Okay guys, this thread is regarding the Stock Trading thread that I started a few days ago, and due to alot of interest,. Here is the original thread in case you missed it. http://www.gofuckyourself.com/showth...3&page=1&pp=50
I have a 210% gain in the last 2 months in the market. Here is a shot of 1 of my recent trades, an 11% gain in 3 days(most people make 11% in 1 year)
I've been utilizing this strategy for 4 months now. The first 2 months I was honing the technique and still figuring it out and I ended up with a total gain of 81% in 2 months. It should have been more, but I violated my 2% rule and ended up taking a 20% Loss on a volitile pharmeceutical stock. Lesson learned the hard way I guess. The last 2 months I have had a 210% gain in the market.
MY DISCLAIMER. IMPORTANT: No one here should just jump in and follow my picks right away, you should do some research of your own and then you can decide for yourself if it will work out for you. Always keep in mind that the higher the reward, the higher the risk. My trading style is very high risk.
DO NOT go and reach into your kids college fund or your rainy day/emergency money to start trading in the market. If you decide that you do want to invest, use only the money you can afford to lose. I really hope everyone listens to this, because you can lose all of your money. Always think about the worst case scenario, because it can happen.
What I do is primarly swing trading...I would not consider myself a day trader since a true day trader usually holds unto a stock for minutes and NEVER holds a stock overnight, while I hold unto a stock anywhere from 3 hours to 7 days.
As promised, I have explained below my basic trading style and trading system, and everyday I will be posting the stocks that I plan on buying.
I will post my DAILY stock picks in this thread every single day so you guys can bookmark this single thread and won't lose any of the picks. I will post them in big orange letters, so if the thread gets too big, which I am sure it will since we will post here everyday, you guys can just sift through all the posts and find the picks easily, and see what the entry points is, where you should sell it, etc.
Usualy at about 10-10:30 AM Eastern is when I enter a trade, so you guys can just keep your eye on this thread at around that time.
We can also all discuss those stocks or any other stocks that you guys come across of all in this single thread so anyone who is interested can see it, instead of me getting bombarded on icq and having to explain myself over and over.
The main thing I do with my system is find stocks that are already in a rallying phase or are showing signs of starting a rally, get in for a good gain and hold and then take profit and go to another stock....
What I mean by rallying phase is this...there are 3 types of stocks really...stocks in downtrend, stocks in flagging pattern (meaning they are not going up or down) and stocks that are going up(rallying phase)...
Before I use to bottomfish, I would find stocks that were down alot and beaten down, buy them at a cheap price, and wait for them to go up...thats what many people do. Unfortunatly, that is anot a very effective strategy.
Alot of times I found that when you buy stocks that are cheap and have been in a downtrend, they continue on that downtrend and get cheaper and cheaper... There is really no way to pick a bottom, as you are often catching a falling knife.
so why even try? its a risky thing to try and pick a bottom. Many investors think they can find a bottom or somehow find a gem for a good price, but you will get yourself in alot of trouble doing that.
so now my strategy is to concentrate on finding the stocks that are already in the uptrend, I get in fast, and then I let the chart tell me when the uptrend ends...the chart tells you everything...you just have to look for it and after a while, with experience, you will get good at it.
The main key is I NEVER buy a stock in a downtrend...a stock has to be above the 50 day Moving average before I even look at it. Never buy a stock below the 50 day MA, this is the key to my strategy.
It's all about minimizing your risk through technical analysis and then getting in and out, let those winners run and cut the losers loose right away. And most importantly, don't listen to CNBC or your broker for stock advice.
Now the way I trade, I have to keep an eye on the market every single day, so it's not for everyone, so keep this in mind! If you are starting out, I would recommend using either Etrade or Ameritrade. They are both very fast with their trade executions, and the commision is about $10 per trade.
You have to realize that as a trader, your biggest expense is commision, it is imperative that you keep that cost down as much as possible,
Now, let me make it clear once again, this strategy is NOT low risk. But with the method I am using now, I am minimizing my risk to 2% of my capital per trade, so the most I will lose is 2% of my money PER TRADE as long as I follow my plan, which is setting a stop .
This is why you have to watch the market daily, and for some people, that is impossible to do, so if you fall into that catagory, this is NOT for you. And we will set the stops in manually, so it will automatically sell the stock once it goes down 2% from our entry point. This is because if you do not set the stop manually, when it comes to selling, many people will actually divert from the rule thinking "well, it will probably come back up, and this is when a simple trade could turn into a complete disaster.
Now the upside potential diffrers from stock to stock, unlike the downside potential which is set at 2%, for the upside, we will let the chart tell us when to exit. The 2% rule for the downside is set at 2% because if you do not cut your losses at 2%, you are risking losing your entire capital, and for a trader, your capital is your blood, so it is absolutly imperative that you do not put your entire capital at risk on any trade.
