Hey, I'm new to trading. I've been paper trading and I'll be setting up an account with an online broker in the next couple of weeks. At the risk of sounding like a complete newbie to this, my general strategy is to make 2-3 trades per day, early in the trading day... although I will be swing trading, so I don't mind holding a position if I need to. I plan on waiting until good news is released about a stock and it begins to climb. Jump in right away, and put in a stop order to sell as soon as it goes up another few cents, enough to make a couple bucks in the process after commision. As simplistic as this strategy is, can anyone point me in the right direction or give me some general feedback/advice?
(1) Will your losing day-trades become swing-trades? (2) Instead of looking for follow-thru with "news reports", expect reversals instead if you're making scalpy trades. (3) You'd want to use a limit-order above your buy-price if you buy a stock and want to sell-out quickly if it goes a few cents your way, not a sell-stop. (4) I get the idea that you don't have a well-defined "system". Develop something that isn't dependant on news as an "input".
It may come to suprise you, when that stock that gets the good news, suddendly drops like a rock. I hope that you will have a closer sell stop order underneath it as the one that you have above it. You may say that if it drops like a rock then I just wont buy it. Well, hopefully that will be true. But if you did get in just as quick as you could. There is a chance that you are already in it. When placing stops, place the stop loss first. Best regards and all the best too you in your trading.