Why I want to be a day trader
AEHR is one of the Zweig picks this week. It had a good showing a month ago, but recently has been quite pathetic. It gapped down 30% over night (despite being rated a "strong buy"), so if you were long with this one you were left holding the bag. I've had this happen a few times to me, and I hate the feeling of not having control over night. Several people have told me that trading intra-day is too risky. But I think you have more control when you don't hold positions overnight.
I won't be able to have a day job if I'm selling before 4:00, so that's something I'll need to work out before I jump fully in. I really think this is more my cup of tea than the weekly screen trading I've been doing for the past couple of years. Maybe when the market corrects and starts a new bull run I'll change my mind. But the last six months has really punished my stock screen trading right out of me.
I plan to keep everybody informed as I start trading in a new direction. I'm "going live" next Monday with my first day of selling at the close. I plan to detail at least a trade a day on the blog. If it works, it will be a less stressful (and hopefully more lucrative) way for me to trade. If it doesn't work, it will be another good lesson for me and the 2 others who read StockPunk.
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5 comments:
Your performance over the past few years has been stunning. Don't you understand that?
I know, I know. I've had a couple of good years. This year has sucked for just about everyone, too.
I plan to continue to track the stock screens I love, but I want to try something different. I'll give it a go, and if it doesn't work, I'll come crawling on my hands and knees (like the prodigal son I am) back to the loving arms of the Zweig screen.
As I commit to the screens, I would say this about AEHR:
1. My paper purchase date was 16-Jun at 10.10. The 2*ATR stop would have been 9.06 (about 10% lower).
2. Stop would have been hit about a week later.
3. Reading Domash's book has given me additional fundamental qualifiers to apply. AEHR for example had "Red Flags" on accounts rec growing much faster than sales and operating cashflow less than net income.
4. So overall, AEHR was a middling pick of Zweig, compared to say ARO or TDY.
If you were long AEHR fully following the screen from the entry point of 16-Jun then you'd be down 46%. That would suck which is why I have been learning about stops and position sizing. More recently, I've been learning about some of the red and yellow flags that can derail growth stocks which are well documented in Domash's book "Fire Your Stock Analyst." Finally, we all have recognize that this is a brutal market that is not conducive to a smooth trending strategy. Given that a miss of 1cent is sending some stocks down 10%, then those in the growth camp must be wary and if in doubt consider selling before an earnings date.
Good luck with the day trading. I look forward to seeing what you learn.
Rick,
Thanks for the encouragement. I really see day trading as a better alternative if you are trading for a living. I'm also planning on making a go of it in about a year (trading for a living). What the flip are we thinking?
SC,
You too smart to be reading this dumb blog. Thanks for all your contributions. I am sure that I learn more from my readers than they learn from me!
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