Thanks I just had a similar discussion. I have been doing extensive research (using my husband as a real guinea pig also) buy and hold theory in the past 2 months does not work. We have been pushed into daytrading because the market has volatility that can enable you to make 5+ on a single trade..and if you are inexperienced you will hold and watch the same stock that was up 3 will be down 4 the next day. It is not the daytrader in the last 6 weeks losing money its the "I think JNPR/VERT/NITE reached a bottom and I'm in for a position trade' that are losing." Daytrading 'sucks' not the kind we do but the kind they do in the brokerages where they scalp for 1/8 1/4 or even as high as 1/2 point. I know I could have held PHCM, or even HLIT for a week and maybe I would have made more, but PHCM was down 10 at one point and HLIT was down 7. I choose volatile stocks but I also choose the less volatile that I know are not 'hits' with the thread.. Like ARX, PLCE, ALO, ZOMX.. and there is always one or two like ANF or TAN that cater to that group.
DIVERSITY is the key and not being a daytrader or position trader. If you only stick to the nets and wait for a the 2 week hold you'll still be out of luck and money. I 'sucked' some money out YHOO, EXDS, AOL, JWEB, PHCM, and a host of others, I left on the table and because of the volatility I had to exit positions before getting crushed like FOSL. Yet it was possible to make nice money in FOSL again as it was in PSUN, in TAGS, IBI and a couple of rarer stocks. What is wrong about buying ARBA or JNPR in the morning and selling for 5-7 point profit? Who would hold them overnight? Some would, I wouldn't.. I know we held NDB when we had that 3 day surge but the market was in the "FOMC" pre-rally mode. I say we still trade like CHAMELEONS and go with the trend.. If you stick to your old buy and hold for position trade style, you will lose..THAT IS THE SITUATION THESE LAST FEW WEEKS. If if changes in a week or so, we'll know it, but when a stock is up 20 points like PHCM, or 10 like ARBA, BRCD, JNPR and a few others and it did not IPO today, or JNPR to ignore it because you are in principle not a daytrader is ridiculous. I think we should be proud that we can pull the trigger and commit to a trade early enough so others can get on board. End the day in cash or with a small 'commitment' for the next day works for me and a lot of you and works in these frenzied markets.. I'm willing to lose 5k to make 20k..
I think the losers are the ones that buy after the runup or the ones that don't follow watch lists (can be any list as long as they have done some homework), and the ones that can't cut away from the stock. I could not read all the posts today because I was really tied up in my trading and trying to post right after. I had my share of losers today but I got out quickly, I stayed with the winners.
What I do at night is set out bout 25 stocks..10 from the new watch list (which is filtered from about 100) another 10 from the last two (the ones with the best charts) and about 5 earnings plays. I study them and the next day I try to find the best of the bunch. The bad ones I won't call, or care about.
But if you follow your charts intraday you won't get into a tanker, I waited 3 points for ARBA and then 4 1/2 points, because I wasn't so sure. I got into PHCM after only a couple because I have more experience. EXDS has a good chart INHO but that could work against it because it has already broken resistance and could (and did) correct a day or so.. VRSN was actually better in that sense.
. I do hold stocks, I find the second best time frame for us is about 5 to six days and about 10 percent for about a month. A very few like BEAM, FRNT, FWRD, AUDC, RIMM,ITN, CAMP, I hold from 1 to 9 months. SGY, the PAX, CDRD, MU, INTC for just a few The others tumble, whether its a BGEN or a LLY or CREE or whatever. There was a time about 5 months ago I held intermediate: CREE, HLIT, ETEK, GALT, ENTU. And in January we held up to 4 weeks, but times change, the market changes and if our trading styles aren't flexible we either stay out of the market until things pick up lose money.
I 'paper shorted' about 4 stocks yesterday that did really well and really shorted about 4 also. I am getting more confident but if I didn't try, I'd never learn.. My first short ironically was AOL. You are an A) 'individual investor' B) a short term trader, C) a position trader, D) a swing trader.
Its the market that dictates which A,B,C, or D you will be. And unfortunately you have to take a chance on the volatility if you want the bigger bucks. It's not like VEGAS, because you do your homework.. its skill, more like Chess. You make your move and then the market makes its move, and over again.. hopefully you win. |
