Even as a buy and hold investor, you are still trading. The best place to be is the weekly and monthly charts. The stock market is a giant auction. Think in terms of supply and demand instead of how valuable the fundamentals say the company is. I want to go to an auction where they are selling 3000 Corvettes. Mercedes, ect. and only 3 or 4 buyers show up. I want to stay away from auctions where they have 3 or 4 cars and 3000 buyers are throwing their money at them. Figure that out and you can win big over and over. Enron taught us those who create fundamental reports are not always honest, but the data on charts is verfifiable each day. If you have a $100k account.....A 7% stop on 200 shares of a stock that sells at $30 isn't too much risk, but it is a huge amount of risk if your account is only $6k. Keep losses low through proper postion size, and by waiting for low risk high reward trades. Other wise you are food. If all else fails, ask your professers. they all know plenty of ways to screw up your mind, they might as well help you lose your money too.
Sometimes good stocks just don't go up. It's the reality. The only good stock is the stock which is rising, nothing more, nothing less (It can be falling if I'm shorting). Do you raise your stop-loss? You will see there's no sub-forum named "Fundamental Analysis", while there's a whole sub-forum called "Technically Speaking". Most traders don't care much about any fundamental details or analysis. They only need 2 pieces of information to trade - price and volume. It is what they care most. It may sounds strange to you, but that's what we are doing. By the way, buy-and-hold (long-term investment) is not the only option for people who have not much time. Position or mid-term trading are the alternatives. Some just do a little analysis every day or some days in a week, or just a week. They may do the analysis only after market close (since they don't have time when the market opens)
Well, the only reason I'm doing B&H now is because that's the only method I've been exposed to. I am famliar w/ CAN SLIM as well and try to use that method as it applies. But I haven't really come across a book that teaches short term or position trading. Any suggestions?? I don't even know what position trading is As I become more familiar with the market, I will shift to shorter trade sessions. Eventually I'm hoping to trade short term while holding some long positions. But I just started 3 months ago with <$5000. So I'm just taking my time to learn now.
What do you mean by that? Can you explain? personally I find anything that goes overnight much more risky than whatever daytrade, 'cause I'm there and I can do something. Ursa..
Remember, no matter what anyone says, buying stocks in small lots is not investing, no matter what your time frame. It is 'trading', or at best 'trading with a dividend'. ie Buying 1000 shares of AAPL makes no impact on Apple as a company. It provides no cash to Apple to grow with. It only provides cash to the person who sold you his stake. Perhaps in an idealistic stretch you could call buying into an IPO an investment. If you're buying 10mil shares like Buffet, that is investing, because likely you're also buying a spot on the board of directors and guiding your investment. If you want to genuinely 'invest', start a business or buy into a partnership.
Try Toni Turner's book: "The Beginner's Guide To Short Term Trading." One of the best I ever read! I wish I had it when I got going. Also her book for Day Traders if that is your avenue. Dr. Alexander Elder's book: "Trading For A Living" is very good as is all of William J. O'Neil's books, especially: "The Successful Investor." Steve Nison's book: "Japanese Candlestick Charting Techniques" did a world of good for me. Switching to candlesticks really got me going big time. I missed so many reversal points by relying on "bar" or even "open bar" charts. If you don't have it pay the $100 and take it to bed with you. I read the cover off of these and a few others. -1bigsteve (o: