I am interested in trying a position trading system that is part objective and part subjective (chick goslin's method of using regular SMAs to predict price "flow") There is a problem though when it comes to screening stocks: -I could screen stocks by industry and only long/short stocks from the strongest or weakest sectors. -I could select 5-10 stocks as my "universe" and try to get to know them intimately. The first system is more objective because it pulls stocks from the best sectors, but each trade may be with a new stock. The 2nd system is more feel based. I can still check to see how strong or weak the stock sector is but most of the time it will probably be a noisy signal since I don't pick stocks out of the best sectors. On the other hand I will always trade a stock I've traded before. What do you guys think? I think I'm more inclined to go the more objective route especially as a new trader. However if it's a better idea to try to pick up patterns by trading the same stocks then maybe I'll do that (I doubt whether I will do more harm than good with that approach though)
<p> I do not know anything about the system to which you refererred. I do know something about trading the same stocks day after day. I track ten stocks. In a given month I rarely trade more than five of them. I trade the same stocks day after day. They "behave" in certain ways. In up days they behave one way on down days they behave in other ways. I have a strategy for them on the open and the close. During the day, I basically will either look to find their daily high and short it, or I will try to find their daily low and long it. But the intuitive part is to know when to trade the stock and when to trade the market. What I mean is, somedays the market forces are so strong that the overrides what your tracking data might have indicated what was in store for the day. For example, if you think it is going to be a three digit Dow down day, you probably know which stock is the best choice to end on its low. Some stocks tend to hit the low way before the close and bounce off of it. I trade only listed stocks. Out of the ten I track only two are not from the Dow thirty. IMHO the best stocks to trade are the ones which have a consistent daily range and are not too volatile, although I have never used beta as a screening tool.
I used to trade these feelings I'd get deep in the pit of my stomach... Almost always turned out to be nothing but gas. Expensive gas.