I forget the term for what you're doing. It's between day trading(less than 1 day holds) and intermediate term trading(2-5 days). I was using similar strategyies as you. I won about 14 times and lost maybe 3 times, just like you. I was doing what is commonly referred to as swing trading (1-2 week holds). It's funny that the strategy you're using is something you are not aware of. You know what you're doing, to a very limited extent, but you really don't know what you're getting involved in. You can explain it all you want, but you must realize you're not the first to attempt what you're attempting and most previous to you have failed.
I realize that I'm not an expert in the subject, and that even if I win for several months in a row I still am not an expert by any means, just that my guesses have been educated enough that I ended up winning a majority of the time. But, most of the information you need to make educated guesses is freely available (or at a very low cost) online or elsewhere. Income statements, balance sheets, and cash flow statements are archived online, and the past 4 quarters are readily available on many main stream financial sites. Most main stream financial sites provide standarized historical trends and corresponding data with their own analysis and the ability for you to make an individual analysis. There are many trading strategy sites that not only provide basic tutorials for the beginner but more advanced ideas and forums to discuss trading topics and strategies (one that readily comes to mind is Fool.com). Information like this has been present in many other fields and people become quite good in those fields just by reading and soaking up that information (ie programming, networking, and other computer related skills - I know people, and I have been to some extent, who were self taught through online documentation).
I was doing what is commonly referred to as swing trading (1-2 week holds).
I have a set of rules I use to determine my actions in various situation, I don't do what you are talking about here - I hold 2 days max. Swing trading as you have described it (1-2 week holds) can kill anyone quickly, no matter their expertise. In a volatile market like this your stocks can easily swing +/- 15% in a week. On a day by day basis your stocks will typically swing +/- 2% or 3% max. The only exception was with my HP-Compaq position, where I broke my rule and held on. I shouldn't have done that, it was a mistake, if I would have let go of the stock I would have been out maybe $10 to $20. Instead, I hung on because the stock was currently undervalued (although not by a large amount) and it tanked lower. I let my emotions get to me that time (even though I was able to easily let go on a couple other stocks earlier that lost me $20 to $30 each)
$2000? Is this a Roth-IRA?
Nope, just some spare change that I've dumped into in Ameritrade.com account. I currently am using two accounts, each started with $2000, the first one messed up on the HP-Compaq trade, so I opened up the second one so that I could still do some trading while I waited for HP-Compaq to come back.
You pay fees for every trade you place don't you? I do. If not, please tell me your broker so I can transfer my account immediately. Brokers are not interested in making you money, they are interested in placing trades for you so they can collect their fee.
Actually I do get my trades for free. The only fees I pay are the SEC fees (junk change on large enough sales) and a wire fee ($15) whenever I open a new account. Ameritrade allows you an unlimited number of accounts and 25 free trades on every new account. At my current rate I use 25 trades in about 2 months. I called up the Ameritrade customer service and explicitly asked them if they cared if someone were to keep closing and opening accounts to continually get 25 free trades - they said no, because enough customers simple want to hold long term positions, only modifying them once in a while, and won't go through the hassle of opening new accounts. That the people who are willing to continually open new accounts are also the ones who pay for the extra streaming services, charging up a good amount of monthly fees. As long as they don't change their policy, I won't mind spending 5 to 10 minutes filling out an application in order to save 25 * $8 - $15 = $185 (or with the upcoming new rates 25 * $10.99 - $15 = $259.75).
"but I slept in through the morning and missed my chance to make 2 to 3 percent. I kept sitting on it because I was then breaking even but wanted to at least cover my trading costs. It tanked in the following weeks and I was out about $200 bucks, but it then turned into a long term investment since the stock was now undervalued and following steady trends up over the next few weeks. "
I have to ask you a question pertaining to one of the golden rules of the strategy you are using:
Where was your stop?
Yes, I broke my rules on that trade, and I payed dearly. If I hadn't broke my rules, I would've only lost $10 to $20 and moved on. My rules are to drop losers at a certain percentage, giving them that much space to turn around. Also, I drop winners at a certain percantage because I have already achieved what I wanted. The only reason I made $200 on Delta was because as soon as it opened, it was already at $8.30. The drop to $8.28 where I sold it was the time it took me to open up my Ameritrade account and click sell.
"...and so many people involved in it?"
Ignorance is mostly the reason. If you realized by these posts, and what I have heard, is that most people that were day trading two years ago, are no longer doing so and state tehy never will again. "A rising tides lifts all boats"
From personal experience, I know I can't teach you why, you have to truely learn the lesson through exprerience like I and many others here have. Like previously stated:
"I wish you the best in your strategy, I just hope you get burned early."
I heed their warnings but would like to know how they messed up. Was it a break in their rules? Did they just get sick of the hassle? Were they merely matching long term returns? If these were partial reasons, fine. If I broke enough rules that it hurt me, I would quit. If I get tired of what little hassle I deal with, I'll quit. If you can't beat long term returns effectively, then you should quit. The point of these strategies are to beat long term returns. I'm not saying nothing will ever creep up on my and this strategy, but that I would jump ship when it does creep up on me and minimize my losses. Perhaps these people didn't jump ship fast enough?
-
). If you do buy stocks right in the middle of one of their fiscal quarters, your chances of movement (up or down) are much more unpredictable unless there is other good or bad news.
Facebook
Twitter