Good questions, Judy!
I have seen many day trader types approach this like they would their position trades. I do not think they use a tight stop loss. The stock just falls on them, continues to fall, and they say as though nothing happened: TOMARROW I will look at this stock and if it is STILL falling I will sell it. Like this is logical! This type of person IMO needs some help. This type of trader has confused position trading with day trading and will lose out in the end when that "bounce" does not happen leaving them several points shy of their initial amount. Permitting the stock to fall an amount on a positon trade would be much different than the tighter stop requirements of day trades.
Day trading I am seeing requires a very different approach and even frame of mind to work for a trader. Most do not want to put the time into it to understand this and develop their skill set in this new area. They think day trading is very similar to short term position trading. After all, trading is just like investing except on a shorter time frame, and day trading happens in a still shorter time frame. That is all! Right? So instead of your Stochs being generated on intervals of days, it will be created from intervals of minutes. That is all! Right? No problem!
It is interesting to see as the market has gone DOWN there have been more evidence of unbridled speculation than at any other time in the market. One strong evidence of this is how many people here at SI have become overnight day traders during this period of the market. I thought many that I know of had more discapline and better perspective on the markets than this. But many if not most here at SI are more of a gambler than traders who take unnecissary risks and enjoy the excitement and thrill of standing in front of both the trend and that of a falling stock, a trade they likely have never made before except until now, and afterwards describe the experience like one would describe a bungee jump. This has been quite educational for me! I can see in time there will be allot of "dead bodies" laying around here at SI. What makes this curious to me is that the players are not able to even consider such a defeat as a possibility for themselves. This is a good sign that something is "off" here.
Day trading is a different game that needs to be played differently from short term position trades. This is unfamiliar terratory to most position traders. For instance, now you are operating at the level of intraday price fluctuations, a world apart from what you see on the daily charts. I really saw this coming: first short term trading by the daily charts, then trading using intraday data and even determining entries and exits based on intraday data, now day trading. Do we see a pattern here??
Enjoy yourselves! For many here this entertainment will come at an unnecissary but costly price.
Now who knows how to read the tape of a stock well? If you do not, you have no business day trading. and you will find this out soon enough. Furthermore, there are very few mechanical intraday systems that work. From what I can see, all the successful day traders use judgement as an important part of their trading, which means knowing how to read the tape. Learning how to read the tape well in different markets with different stocks in different markets takes years of experience to be able to rely on it 100%.
No offense intended. If my post here helps at least one person rethink their course in the markets, then I will consider my efforts here a success.
Bob Graham |
