This year was low (number of trades) because I was patient on a trade that went south. It eventually turned around, but locked up all my capital until it did.
Basically, I refuse all conventional stock investing advice. I never diversify; at most my portfolio has two positions at a time. And I invest upwards of 90% of my cash on most trades. I do not trade on margin (well, technically I do because I don't wait for trades to clear before taking my next position)--but I don't buy stock than cash I have in the account. I only buy heavily traded equities; trading volume over a million shares and over a billion dollar market cap. And I focus on stocks with more or less sound fundamentals that are showing recent swings in price. Apple is a good example.
But as for a being highly methodical and data driven--I'm not. I have a few simple rules and am patient. I generally exit positions after 1-3%. And then I have a few that I let ride. It doesn't take much to hit 40% that way.
I spend less than an hour a week doing research and monitoring my position. I don't have any magic edge. But I'm making money, so continue chug along. A bull market definitely helps, but I've also done ok in a bear.
Nice. I do the same thing but my returns aren't that high, maybe between 20% and 30%. I use Google Finance as well.
My strategy is simple: I look at the day's biggest losers and, if my research says it's an overreaction/emotional, I'll buy in the hopes of selling in the next week. Most of the trading comes around earnings time. I had a pretty good return with Groupon (I sold too early though), Verisign, MMR and a few others.
I found I was spending too much time checking the screen when I should have been working though, so I just bought about 100 shares of Apple when they dipped below $520/share recently and hope to sell early next year when they get back up to $625 or so, hopefully after Q1 earnings.
By the way, this isn't a passive strategy for me. I use stop and limit orders, but it takes a lot of time to keep track (at least for me, but I'm not very efficient), which gets especially difficult when I'm traveling and the market stateside doesn't open until 7pm (bleh).
Do you trade long only, or short too? Ie, are you trading pure volatility, or more looking for situations where there's a temporary dip in pricing relative to fundamentals?
Do you monitor daily, > daily, and/or use any automated tools to stop out of or otherwise monitor your trades?
It seems like you could make consistent small wins here but would also be subject to occasional big losses.
90% of my trades are long. I should be shorting more often, but I seem to have an irrational apprehension towards it, which is just plain dumb.
It depends on the trade. If I have time to get a better feel of the way the stock has been moving, I'll trade volatility. That's when I'm setting lots of limit orders in a short period of time, which is uncommon for me. If I knew how to trade programmatically, I'd be doing a lot more of this. It's something I should learn this year. But most of my trading is based on what I feel are fundamental flaws I pricing.
I make it a point not to actively monitor. I have Google Finance up all day, but I'm not glued to it. I just set a limit order to close my position as soon as I get into it. No real automated trading tools and don't stop out (which is really bad practice I should change). I've looked at autotrading via subscriptions, but since I'm booming gains as high as these pros, I see no point to encumber myself with complexity. For now, I'm a profitable simpleton. Of course, I fully understand my days are numbered. I'd much rather I didn't trade, but I can't any other activity with this kind if return in time invested.
You're right--I should be coming against a big loss. Actually, I have seen big losses, but I just never realized them. That's what I mean by being patient. I just wait it out until the company turns around.
The sites I use for insight are: Google Finance and Trefis. And I see what is going on in the order book--I use Interactive Brokers, which offers access to almost tick by tick trading.
Basically, I refuse all conventional stock investing advice. I never diversify; at most my portfolio has two positions at a time. And I invest upwards of 90% of my cash on most trades. I do not trade on margin (well, technically I do because I don't wait for trades to clear before taking my next position)--but I don't buy stock than cash I have in the account. I only buy heavily traded equities; trading volume over a million shares and over a billion dollar market cap. And I focus on stocks with more or less sound fundamentals that are showing recent swings in price. Apple is a good example.
But as for a being highly methodical and data driven--I'm not. I have a few simple rules and am patient. I generally exit positions after 1-3%. And then I have a few that I let ride. It doesn't take much to hit 40% that way.
I spend less than an hour a week doing research and monitoring my position. I don't have any magic edge. But I'm making money, so continue chug along. A bull market definitely helps, but I've also done ok in a bear.