I would like to hear from experienced traders on whether they prefer to follow the news or hot stocks for the day or do they have a core base of stocks that they trade every day. I tend to follow a core base of stocks and have been successful but I'm having a difficult time deciding whether to just stay with this strategy or broaden my horizons. I realize that they are as many strategies as traders but I would like to hear about these two. I understand that each of us has to determine what strategy works for us and to continue using it until it no longer works. I would like to hear from traders who have tried both strategies and what types of success have they had. Did you try one strategy and determine it wasn't for you? Do you use both strategies? Do you think one strategy offers a better risk/reward return? Thanks in advance
Like the saying goes, "If it ain't broke don't fix it." One of the things that can trip a trader up is getting his/her head spun by all the different trading methods and styles, and trying to follow all of them. If the way you currently trade is producing consistent profits, and you are satisfied with the type of returns you are making, I say stick with it. Like you I also follow a core group of stocks that I've come to know very well. As some of them become less volatile or lose their "tradeability" for me, I sometimes drop them and add other stocks to my list. I will sometimes trade a stock or more often a basket of stocks via HOLDRS and index options if there is news or events driving a sector, such as energy and oil stocks recently. However, very rarely do I actually ever trade a single issue based upon a news item on that particular stock, since news often has a funny way of making a stock move in the opposite way you thought it would.
I normally just play the stocks that are most down on the day. As a result, Im often trading a different set of stocks every day. I also trade about a half dozen nyse names every day just about and when im active in them I can do over 30k shares in a day in that one stock. (mo,f,dis,t,and a few others are myt faves).I have just become VERY good at reading the specialists and have gotten good at taking quarters on a few k shares from the above, especially dis of late, though im having some trouble in f lately. I guess that if you are making money then there is no reason to find new stocks to trade. Get really good at something first before you decide to branch out and be so/so in a few strategies or stocks.
News plays can be pretty tough in this market. A couple years ago in the midst of "the bubble" trading news was very fun and profitble, especially in after-hours, but nowadays I find that determining how stocks react to the news can be very difficult. Like zboy said, don't change a good thing. Once you find that your current style no longer works, then branch out.
js1257, Here you go... http://www.amex.com/structuredeq/sp_holdrs.stm If you want to check out sector index options, also check these out: http://www.phlx.com/products/sectors.html http://www.amex.com/asp/option_info.asp
You may also try this: http://www.thestreet.com/_yahoo/funds/deardagen/894384.html The article is about a year old, but it is a good place to start.