just looking at lots of charts. It occurred to me that the probability of one of these tech stocks retracing just a few points after a good run up tends to be pretty high on average. Maybe someone will work out some mathematics on this some day. I am just going by observation and intuition. Timing is everything, but if one follows this market in detail, I think one can get a good sense for it.
So my latest logic is as follows: Try to stick with quality stocks like AMAT. Don't get greedy, after selling, just go for a few points on the downside and buy back in. Be patient, wait for opportunities when the odds are in your favor, use support and resistance levels as a guide (that Williams %R is probably a good one to also look at). Lastly, if you are wrong, at some point better to buy back in rather than be left behind. You can still make money even if you are wrong on occasion and have to buy back higher. So far I am not shorting, just buying and selling. Still have not ventured into options, but should probably do that (selling covered calls) at some point. If someone has a large capital gain, selling calls might be the better approach, unless it is a non-taxable account of course. That is my latest thoughts on this, for whatever it is worth. Let me know if you have any comments or suggestions.
Regards,
John |
