I received a couple e-mails that indicate I need to make some comments regarding the holding of positions.
Short term or swing trading is holding overnight, or more appropriately over several nights. That is why we post both a stop and target price. You should be able to buy it and forget it, except for one thing, that being earnings. You don't want to hold over during earnings, so you might have to sell before the target is met.
To make the most off earnings plays, prior to the release you have to be willing to hold overnight. But again, I strongly recommend not holding over during the earnings release, that will get you burned, if the earnings are that good, you can always buy the stock back. And, there are always plenty of other safer positions. For example, APOL was a play prior to earnings based on the strength it had at 40 support, then as a breakout the day after earnings.
Don't let someone first tell you how much they make buying earnings plays as much as two weeks prior, then tell you they don't hold overnight. The best gains are made by being willing to hold overnight, especially when the market risk favors the longs. And, holding earnings plays overnight during the earnings release makes the worse losses.
Breakouts are not necessarily more than a day trade, but I often hold them for a night or more. Keeping in mind that 80% of the time a breakout retests the support, and often you can buy the stock back at, or lower, than your first position.
While breakouts are hard to determine the best sell, they are easier to buy since they self select by not even considering them until they break their previous days high by 20 cents or so. While the short-term stocks have a broad buy range, we calculate it based on an average of the stocks daily range. Waiting and buying lower can increase your percentage gain to the target, but you risk not getting into the position at all.
Sam
AI
