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It's been a little while since I put out a blog, and for that I apologize. I've been a little busy, and I haven't done much trading lately. Though not all traders look at seasonal trends, I can tell you that what I'm seeing this month is a combination of seasonal selling and fear being put into the market. ..but when you break it down, we're looking at a market that neither wants to roll over or make a bull run. I make money in down markets and up markets, but in a market like this I get very bored - very quickly. I can scalp for dollars, but it's just not as fun as making larger gains.
Since this pullback the market is sort of in limbo - for swing traders it can be challenging to find a trade. ...and while most people expect to make trades on a daily basis, I would caution you that this shouldn't be your mission. Don't force a trade when there isn't one.
So until the market chooses a direction (which I imagine we'll know real soon, typically mid-late February we start to see an upward movement in certain sectors) my secret to making money is to open a smaller trading account for short term scalps only. So for example, on Friday I bought a bunch of $TRIT for around the $13.40 range... Today I sold it between $14.30-$14.80. I have also traded $CHLN a few times, while adding a small amount to my long term positions. Heck, I even acquired some $PUDA for a short term sale.
There are also repair strategies that you might consider. Take $IDI for example. I know many of you are stuck in a long position, and although there is nothing wrong with the company (they're doing everything right from what I can see), your patience is probably wearing thin. One might consider a repair strategy of selling their stock for the $5 range, and finding another $5 stock to replace it with. ...or find a $2.50 stock and buy twice as much. The key is to find a stock that's MOVING so you can make a quick in and out trade and move on.
There is nothing wrong with taking a loss and moving on. Think of your stocks like inventory. Sell some $5 product that's out of style, and replace it for another $5 product that's in style. Remember, instead of whining that one of your stocks is down, look around you - every stock is basically down or undervalued in some way, so take advantage of the situation! The ideal scenario would be to find a $1 stock that's moving to $5 and buy 5X that. Of course we all wish we knew which stocks were moving like that -- but you get the point.
So the bottom line is you can make money in this market. It's just a little harder --- and if you follow closely you too will find a rhythm that works for you. Just don't force it --- because you will kill your bankroll if you do.
Hope that helps! See you in the morning!
sg
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