Hi All, I've pretty much just started trading regularly. I don't day trade since I have a full time so I swing trade instead. I've been using Oliver Velez's strategy of buying on 3-5 down days for a long position or selling 3-5 up days for a short position. However, this strategy only works a small percentage of the time. I would appreciate if anyone could post other strategies or books/websites that would be helpful for a newb trying to get better. All responses are appreciated.
Trading is a tough game. Each person is different and thus, the strategy that is good for me wouldn't be good for you etc etc... Thus, we need more info to help you out with the right books and the right strategy to make money. 1) What is your full time job? what is your compensation? 2) What's your thoughts on the results of your strategy of buying on 3-5 down days for a long position or selling 3-5 up days for a short position.? 3) When you say, "this strategy only works a small percentage of the time" what exactly do you mean? did it work 6 out of 12 times, 6 out of 26 times, or 6 out of 60 times? and what stocks did you use this strategy on?
Hi Ripley, Thanks for your reply. Here are the answers to your questions: 1. I am a computer programmer and make around 45k per year. 2. I've been trading on/off for around a year now. Before I would just use technical analysis to find buy points - mostly by reversals (ie double-bottoms) However, I wanted to get into trading more and found the strategy mentioned above. I thought that it really made sense and wanted to try it out. For the most part it works fairly well but I wanted to know other strategies if there are better ones. What is a good percentage of winners for any given strategy? Also, I like the fact that I'm only holding positions for 2-5 days. This increases the number of trades I make. Also, I'm paying more attention to risk management which I like. I still feel that the 3-5 day strategy is good but I think it only works in strong trending stocks. 3. I've tried this method for about 1-2 months now. I'd say I made about 12 trades in that amount of time and have made money on about 4 of them. This includes this week which was a good week for me. I made money on COP and RTN. To find stocks I go through the S&P 100 and the Nasdaq 100 to find stocks that meet this criteria. Again, any help would be great. Thanks!
The problem with a 3 - 5 day holding/ shorting period is that often times, 3-5 days is not enough time to get the gains your looking for. If you're looking to make 3 points in a 5 day period.. well thats an average of .60 cents a day!. Doing this puts unrealistic expectations on the market and yourself. I've been trading over a year now, and I still don't have an "A to Z" holding period for this very reason. Right now I hold CAT and have made an average of 1 point a day, but this is very rare for most stocks. helpful websites: http://www.breakpointtrades.net/Education/HomeEd.html http://www.tradejuice.com/ http://daytradingstocks.com/ http://www.leavittbrothers.com/education/technical_analysis/chart_indicators/chaikin_oscillator.cfm http://www.pitstock.com/school/flags.html http://trade10.com/ http://www.thestockbandit.com/Symmetrical-triangle.htm http://www.tradingday.com/c/tatuto/ http://www.streetauthority.com/terms/technicalanalysis/trendlines.asp
Thanks for your response and the list of websites, cashmoney. Well, the majority of your trades are supposed to only last 2-5 days - it can go up to 10. This is because time is money and you want to be making money all of the time. You just want to get in, make a profit, and get out. Kind of like day trading but over a longer time frame. What strategies do you use when trading stocks?
Breakouts mostly.. The CAT trade I was talking about..that was a breakout trade. Trendline bounces, tops & bottoms, and I like trading triangles if I can find'em. Trading the earnings reports can be fun too. Look at ISRG.. up like 12 points after hrs when earnings came out!! . Last year I made like 300.00 in 15 minutes on Cisco's earnings.
Well trading earnings is like gambling. Look at what just happened to google for example. How have you done in the past year trading like that?
It can be gambling if you buy the day before earnings hoping to ride that gap up to the moon. Trading after the earnings are out is much safer, because then the crowd goes in one direction or the other...all you gotta do is jump in before its too late. I bought ERTS at 50.71 as a breakout play...but stupid me didn't check for earnings and it was today! :eek: .. I'll let you know how it goes if you like.
How is ERTS breaking out? It's in a downtrend and it's been making higher highs for the past few days. With the strategy I've been using if it broke today's low I'd enter a short position. However, the after hours trading is good so I bet you'll make money on it.