tito and all,
Re - "Jim S, keep tabs of the higher highs and higher lows in succeeding days in an up-trend; lower highs and lower lows in the down-trend. Soon you will have a better guess of when to sell and when to buy."
I have a little experience with this and you may benefit from my slight success and larger non-success.
I was doing this in a stock recently, and making very good money for 7 weeks. Thought I found the golden goose for awhile. I even knew the drawbacks but couldn't stop it was so fun and profitable.
Basically the stock was in a trading range and stayed there for the 7 weeks. I would buy low and sell high, then wait for the next low. I made many round trips this way. Probably 20 trades or more in 7 weeks. (discount brokerage makes this possible these days)
Unfortunately, when I would sell, that of course would limit, or end the upside potential. (with AMAT being low, you may not wish to limit your upside potential)
Then I would buy back in several dollars lower than I sold. Now I was fully exposed. Market could go up or down. Well it worked 20 times or so, then the fundamentals changed and it took a good drop. My upside was limited but not the downside. That destroyed the earlier gains. (not the happy memories however)
With AMAT being low, there is less downside risk, buy in reverse, this could limit the upside potential.
Perhaps if you add the purchase of a call option or leap in addition to the trading, you could still keep the upside we all want. In my case I should have bought a put, but was too cheap and didn't think it would go down very far....I was wrong. (should have paid my insurance like a good boy)
I don't clame to know it all, but hope to learn from my mistakes. Wanted to share this one with you so others don't learn the hard way.
Good luck,
Lee
Tito, since you are a leaps guy, I thought you would be trading leaps or short term options, not the actual stock, caught me by suprise. |
