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Let's Discuss Trading Styles
- Thread starter LelandC
- Start date
Another method I've heard of is people buying a ton of shares (like 2000+, even up to 4000 I've seen) and just selling after a .10 increase- which happens constantly in this decimal market. On 2000 shares, a .10 increase is $200, right there; 5 times a day=$1000 a day; 260 days a year= $260,000. That's sweet. The only problem is you have to have a ton of cash to buy this many shares, but with the new 4 to 1 margin rates coming up it's a lot easier and I'm gonna start this method. I use stochastics bounces and moving averages for my entry and exit points now.
DJC,
I keep an eye on the technicals to determine the trend and support/resistance, but primarily rely on tape reading to enter/exit. That's why I limit the number of stocks that I monitor, as I can only watch a few very carefully. And I am learning more about the behavior of the few stocks that I watch. If I can glean this same familiarity by looking at charts and become more confident in following tech analysis then I will be able to follow many more stocks. At this point I don't have any of this down to a science and hope not to defeat myself. And yes, being familiar with a stock does help me to pull the trigger... albeit not always successfully.
Finn,
Yes, trading large volume does add up fast, but it works both ways. If you are looking to scalp dimes then it doesn't take much of a loss to offset several net gains. You'd have to have more winners than losers and your losers have to be very small, calling for very tight stops. It is not as easy as it looks, be careful.
There are several very successful traders out there using various strategies. We each need to find our own niche, whatever our mentality/personality allows us to do. The posts made by the consistent winners can greatly assist us newbies. We can't let ourselves get blown out while we are learning.
I keep an eye on the technicals to determine the trend and support/resistance, but primarily rely on tape reading to enter/exit. That's why I limit the number of stocks that I monitor, as I can only watch a few very carefully. And I am learning more about the behavior of the few stocks that I watch. If I can glean this same familiarity by looking at charts and become more confident in following tech analysis then I will be able to follow many more stocks. At this point I don't have any of this down to a science and hope not to defeat myself. And yes, being familiar with a stock does help me to pull the trigger... albeit not always successfully.
Finn,
Yes, trading large volume does add up fast, but it works both ways. If you are looking to scalp dimes then it doesn't take much of a loss to offset several net gains. You'd have to have more winners than losers and your losers have to be very small, calling for very tight stops. It is not as easy as it looks, be careful.
There are several very successful traders out there using various strategies. We each need to find our own niche, whatever our mentality/personality allows us to do. The posts made by the consistent winners can greatly assist us newbies. We can't let ourselves get blown out while we are learning.
As far as I know, the most successful system trading on currencies are channel break-outs. Not sure about stocks, but similar systems will probably perform the best due to the small risks of them. And it has a straight forward investor psychology explanation: volatility levels off, investors getting bored, tight channels form... then price break out of channel, bring more and more interest from public to give the price higher lift.
Other technical systems such as moving average crossing, stochastics, RSI, macd etc may only work marginally, if they do at all.. since they all have much bigger maximum drawdowns. and it's hard to give the signals a straight forward psychology relevance. (you see RSI rise from below 30 to above 30, but what does it mean to the investing public? It's too fuzzy. How do you distinguish this from RSI rising from below 29 to above 29? you see, it's too artificial)
Other technical systems such as moving average crossing, stochastics, RSI, macd etc may only work marginally, if they do at all.. since they all have much bigger maximum drawdowns. and it's hard to give the signals a straight forward psychology relevance. (you see RSI rise from below 30 to above 30, but what does it mean to the investing public? It's too fuzzy. How do you distinguish this from RSI rising from below 29 to above 29? you see, it's too artificial)