Dino, prices move in waves
some small , some large
Day trading is riding small waves. Long term traders try to ride longer waves. They all chose a length of wave they more or less understand. There is no point in rising $1 and then going down with it. So knowing your horizon is essential.
Waves are created by many factors. Interest rates is one of them. I'm sure you know others.
A holder is an imbecile (no pun), unless is the owner of the company or the business has huge upside potential. Even then potential is lost for not riding. Nowadays companies learned it and they also participate actively in trading - including Nortel!
Long are gone the days when they were doing just business operations. They make huge $$$ from trading ..... against you and me.
They announce buys but rarely if ever selling. You just notice that institutional holdings go down ...
Open a chart, say 2-5 years and tell to yourself what you feel like doing. If you don't like it, then look to smaller charts, until you see waves you like and feel comfortable riding.
Or, you can hold blindly and ride it around...
There are + and - to trade and hold. For example if the stock is stronger than your chosen wave ... YOU LOST POTENTIAL or even MONEY! It happened to me BIG TIME. 100s K $ !! If I would've hold like an idiot (longer waves) I would've got lots of money. For example I started to buy NT big time right 1 day after the 2002 bottom.. And that's not the only thing..
But while bitter I'm ok with it. I learned plenty.
I consider it the big fish that got away .. this time around ;)
one last thing, waves change, so if you see strength you should let it run and vice-versa when you are cut short of your expectations.
Trading is an extremely difficult job. You always have to fight the best and stronger than yourself. There is no mercy and no tolerance for mistakes.
Just few survive. The rest are just having fun..
