I learned a VERY important lesson

Discussion in 'Trading' started by cashmoney69, Oct 20, 2006.

  1. piezoe

    piezoe

    Cash, You've got a lot of good advice here, for the most part, go with it and good luck. Let us know how your doing.
     
    #51     Oct 20, 2006
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  2. infolode

    infolode

    Yes, it is VERY necessary.:p
     
    #52     Oct 20, 2006
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  3. cashmoney69

    cashmoney69

    Instead of starting another thread, i'm going to add to this one, but its not about gaps.

    lesson 1. Dont buy on round numbers, they are probably important resistance levels for other traders.

    lesson 2. Dont forget to read the news!!. I bought two tech stocks today: SYNA and RHAT. The tech sector was the hardest hit today because of the GDP report, which again, I knew nothing about. shit.

    lesson 3. Dont take momentum for granted. Many stocks will fizzle just as quickly as they rise.

    lesson 4. If you dont day trade..wait. Wait until about 11-12pm, after lunch is a reversal period...buy at the lows instead of sitting through a pullback the rest of the day.

    lesson 5. If a stock trades 650k shares average, and there's no pre-market volume.....there must be a reason why. Dont be a sucker.

    lesson 6. Dont keep changing your orders. If you feel the market is pushing you around emotionaly...walk away. (I'm going to have a problem with this one).

    cm69
     
    #53     Oct 27, 2006
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  4. HolyGrail

    HolyGrail

    I would say you need to set up procedures before you purchase any stock. Once you find the stock that appeals to you technically you must.

    1. read the company news
    2. find out their next earnings reporting date
    3. find out what they do to make money and if their financial position is improving or getting worse.

    Never trade without knowing those three pieces of information if you are a swing or position trader. You still need to know the first two no matter what type of trader you are.
     
    #54     Oct 27, 2006
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  5. spreadn00b

    spreadn00b

    The gambling/trading is certainly a fine line. I believe the difference is risk management.

    Here's my logic on the backspread instead. You're speculating on a move in either direction because historically earnings move a stock quickly in one direction or another. With this strategy you're going to profit on a big move in either direction. If the stock doesn't move, you can close your spread without a massive loss.

    I'm not saying that this is a perfect strategy, but seems to offer a higher level of risk management.

     
    #55     Oct 27, 2006
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