Hi Keith. Good article. I have been doing this for sometime and find the accepted norm for daytrading to be highly questionable! I notice in his article this statement;
In addition, I had been 'paper trading' several momentum systems, and they were consistently profitable while trading 40-100 trades per day for several months. Therefore, I took a big step and went part-time from my job.
I just can't accept this type of trading as being "sane". The only people you make money for is the brokerages. This type of in/out trading for chump change results in the interviews with daytraders you see on TV. A woman was interviewd who wnet into DJ Direct and daytraded everyday, she made about 50-60 trades a day and walked away happy wit $750.00...this was one of her good days.
I submit that if she had looked for quality rather than quantity she probably would have done much better. Daytrading schools encourage daytraders to turnover 30-60 trades a day. IMO, not because thats the way to do it, but thats the way they earn money.
I find 9-10 trades an absolute max for me. Normally it is 4-6! These people seem to thrive on a 1/16th as if it was big money...I find it is a waste of time and energy. You guys have the right idea, with plays like Loewen, Eatons, Phillips, Nuinsco, Dion. These stocks move, and can give you great returns on a single trade.
By the way, I also advocate, quitting while you are ahead!! In my earlier trading days if I made a huge trade early in the day, I tended to lose for the rest of the day. So now, if I hit the big one, I take the rest of the day off!!
Everyone to their own!!
the Chief |
