Indeed, Charlie. I too quit my position in corporate America like Mike to trade full time. I'm not going to sit here and say it's been an easy rode, because it hasn't. However, I'm holding my own so far, and hope that my experience will pay off.
We are, with out a doubt, in the toughest market one could ever imagine. There are so many headfakes on a daily basis, it's hard to keep track. With the likes of INCA flashing 10's of thousands of shares on the ask/bid to scare you in one direction or the other, to MM's that show 100 shares on the ask while they dump a 10k order on you. In addition, the brokerage firms beating down an entire sector(semi) for their own gain. While investors sell out, due to listening to what the analyst have to say, they feel their inventories at cheaper prices and then upgrade the entire sector thereafter. Ask your self how many sell recommendations have you seen in your trading career.
I have to commend CNBC for calling Hendry Blodgett's hand when he downgraded the entire internet sector after the stocks had pretty much found a bottom(retail investors finally gave up and sold for losses). Not real good timing on his behalf. Ironically, look at the coverage the internets were getting today!
The point is, it's not a game of hitting fastballs straight down the middle. There are many would be major league baseball players who can do this. The ones that are in the major leagues, though can not only hit the fastballs, but also the change ups and the curves. Playing the market is alot like playing Major League baseball. It's a game of singles and not homeruns. In addition, it's a lot of guess work too. However, it's guess work with a game plan behind it. Message 14216479
Ever notice after a baseball game, when reporters interview players like Sammy Sosa, they always ask...."tell me about the hit in the 7th inning." The player replies..."I was looking for the change up, ect., and the pitch was there, so I hit it." Also, when do you think players have the best chance of being successful? When the pitcher is behind in the count, right? Pitchers are most vulnerable when their behind 2-0. Players always look for a fastball down the middle. If they get it, chances are they will make good contact. Therefore, look for stocks with a 2-0 count. One's that are either oversold or overbought, ect..
Now, simply transfer the above to your trading. No one has all the answers. It's a culmination of many. The KEY is...you must have a game plan on a daily basis. Charlie points this out with his entry/exit points. I spent many months winging it, by getting up early reading the news and playing the stocks that might move based on early morning news. Folks, this doesn't cut it. You must have a game plan.
I have a print out that I use each and every day. I have 5 categories. Pullbacks, reversals, IPO's & 52wk breakouts, earnings, and CNBC pumps. I research at night and find stocks that are overbought, oversold, new IPO's that may move, Earnings plays, and last but not least, CNBC pumps(Joe Kernan's kiss of death; mentioning a short term(1 week)move in a stock). I place all these stocks on a list and will play the ones I feel will give me the most bang for my buck. I play them daily and will keep them as position trades if they, and the market cooperates.
My success has definitely improved. In addition to using a game plan, you must use discipline. Easier said than done(speaking from my own experience). There are times you think your stock will move because you see a lot of buying or selling. But, the stock is not moving in your direction or at all. Well my friends, that should tell you something. There's nothing wrong with getting out and seeing the stock run 5 points after you do so. It's better than it running 5 points against you, right? That's just part of the game. Hey, I was the bonehead that sold ASYS last night, after going long in the stock @ 10 in A/H. The stock didn't move for 20 min and a few sells began trickling in. The bid dropped and I bailed. The rest is history. I missed out on a $7000 gain if I would have held. We all have stories like this, but the point behind is to limit your losses and let your winners run. It's that simple. Use discipline to your advantage and stay on track.
The last 2 days, have not been kind to me, because of my timing. For some reason, I'm either shorting to soon, or buying to late. The reason? I'm not using discipline. It's time for me to sharpen the knife again and focus on letting stocks come to me as opposed to chasing. Sometimes the best trade is no trade at all. Those are important words to live by. I sleep much better at night, now that I have a gameplan. You win some and lose some. You will definitely win more than you lose if you have a game plan.
With that being said, I hope we all can share in our successes and failures here. We have a very small community on SI now, and I'm very proud that I'm apart of it. I cannot wait to get up in the morning and turn the computer on to see you guys on here. Every day is a new day, with new challenges. When people ask me what I do for a living, I tell them..."I trade securities for a living." Nearly 95% of them say, "that's risky"! My reply is, sure it is, but so is every thing else in life. Sure, we all probably have more risk than the average professional, but I wouldn't have it any other way. I absolutely love what I do, and I wouldn't want to do anything else. I hope I will always be able to leave the market on my own terms. If the market get's the best of me, then so be it. At least I took the risk to full fill my dream of trading professionally for my career. As for now, I'm having the time of my life. Good luck to all, and thanks Charlie, for bringing up the issue.
KM |