I usually make on average about 5 complete trades per day. Out of those 5 trades, I have a "winning percentage" of 80%. What this means is 4 of those trades I will make money on after selling it, and 1 of those stocks will be a losing trade from the moment I buy the stock (I will get stopped out at 2%).
If you have a 80% winning percentage in the market, you can make good money, BUT believe me, you can still lose everything if you do not keep your losses to a maximum of 2% per trade! What many people do is make something like 40% in 1 week, and then lose 50% on a single trade!
If you do the math, it's easy to see how fast you will lose your entire capital. That is why I talk so much about the 2% rule because your entire investment could be wiped out in 1 single trade, and believe me, that can happen very easily in this market.
But if you can pick a winning trade 8 out of 10 times, or even 6 out of 10 times, and you keep EVERY SINGLE ONE of your losses to 2% (no excuses, if you don't follow the 2% rule, you will lose money), you will make good money in the market.
As far as your starting capital to start trading, I would recomend that you start out with at least $10,000, although you can start out with as little as $5000 and still be able to grow that, but the more starting capital, the more leverage you have.
- - - Now here are the main rules that I live by which will give you an idea of how I trade - - -
>>1. Absolutly NO bottomfishing. To buy a stock simply because you think it is cheap is the easiest way to lose your ass in the market.
>>2. Trade only stocks above the 50 day MA (with a few exceptions)
>>3. Trade Gap ups. (not immediatly though)
>>4. 2% stop loss on all trades, unless in the rarity that a chart suggest the stop loss can be more liberal.
>>5. I Hold a stock anywhere from 3 hours to 6 days. I let the chart tell me when to exit and when to enter.
>>6. I don't give one hoot about a stock's fundementals. If you are in a stock long enough to understand it's fundementals, you have been in that stock too long. I let the chart and the market tell me what to do, not what some wallstreet analyst thinks the company is about or what their profits will be in 2006. I don't care.
>>7. I have CNBC at the home and the office, but I do not watch it.
>>8. My final and most important rule: Buy only stocks that are in uptrend, and short stocks that are in downtrend. I would rather be shot than buy a stock in a downtrend.
>>9. I don't pay much attention to valuation, if you are a short term trader, which I believe to be the most profitable way to trade, then valuations do not have any relevance.
>>10. I do look at the short interest in some of the stocks. If the short interest (meaning the % of people who are short on a stock) is above 12%, thats a great sign if the stock is in an uptrend, because those shorts will start covering, therefore pushing the stock price up even more.
>>11. Most everything I do is based on the charting. The chart is like a book, you just got to learn how to read it.
I have a 210% gain in the last 2 months in the market. Here is a shot of 1 of my recent trades, an 11% gain in 3 days(most people make 11% in 1 year)
I've been utilizing this strategy for 4 months now. The first 2 months I was honing the technique and still figuring it out and I ended up with a total gain of 81% in 2 months. It should have been more, but I violated my 2% rule and ended up taking a 20% Loss on a volitile pharmeceutical stock. Lesson learned the hard way I guess. The last 2 months I have had a 210% gain in the market.
MY DISCLAIMER. IMPORTANT: No one here should just jump in and follow my picks right away, you should do some research of your own and then you can decide for yourself if it will work out for you. Always keep in mind that the higher the reward, the higher the risk. My trading style is very high risk.
DO NOT go and reach into your kids college fund or your rainy day/emergency money to start trading in the market. If you decide that you do want to invest, use only the money you can afford to lose. I really hope everyone listens to this, because you can lose all of your money. Always think about the worst case scenario, because it can happen.
What I do is primarly swing trading...I would not consider myself a day trader since a true day trader usually holds unto a stock for minutes and NEVER holds a stock overnight, while I hold unto a stock anywhere from 3 hours to 7 days.
As promised, I have explained below my basic trading style and trading system, and everyday I will be posting the stocks that I plan on buying.
I will post my DAILY stock picks in this thread every single day so you guys can bookmark this single thread and won't lose any of the picks. I will post them in big orange letters, so if the thread gets too big, which I am sure it will since we will post here everyday, you guys can just sift through all the posts and find the picks easily, and see what the entry points is, where you should sell it, etc.
Usualy at about 10-10:30 AM Eastern is when I enter a trade, so you guys can just keep your eye on this thread at around that time.
We can also all discuss those stocks or any other stocks that you guys come across of all in this single thread so anyone who is interested can see it, instead of me getting bombarded on icq and having to explain myself over and over.
The main thing I do with my system is find stocks that are already in a rallying phase or are showing signs of starting a rally, get in for a good gain and hold and then take profit and go to another stock....
What I mean by rallying phase is this...there are 3 types of stocks really...stocks in downtrend, stocks in flagging pattern (meaning they are not going up or down) and stocks that are going up(rallying phase)...
Before I use to bottomfish, I would find stocks that were down alot and beaten down, buy them at a cheap price, and wait for them to go up...thats what many people do. Unfortunatly, that is anot a very effective strategy.
