Honestly, the more I analyze the market, the less I understand. I keep reverting to basic assumptions—anything deeper seems useless. It doesn’t feel that hard to make money in the market. The more I try to probe, the less sense it makes. In the end, it's all about direction and risk management: Are there buyers so you can sell? If not, cut losses quickly. If there are, hold and sell higher. I’ve been thinking about some crazy models to reduce gap risk, but it all comes down to the law of large numbers. I think I’ll focus more on the environmental factors, excluding direction. This probably aligns with the wisdom others have shared with me. That said, I no longer feel the same thrill I did before, which is actually a good thing—I’ve realized a big part of me wanted to chase large gains. I dislike making pennies on my capital, but it’s better to have small, consistent gains with a real edge than to deal with large swings and the risk of ruin. What I need is small, steady gains, which means increasing the number of trades, N, as much as possible. If my beliefs are sound and my trades align with them, that should work. As N grows, capital per trade naturally decreases, making individual losses insignificant. A couple of dollars lost per trade doesn’t hurt, but risking a high percentage of capital does. Losing 10% or 50% is painful—I’m sure most people reading this know that feeling. So, I’ll shift my focus to studying the environment more. Buying low and selling high seems trivial to me for some reason. Still, I feel a bit sad today—maybe my assumptions are flawed. I won’t know until I trade. Anyway, that’s what’s been on my mind recently. I’ll probably start implementing a half-baked plan with very low size but high volume—just like a high-volume business model, like Walmart and others. Godspeed to myself once again.
As one enters the rabbit hole, that's what happens, when the analysis is faulty. The analysis is faulty if looking at the wrong things, the priorities topsy turvy. Why not as an exercise, begin with one stock, your favorite stock and tell us what you see. Maybe I can tell you what you don't see, but you'll be doing the work, I'm not spoon feeding.
Bound to happen as I am just entering the arena. Got to get smacked a few times you know . I'll take you up on your exercise, but today I am going to rest a bit. So I will pick that one stock later .
Yup, it has to be real money to feel real pain, that's where the learning comes in. Sim money and sim pain doesn't work.
Let us focus on the stock HIMS . I honestly do not have a favorite stock, although the SP500 is my favorite index. Why did I choose this stock? Hmm not sure, I had it on the list of things when I filtered manually after my code did the filtering(I still do a bit). Now to focus on the things I notice. All time highs, constant buyers and sellers to be exact. Looking at the weekly chart: Probably good to buy at the lows instead of break outs. I am thinking stocks that do well breaking out have a lot of float rotation in this case the stock does not though. Higher highs, and higher lows indicates that there is consistent buyers(not in a range). Being able to move higher before retracing means that stock is not being sold off in a stronger manner. Potentially the types of players in this stock are not holding a lot of size due to this. This is a stock I would trade in, maybe not breakout chasing worthy though. Would need to see how strong the selling is next week. Aside from float rotation, not too sure. Fundamentally I got not clue since I really haven't focused on that, but I do have the data since I am paying for an API.' Edit1: In a sense I do put worth into the past historical prices, but the farther out the less I trust it. It is more about the recent positions of players. I can't predict the type though. Unless they somehow show themselves in price in itself. Although if the stock has been in decline for its whole life there are a whole host of problems like people rushing to sell at any new demand. That is why I choose to trade stocks near all time highs. Edit2: The float rotation maybe a factor @deaddog has indicated towards, as he seems to have thought I may trade stocks that have high volume, but I have ignored volume for quite some time until now. I have noted this as well.
It's nearly 2:30 am here so will only post a short one as I need to sleep.... Is this a stock you would buy this Monday with real money?
Honestly that's a good question. I really depends on how Monday is. If it is a crazy selloff probably not, but I am mostly going to be buying end of day unless I make a bot that can trade for me intraday but I think that is outside my scope for now. But yes if it allows me to I would make a bet on this stock to continue higher. I am leaning more on there being a bit of selling tomorrow so maybe I could put an order to buy if it reaches a certain price. The risk would be low as well hmm. I am splitting my long trades into two, chasers and buying low. In this case I would lean more buying low for this stock, but my data is not as developed yet.
I'm not familiar with US stocks as I trade the ASX, but anyhow there are many similarities in approach. It looks like you have picked a good hot stock in the healthcare sector. I like it, it looks like a market darling, but be careful as many eyeballs are on it. According to Tradingview HIMS has a P/E Ratio of 78 and it is reporting in March 3rd its 4th Qtr results, that's 1 month away. According to the news recently 2 directors have been selling. January was a strong month in the healthcare sector, it including HIMS kinda popped the last week or so. I'd be cautious, it's trading nearby the top of the channel and price looks to be artificially pumped on the last day of the month. I reckon Feb will be a volatile month, let's see. 1 minute chart for 31st January