Day Trading or Long term?

Discussion in 'The Lounge - Off Topic Chat' started by Dex, Feb 28, 2013.

  1. Dex

    Dex VIP Member

    Mar 30, 2011
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    I don't care about news or fundamentals because they don't matter. Just trade the charts.

    Netflix, Google, Tesla, Priceline, Pandora, etc... None of those stock prices make sense. Don't get caught up in buying stocks because it's overvalued or undervalued. The market does what the market wants. Trying to predict or guide the market never works out

    I got caught up shorting pandora for a while because of various reasons. Bottom line is 95% of the stock is owned by institutions. You can't fight them
     
    Last edited: Apr 21, 2014
  2. JR Ewing

    JR Ewing VIP Member

    Nov 9, 2012
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    I am all about fundamentals myself. 90-95% of my investing is based upon fundamentals.

    The other 5-10% is more speculative and often very short term, and usually based upon things that are likely to move the price significantly either short or longterm (or both), and may not show up in a company's fundamentals for a while - such as clinical drug trial results or FDA decisions, oil or gas strikes, possible M&A activity, activist shareholder activity, etc, etc.

    This speculative investing / trading is done in such a way that my potential downside is quite limited, so that there's no way in hell I can have one investment or trade come anywhere near wiping me out. But 90-95% of my time, money, and focus is on more traditional investing along the lines of Benjamin Graham, Buffett, Dalio, Peter Lynch, et al. Mostly bottom-up, mid to long term, driven by fundamentals.

    Dex mentioned something I think is also very important to the smaller investor - institutional activity. Part of my own screening process with investments is to look at who is buying and selling. Institutions, funds, firms, and large individual investors with over $150 million have to disclose their holdings every quarter, and this info is easily found online. If a company has little or no interest from the big boys, it's not likely to move very much anytime soon unless something unusual happens.

    As for charts, they have a very limited role in my own investing. They are useful to me for the odd quick trade - volume, buy / sell ratio, etc. But I don't really rely on them for positions I plan to hold for any length of time. I know many rely on them and a few report great success with them, but I'm all about fundamentals with 90+% of my money. If a company with great fundamentals suddenly sells off hard when it dips below a moving average or when the market overreacts to earnings forecasts that were good but that the market was disappointed in or whatever, I generally see that as a buying opportunity.
     
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  3. JR Ewing

    JR Ewing VIP Member

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  4. Turbolag

    Turbolag TID's Official Donut Tester

    Oct 14, 2012
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    After reading more, day trading is definitely out for me at the moment.

    Maybe I'll be skilled enough to make a go at it later.
     
  5. JR Ewing

    JR Ewing VIP Member

    Nov 9, 2012
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    One huge disadvantage with "day trading" in its strictest term (liquidating everything before the bell EVERY day) in general is that you miss these big moves that occur (up AND also down) in securities and in the markets before and after the bell.

    Other than options, the only possible way to try to get around some of this that I'm aware of is to pay a good chunk of change for a trading system that will allow you to access the unregulated markets before and after the market open / close. This is a very risky endeavor in general.

    Most of this info that really drives short term price changes is released outside of market hours most of the time. Makes it easier for the people and machines who make the real markets to keep order.
     
    Last edited: Apr 24, 2014
    Turbolag likes this.
  6. Dex

    Dex VIP Member

    Mar 30, 2011
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    That's really not what day trading is about though. I don't need to catch moves and hold positions. I can always pull a few points from the market and I'm not looking for home runs. I usually look for 2-4 points per trade on the ES Mini. With 10 contracts thats 1-2k. I also don't like trading pre market with futures or stock.
     
  7. JR Ewing

    JR Ewing VIP Member

    Nov 9, 2012
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    I guess it depends upon what your particular game is.

    The feds define "pattern day trading" as buying and selling the same security on the same day more than 3 times during a 5 day period. Books that I read way back in the stone age about "day trading" were either about "scalping" or otherwise attempting to profit from shortterm moves on a daily basis, and they preached selling out and being in cash by the end of each day because of what may happen before the open or after the closing bell.

    I found that what happens before or after is what makes me most of my money most of the time, and that the scalping and other frequent transactions they taught cost me thousands a year or more just in transaction fees. Then there's speed of execution, taxes, realized losses, etc. So my style of investing evolved. At the end of the day, I realized I was more suited to holding most positions a little while, investing mostly on fundamentals, and limiting the amount of time and resources I put into short term trading.
     
  8. graniteman

    graniteman VIP Member

    Dec 31, 2011
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    Here's one to keep a close eye on, big potential for gains. MNKD - Mannkind has received a unanomous approval to apply for approval for a inhaled Diabetes treatment, both type 1 & 2. If this gets FDA approval it could go sky high and it looks like it will.
     
    JR Ewing likes this.
  9. midevil

    midevil TID Board Of Directors

    Jan 20, 2011
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    Long term for me ... and it's done me right!
     
  10. Dex

    Dex VIP Member

    Mar 30, 2011
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    Don't believe the hype. Even if it's approved the stock usually pops and sells off.
     
  11. C T J

    C T J Crossfit VIP

    Jan 24, 2013
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    Been a tough past 30 days. P/L has been ranging. Hope it breaks out soon!
    Capture.jpg Capture2.jpg
     
  12. Dex

    Dex VIP Member

    Mar 30, 2011
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    Staying consistent and profitable though!
     
    C T J likes this.

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