Be the master of your domain

Discussion in 'Professional Trading' started by cashmoney69, Feb 27, 2006.

  1. I'm fairly new to trading and I want to ask this important question:

    Do you think its wise to trade only ONE stock for a year or two, and learn everything about it...trends, most active market maker, the ax, and other important factors while losing opportunities in other stocks but in the mean time becoming the master of a certain stock JUST LIKE the market makers who obviously make a nice chunk of change a year.

    your thoughts please...

    - nate
  2. I'm pretty new to scalp trading (2 years) but have fooled around with stocks for over 22 years. One method I tried is doing just what you suggest and it worked as long as I used limit orders and tight stops. The trick would be picking just the right stock. You'd have to determine what your situation and risk tolerance is, maybe get with a deep discount broker to keep commissons to a minimum, and be willing to take small bites at a time to get the feel of things. Maybe avoid real newsy stocks or ones that are real volitile untill you had some time in. And learn how to use RSI (2) amd MACD indicators. And learn to short cause they don't all go UP all the time and shorting keeps you trading on a down day.
  3. bitrend


    You got it. Focus is everything. Know what you are doing. I think a lot of successful traders they are very focused. It's like a professional blackjack gambler, he always plays with blackjack, he never jumps with one type of game then another.

    Let me give you real example, I knew very well two stocks, NT and LU, and I never lose a dime when I traded with these two stocks. Unfortunately, I lost everything (all) on NASD stocks which I don't really know about them. You know stock has personality and once you know its personality it's easier to deal with it.

  4. Would my strategy work for nyse as well?

    I've been watching aapl and intc and I feel like when I watch other stocks, I feel more insecure, because I dont have a sense of its prices.

    - nate
  5. Hello,
    Watching AAPL and intc?

    Most of the movements in these stocks just correlate the market..

    Theres no personality in these NASDAQ stocks

    You only trade them using TA

    Only NYSE stocks have habits.
  6. Absolutely not put all your eggs in one basket. The ideal strategy, is to be a multi-market, multi-strategy, multi-time frame trader.
  7. bitrend


    Sure. The best way to start is to trade on NYSE because it's generally (there's always exception) more stable, less volatile which give us time to react. While NASD stocks are generally more volatile therefore it's a bit difficult for less experienced trader to react. With exception, the big companies traded on NASD like the one you mention AAPL, INTC, MSFT, etc. are ok since they are not a flying stock, they won't lose or gain 20% a day. If it does then it must have a very good reason for that.

    I want to add something to make thing clear because I think it's important for you. To know a given security (stock) very well is to know about its price & volume, not about its business; you only need to know a little bit about its business, there's a reason for that. If you know too much about its business you always find a reason to justify your holding despite the stock price continue to decline (or goes against you). That's why the board member of a company fail to trade successfully on his own stock since he knows too much about his company's business but less about its price/volume, meaning he knows less about its personality.

  8. well thats what i ment..price, not business, all i really know is that intel makes chips and seems to be good at it, and thats all i really care to know anyway.
  9. bitrend


    That's all I could say about. The biggest challenge is to know how to deal with ourselves, not with the Market but with our own emotions face to Mr. Market's action. There's some guys in the Market Wizards mentioned that it's not about to worry what the Market is going to do but worry about what are you going to do with the Market behavior. That's go in parallel with the notion that knowing too much about company business. Then we will argue with Mr. Market since we know very well, we're right! Yes we're right, but we're losing money! This is the truth.

    The challenge above I can't help you since I'm still struggling with myself too. Yes I'm still struggling to deal with myself! You can get help from experienced trader like steve46. Send him a PM.

  10. I think it can be both a positive and a negative, where it seems to work against me is when I see something which resembles a trick that the market maker likes to play, if its not a game hes playing with me I get my ass handed to me, on the other hand I work with the same stock day in and dayout, and throw some others in to the mix and I think you definitely do get a feel for the personality of the stock, this especially holds true for NYSE IMO, keep in mind ive only been at this for about 6 months, but im still able to pull a fiar amount of money off of the one stock every single day. The only place you might run in to trouble is when new funds come into the mix, you see different people coming into the mix and trying to work their order and sometimes, it can get a little confusing.
    #10     Mar 2, 2006