Alot of times I found that when you buy stocks that are cheap and have been in a downtrend, they continue on that downtrend and get cheaper and cheaper... There is really no way to pick a bottom, as you are often catching a falling knife.
so why even try? its a risky thing to try and pick a bottom. Many investors think they can find a bottom or somehow find a gem for a good price, but you will get yourself in alot of trouble doing that.
so now my strategy is to concentrate on finding the stocks that are already in the uptrend, I get in fast, and then I let the chart tell me when the uptrend ends...the chart tells you everything...you just have to look for it and after a while, with experience, you will get good at it.
The main key is I NEVER buy a stock in a downtrend...a stock has to be above the 50 day Moving average before I even look at it. Never buy a stock below the 50 day MA, this is the key to my strategy.
It's all about minimizing your risk through technical analysis and then getting in and out, let those winners run and cut the losers loose right away. And most importantly, don't listen to CNBC or your broker for stock advice.
Now the way I trade, I have to keep an eye on the market every single day, so it's not for everyone, so keep this in mind! If you are starting out, I would recommend using either Etrade or Ameritrade. They are both very fast with their trade executions, and the commision is about $10 per trade.
You have to realize that as a trader, your biggest expense is commision, it is imperative that you keep that cost down as much as possible,
Now, let me make it clear once again, this strategy is NOT low risk. But with the method I am using now, I am minimizing my risk to 2% of my capital per trade, so the most I will lose is 2% of my money PER TRADE as long as I follow my plan, which is setting a stop .
This is why you have to watch the market daily, and for some people, that is impossible to do, so if you fall into that catagory, this is NOT for you. And we will set the stops in manually, so it will automatically sell the stock once it goes down 2% from our entry point. This is because if you do not set the stop manually, when it comes to selling, many people will actually divert from the rule thinking "well, it will probably come back up, and this is when a simple trade could turn into a complete disaster.
Now the upside potential diffrers from stock to stock, unlike the downside potential which is set at 2%, for the upside, we will let the chart tell us when to exit. The 2% rule for the downside is set at 2% because if you do not cut your losses at 2%, you are risking losing your entire capital, and for a trader, your capital is your blood, so it is absolutly imperative that you do not put your entire capital at risk on any trade.
I usually make on average about 5 complete trades per day. Out of those 5 trades, I have a "winning percentage" of 80%. What this means is 4 of those trades I will make money on after selling it, and 1 of those stocks will be a losing trade from the moment I buy the stock (I will get stopped out at 2%).
If you have a 80% winning percentage in the market, you can make good money, BUT believe me, you can still lose everything if you do not keep your losses to a maximum of 2% per trade! What many people do is make something like 40% in 1 week, and then lose 50% on a single trade!
If you do the math, it's easy to see how fast you will lose your entire capital. That is why I talk so much about the 2% rule because your entire investment could be wiped out in 1 single trade, and believe me, that can happen very easily in this market.
But if you can pick a winning trade 8 out of 10 times, or even 6 out of 10 times, and you keep EVERY SINGLE ONE of your losses to 2% (no excuses, if you don't follow the 2% rule, you will lose money), you will make good money in the market.
As far as your starting capital to start trading, I would recomend that you start out with at least $10,000, although you can start out with as little as $5000 and still be able to grow that, but the more starting capital, the more leverage you have.
- - - Now here are the main rules that I live by which will give you an idea of how I trade - - -
>>1. Absolutly NO bottomfishing. To buy a stock simply because you think it is cheap is the easiest way to lose your ass in the market.
>>2. Trade only stocks above the 50 day MA (with a few exceptions)
>>3. Trade Gap ups. (not immediatly though)
>>4. 2% stop loss on all trades, unless in the rarity that a chart suggest the stop loss can be more liberal.
>>5. I Hold a stock anywhere from 3 hours to 6 days. I let the chart tell me when to exit and when to enter.
>>6. I don't give one hoot about a stock's fundementals. If you are in a stock long enough to understand it's fundementals, you have been in that stock too long. I let the chart and the market tell me what to do, not what some wallstreet analyst thinks the company is about or what their profits will be in 2006. I don't care.
>>7. I have CNBC at the home and the office, but I do not watch it.
>>8. My final and most important rule: Buy only stocks that are in uptrend, and short stocks that are in downtrend. I would rather be shot than buy a stock in a downtrend.
>>9. I don't pay much attention to valuation, if you are a short term trader, which I believe to be the most profitable way to trade, then valuations do not have any relevance.
>>10. I do look at the short interest in some of the stocks. If the short interest (meaning the % of people who are short on a stock) is above 12%, thats a great sign if the stock is in an uptrend, because those shorts will start covering, therefore pushing the stock price up even more.
>>11. Most everything I do is based on the charting. The chart is like a book, you just got to learn how to read it.
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