Interesting trading philosophy, Paul. It is almost diametrically opposed to my own philosophy, which just goes to show, there are many ways to skin a cat and one man's meat is another man's (ahem, or woman's) poison. I loved playing CROX after its recent decline-and-fall, and don't consider myself particularly nimble (though I am a scalper by nature), and I intend to do so again this coming week, though I don't usually do 'falling knives'.
1) I don't chase winners because when I do it usually turns out to be the top and I get hammered. To me, the entry is the most critical aspect of a successful trade, and I wait for price to come to me, or I don't play.
2) I don't short losers because by the time one realizes they are losers, the easy money has already been made and only the crumbs are left.
3) I do like to play snorters that 'go thump' because a) they tend to come roaring back fairly quickly, and b) the first reaction often results in the weaker move. One thing I learned from 2MAR$ is not to hold a position through earnings, but rather wait for the first reaction to the report to complete, then play the counter move = easy money.
4) I like the stocks with heavy hedge fund investment that can 'whip you around like a ragdoll' because, for a scalper, there's gold in them thar hills. Minimum time in the market = minimum risk.
5) I depend on RSI and CCI a great deal in scalping because the OB/OS points reflect S/R levels in price, making them easier to identify. By checking the timeframes above and below the one I'm trading in I can often see if the odds are OB/OS will become more OB/OS and the S/R point will be breached, indicating one should hold the position longer and not take the cover/sell signal in the timeframe one is trading.
6) I play all price-range of stocks, but think the little guys are actually the most lucrative since one tends to risk less money to snare larger percentage gains.
You know, Paul, we are all very different people, and IMO there is no right or wrong way to trade stocks if one is making money. As I've said many times before, you can share all your trading secrets with everyone and it doesn't matter, because the system you develop is geared towards your own individual strengths and weaknesses, so it works for you and only you, and that shoe isn't going to fit someone else's foot. That is why traders who merely piggyback on another's successful trade will usually lose money.
Only experience in the markets can teach us what works for us individually and what doesn't, and recognizing one's strengths and weaknesses and concentrating on what works is what leads to trading success.
Newly
AI
