New Trading Technique

Discussion in 'Strategy Development' started by eagle488, Oct 3, 2006.

  1. This is not a NEW trading technique, but its going to be my new technique and routine from now on.

    Its simply too dangerous trading EVERYDAY for myself. I will usually push myself to find one stock for the day. Sometimes I might make a little cash and then there are some days where I will lose a lot more cash. In the end, it seems as if I am making money one day, but then losing it the next. I think this is quite common and not only confined to myself.

    So I have come to the conclusion that trading everyday is bad. hehe. Funny huh? Well hear me out. There are certain common sensical trades that come along every so often during the year. I have found the best strategy to swing trade on these clear cut examples.

    Here are a few examples for those that missed out:

    - Mastercard- Ohhhhh. You should have been there the day it IPOed. I sent a market order and picked up 2000 shares at 40 bucks and some change.

    - SCUR- A bunch of different scandals hammered the stock down over the summer to 5 dollars. It was obvious that it was hammered too far. It soon rallied up to 7 dollars in a short period of time.

    - CNCT- It too got hit by various scandals and sank to 7 dollars, but then rallied to 11 dollars soon after in a months time.

    - MRVL- It got hammered last night to 15.50 and rallied today to 16.8. ANother obvious trade.

    From now on, I am just going to sit on the sidelines in cash and wait for the most obvious trades. These opportunities seem to present themselves many times over the course of the year.

    The suddenly beaten down stocks seem like the best opportunities *sometimes*. Im not saying that all of these beaten down gems are clear buys, but there are some good ones that will rebound within a few days to a month depending on certain factors.

    I have found it useful to purchase a few of the brokerage reports on yahoo from the analysts that are covering the actual stock. Ok, dont throw garbage at me for purchasing the reports. These reports usually contain lots of information and little things that you may not see from the information that is publicly available.

    Im also going to eliminate margin from my trading diet.

    Tommorrow begins a new day and new strategy.
     
  2. Excellent strategy.......this is how i trade es and ym......just sit and wait for those really low risk momentum trades.......saves time.......saves money on commisions and does wonders to your profit factor.
    i'm refering to rockets.
     
  3. Sounds like a great way to trade. Wish I would have hung onto my Google stock when I purchased 50 shares at IPO. Made my $10 and knew that it would go higher, but didn't have the guts to hold on to it and ride it out.

    So just excellent suggestion to simply try and pick those that have been beaten below what they are worth.
     
  4. I am glad to hear there is someone who admits to owning Google and then dumping it. The yahoo message boards seem full of guys who held Hansens from $1 all the way up, etc. etc. If one wants a demonstration on the dishonesty of mankind, they just need to access the Yahoo message board and read a few good posts. On a side note, I thought it was great that companies and the SEC were pressing litigation against a few of those guys.

    I frankly believe that there are not that many people that will hold onto a stock that doubles or triples. I believe most will get out by the time the stock doubles. We all still have the fresh lessons learned from the year 2000 in our heads. Its not bad to take a profit when you can. . .
     
  5. ozzie123

    ozzie123

    Indeed, wait and see is also my trading strategy for now. Waiting on the sideline for an obvious trade.

    I think I spotted this idea from a Market Wizard book. It's Eckhardt if I'm not mistaken