Thursday, December 04, 2008

Trading tips for NYSE

a list i mentally compiled to myself along the way...

1. If you find yourself 15% up in a day, you can also be 15% down tomorrow. It's called volatility. Liquidate.

2. Do not trade pre-market. Do not trade in the 1st 15min. Have a feel for general sentiment of the day before committing.

3. Asia lags US. Do not use Asian markets to predict US movements. Not even for identical company stocks listed across different exchanges.

4. Do not worry if a trading strategy is sound. If enough people use it, it is sound. E.g. moving averages technical analysis. Just use it as another indicator.

5. Do not be worried about low volume declines.

6. US stocks can be very volatile. Be careful with the stop-loss. If you do not have a stop-loss, justify it. If you have a stop-loss, justify it too. Move on.

7. In general (only for buy), do not queue for stocks at a price a few notches lower than market price. It's completely pointless. If it decides to fall, it will fall through your queue price, and you are wasting time and effort monitoring the stock. Better to have your button on market order once the price stabilises.

8. Try to time the market if you can. Some days you get it right, some days you get it wrong. Plain wrong. Do not over-obsess over the difference of a few ticks. Feel you could have bought at US$0.20 lower? Yea it sucks. Learn from your mistakes and compile a list of WHAT-NOT-TO-DO, like this one.

Now for a real test of my mettle. To the frontline...
2:00am Las Vegas Sands Corp. LVS 5.39 +0.75 (16.16%)
LVS is up 16% in a day. According to Rule No 1, I should sell. Should I?

2:08am Las Vegas Sands Corp. LVS 5.27 +0.63 (13.58%)
Indecision...din sell.

2:15am Las Vegas Sands Corp. LVS 5.09 +0.45 (9.70%)
Ok. The ship has sailed. Queueing to sell at 5.40. Goodnight.

2:20am Las Vegas Sands Corp. LVS 5.04 +0.40 (8.62%)
That's what i get for NOT following my own rules!!!

3:00am Las Vegas Sands Corp. LVS 4.87 +0.23 (4.96%)
*nothing to say*

3:13am Las Vegas Sands Corp. LVS 5.25 +0.61 (13.15%)
Beautiful play of geometric brownian motion here.

3:35am Las Vegas Sands Corp. LVS 5.41 +0.77 (16.59%)

4:09am Las Vegas Sands Corp. LVS 5.03 +0.39 (8.41%)
a foolish game of randomness, but seriously's bouncing up and down like a yo-yo, almost predictably, dare i say?



avinash said...

Just a contrarian view to pt no 4- If most people are thinking of something( the same thing), then it's wrong. (though charts never lie, its just how ppl interpret it that gives different directions)

Required field left blank said...

I was thinking along the line of some popular technical analysis indicators. Say,the stock price dips below MA-50
(moving average 50) trendline, which is a strong sell indicator, and if enough investors are watching the MA-50 (or enough computers are programmed to sell on MA-50), then probably the stock may fall. I have not used TA yet, so can't really verify it.