Im new to trading. Not to investing Bought UPST, CRWD (chased this one not sure that i should have) and AFRM charts looked to me like breakouts. I like these three long term, i understand the importance of having an exit strategy, but honestly I'm a little lost. Example: AFRM, looks to me like strong term support is around 107. But thats a long way down from here. (bought at 150). Like i said, like these long term, but WTF do i know, at what point should i cut bait and say i was wrong. Chasing CRWD and even the two, I'm tempted to write calls here, but everry time i do that i end up sorry Any words of wisdom? Feel free to beat the shit out of me, i probably deserve it. Former Financial Advisor (retired) , Didnt trade for clients, mostly asset allocation with Index and sector ETFs, some stocks but not MOMO stocks
I looked at AFRM. Like you say, there is support at 107... lesser support at 130. You have to choose how much you're willing to give the stock BOD (Benefit Of The Doubt). Whichever, it's a guess on this play, but you're thinking along the right path. (Me too.. former RIA and money manager. I'm "smart as a whip", an expert in Price TA, and experienced up the wazoo... what to do about stops is still just a strategic, logical guess!)
Thanks for the response. I sold my practice and retired 2 years ago, this keeps me engaged. Hardest part of this is figuring out what i want to be (investor or trader) and what my edge is when i trade
Well, lemme help you. You don't have an "edge". Nobody does (not a legal one, anyway). Suggest learning "Price TA"... of which you obviously already know some. KISS baby, as always.
It's tough to go from investor to trader. Different mindset. It's really easy to turn a trade into an investment when it goes against you. I would suggest a written trading plan and then measure your success not by the dollars made or lost but by whether you followed your plan. Small losses won't take you out of the game. Letting small losses turn into big losses ties up your capital. As for where to put your stops, that should be determined before you enter the trade.
Some random general input that I wrote while bored waiting for food to cook and before paying attention to that you are actually trading options, so your mileage may vary: - You will see more success the longer holding periods you are able to have (as limited by your strategy). Some sort of swingtrading is viable. People that wants to change their stocks daily without very strong plans and execution will just lose money, transaction overhead as well as really stiff competition/lack of (usually imagined) alpha. - In equities especially you really have the luxury of and should make the habit of picking the strongest bets (find the currently hottest sectors) and throwing away the rest. For discretionary trading one's best trade ideas make all the money. Similarly, unless you have a really specific countertrend strategy you should stick with the trend; easier said than done if you have an inner contrarian in your head. - Be very careful of leverage as it tends to break otherwise functioning trading. If you're retired you should have a mountain of money anyway - the less leverage you use the easier and more healthy your trading time will be. - Probably you know about it but make sure you master on executing sound trades w.r.t. to RR & win rate (expectancy) calculations, since this is the heart of trading. A great trade idea is only useful if you can help yourself from cashing in too early on it, especially if you took 100% downside risk in an equity. - If the market is still in a bull phase you can mix in a 1x S&P 500 or Nasdaq long w/ help of leverage and eliminate index underperformance assuming your main strategy makes money. - 99% you read online is generally unhelpful, yeah I realize the irony of writing this in a forum.
Yeah, I'm working on that. Read a great TA book by Brian Shannon, and reading one of the Mark Minervi books. And most important making a habit of looking at charts every day . I should say i'm an investor AND a trader. Index iETFs and some of the large cap dividend payers, are investments. I trade stuff like PLTR. But stocks like UPST are stocks i like for more than a trade but i dont think they're the kind of stocks i want to get married to.
I get what you are saying. I always try, when i'm doing a TRADE, to have an exit strategy, and I'm willing to take small losses. My problem is, as i mentioned in my reply to Scap, is that UPST, CRWD, AFRM are stocks i like "long term" but that doesn't mean i want to hold them for 5 years. They aren't trades, but they aren't set it and forget it either. So thats where i am struggling with what a proper exit strategy should be. Thanks for your response, i appreciate the feedback
A lot of what you are saying rings true. Aside from the fact that i dont trade options other than the occasional covered calls or naked puts (i sold the Oct 275 calls on CRWD which i bought at 272 today, i will probably be sorry, but they expire tomorrow and the stock has really run the last two days so whatever, worst case scenario, i make a few hundred bucks in 24 hours. I hate leverage and wont use it. Besides which i am doing my trades in my IRA so i cant margin, only leveraged ETFs, but i wont buy those. And yeah, i do have an inner contrarian in my head, you pegged me right. I never bought momentum in the past, just starting to get semi comfortable with it. Your insights are helpful and appreciated