I am new to trading and would appreciate any advice you can give me. I am still learning the trading lingo and what the numbers stand for but ultimately, I would like to keep things as simple as possible. From my research, several companies I do buisness with have stock prices that fluctuate $5 to $10 throughout the year, but on a year to year basis they are consistently around the same price. Is it possible to make consistent profits by just sticking with companies you know and waiting for their share prices to drop below the norm and then hold onto them till they return back to normal level so you can sell them? Maybe I am over-simplifying this but it looks like a person could achieve a good ROI by doing this and have a lot of fun in the process. Any info you could offer me would be a great help. Thanks.
Money can be made but you'd be better off identifying uptrending stocks instead of "stagnant" stocks whose behavior is likely to change by the time you do your first trade with real money.
NurseJJ- You have come new into a market when what you describe happens quite often. The round trip phenomena or the common price phenomena it isn't so much channel investing as you see on tv... just buy here and sell here- but more so the holding time for stocks has been reduced by the type of electronic investor both big and small that is out there and what you can do is take a favorite stock in your field say HOLX and see where it retraces to -- (used to be $48 and where it tops out-- used to be $68) and then buy accordingly. When it comes close to the bottom range buy and close to the top sell. In this manner you can ride a lot of stocks without having to isolate one in an uptrend. The problem with all buying uptrend stocks is that it creates a very narrow market not unlike what we have today. You are a Nurse so you know lots of good companies... I'll be looking for your posts... we used to have Biobottom here on ET but he is deep nuclear now and no longer posts he likes BDLI Biodeliverey Systems and CBLI and companies like THOR are going to be at conferences soon. I was involved for a while with PURE a small cap play that left me out on an island but with a good idea a cleaning goo for hospitals and prisons that stops MERC Staph infection. Your field I find the most interesting, from a disposable syringe to a new colon cancer screening test (EXAS) the possibilities are always endless and we need more nurses! So male or female get the job done read what the Dr's use and what the hospitals request and follow the $'s you'll do very well just remember don't take a stock pick from a Dr! They are notoriously greedy and bad!!!! ~ stoney
Investing in healthcare equipment supplies, drug companies, or in any related company that supplies materials that involve patient care, is very high risk. These stocks are notoriously volatile, and can drop 30% overnight on news. From experience, it is the one sector I don't touch. In regard to Nurse's post, yes, your assumption that you can make a decent return by buying and selling a few stocks in a trading range is a bit simplistic. It is tougher than it looks, because trading ranges can quickly change to up or downtrends and breakouts. However, your idea of focusing on a few stocks and getting to know them well is a good way to begin. And a very simple way to look at them technically is to buy a pullback when they are trending up, and/or short a rally when they are trending down. And always, always use a stop in case you are wrong. Conserving your money is goal #1. Good luck.
If you want some advice... I'll give you one piece of advice that'll make or break your trading career... it's real simple - Finesse your profits, but learn to manage your losses. Traders who don't manage their losses do not last long. They get frustrated and end up quitting. Making money is not the problem... failing to learn how to manage your losses is the number one reason why most individuals fail and go broke.
Thank you all for the encouragement! It is a big confidence booster. I hope you all have a happy and profitable new year.