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Today, I bought and sold 1000 shares of Sunw( Sun Micro) for a $250
gain.because while reviewing many active movers in the market which I do
each day, I saw Sunw had made a major drop this morning, after the market
opening.
As I have stated before I always trade in 1000 share lots. I am trading on
margin. I trade with a $50,000 margin account which gives me $100,000 to
trade with each day. I could trade with more, but I decided to limit my
trading to make the math simple. So if on occasion I go past my $100K
limit, if is usually for defending my position only. I wanted to short MSFT
yesterday when the legal news came out, but since I had just bought into a
stock I decided not to over extend myself.
The amount of money isn't that important. You could do the same with $10,000
or less. The only difference is the gain per point would be different.
Remember it isn't how much you make, but your return on the investment that
really counts!!! So I didn't do so good today.
My intent is to pick-up one point each day in one stock. So I look for a
stock the will do this for me.
I average about 2-3 point of gain each week.
Trading stock isn't anything more than reading the market. Remember what I
said about 70-20-10. Today was a good example of this. The market was
down, the industry was down, and the stock is in the dog house.
BUT, I felt Sunw was in an oversold condition. So I bought it. I know if
the market had been stronger I would have been successful. But that didn't
happen so I got out with a small gain. When you watch the market for a
long time you will see, momentum changes that occur each day. That
generally tells you when to trade.
Why, do I take the time to talk about my trading, I want to teach others.
Maybe I should write a book!
I also need feedback from others for both encouragement and for thought
provoking comments to help me better understand why I do what I do and to
keep motivated.
When you trade like I do, it is you a computer screen and CNBC... I enjoy
Joe Kerran, cynical attitude, but, hearing from other keeps me going. I
often feel very isolated.
So I hope this has provided a little insight into my trading process.
Sorry for the short posts during the trading day....
Any questions?
Class dismissed.
Regards
Don Green
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