Loading ...JLS: I’ve been investing/”trading” for 40 years
(quikpik) Feb 22, 00:29 (2002)
And there are no books that can take the place of “on the job” experience. My dad was a stockbroker and I’m well schooled in dealing with bull and bear markets but it has taken me a lifetime to become proficient at deriving my sole source of income from the stock market. It’s all a game anyhow. I just try to “take what the market offers”, knowing it’s a game, in order to make money. There is no high moral ground that needs to be considered when it comes to the stock market.
I’m sure your aware of basic TA rules. When a stock moves, you always want to see heavier than normal daily volume. If the stock is moving down on extremely heavy volume you want to be out. Always check the “size”. How many shares are being bid for and offered. When a stock is moving down you don’t want to see small size on the bid side. You need to wait, not only till the price stabilizes but it needs to be confirmed with heavy bid sizes.
The simplest fundamental is using the long-term trend lines. Whether it’s a stock or index averages. When the Naz was over 5,000, the long-term uptrend line showed that a pullback to 4800 would VIOLATE this uptrend. When the pullback happened I advised all my family to liquidate 1/3 of their positions. At 4500 we would sell out everything. That simple uptrend line got us out of the bubble very near the top. My own analysis at that time( March of 2000) was to move into forgotten preferred stocks of “A” rated REITS yielding 12-15% dividends and closed end Bond income funds also yielding 10-11%.
Even with any stock I might “adore” incl gold stocks, I would sell if that particular trend line was violated (especially on heavy volume) because somebody knows something that will eventually become apparent at some later date.
The money talks – heavy volume, up or down is telling you a story. However, if there is continual heavy volume and the stock price fails to continue to rise, that that would be considered “distribution” and I would liquidate my position.
The thing to remember is that you can always get back into a stock. You don’t need to catch every single point of the move.
Never let a profit turn into a loss.
As my daddy used to say: “You’ll never go broke taking profits.”
Between my regular accounts and my/and wife’s IRA accounts, I make about 2,000 trades per year, 75% of which are profitable. My average holding time is anywhere from 10 minutes to 2 days. Day traders need to use the 7-10 DMA to trigger buy and sell decisions. Using this gets you in and out very, very fast. But in time you get to study stocks and their price and volume trading patterns. There are many times that I ‘m able to trade the same gold and oil stocks 2, 3 and 4 times a day. True, I have to pay taxes on my trading profits, but it’s only the difference between the 20% Capital gains rate and my tax bracket rate and only in my regular trading accounts and not in my IRAs. I’d rather have the profits in hand than HOPE that they’ll still be there over 1 year later.
P.S. – I’ve been retired since I was 52 yrs old and that was 10 years ago. I made and lost tons of money in the 1978-1980 gold mania. I sold all my Kruggies back in 1980 at $500/each when gold broke down. It’s only been this year that I started to accumulate gold and silver bullion again. What I’m doing now is that whatever trading profits I make on my gold trades, I use that money to buy physical bullion. I’m not afraid of being out of gold stocks, for short periods. Like I said, I’ll just pay a little more to get back in. In the meantime, I’m building quite a physical portfolio of PMs.