Simple strategy, big profit potential?

Discussion in 'Strategy Development' started by cashmoney69, Apr 12, 2006.

  1. I have two simple strategies that I want you guys to comment on.

    1. Buy and sell based on news.

    buy when:
    * A new product or service is going to be released and is highly anticipated. (Windows on the Mac...stock went up 8+ points in two days!).

    * A better ceo takes over the company

    * A company is coming out of bankruptcy

    * Mergers

    * Lower interest rates

    * lower cost of oil


    Sell when:

    * lawsuits
    * Poor CEO's and management
    * faulty products/services
    * When employees strike
    * higher cost of oil
    * higher interest rates


    strategy 2

    trade a stock based on earning reports

    * short when earnings are lower than estimated
    * buy when earnings are = or above estimates.

    - Nate
  2. Translation-----------Do something based upon rumor and then reverse upon the confirmation of the expectation? Most of the time, your "strategy" should be wrong when you buy based upon bullishly-construed news and vice versa with bad news. Oil prices are at record highs and yet the overall market is at ~5-year highs. You would have been crushed being "short" one or the other. Your "strategy" can work on a shorter-term basis but you still have to limit losses and decide which news items are relevant among all of the BS that passes for news today.
  3. i ve been doin' exactly da same for ages'n' never felt da urge or need to change me strategy...if u good at it returns can be above those who don't trade news imo...u only need to look at da vols'n'ranges of those issues affected by news to get a grip on it.
  4. How about selling when your stop loss is hit instead of all those other indicators you mentioned?

  5. that would be mandatory if u wish to survive never mind make money