So I'm doing some simulated trading. I've gotten back into the game, so I'm back to reading about technical analysis. I want to do two types of trading. The intra-month type tradng, like I did with AAPL. It's up 10% since I "got in" at 456. It was a technical read. If I had something else to go for, I'd have gotten out at 500, to see it's reaction to that support-level. It has support at 480, though, so I'm on a stop-loss there.
Then I wish to do the long investments, like I will TSLA. Right now, it's in a weird technical space, so I might get out for the time being, being 40% up from coming in at 100. But I see that company steadily growing over the next years.
So, burnt by previous endeavors, I try the simulated run. Getting into NinjaTrader (shout if there's any better programs) with free data streams, and I'll look into programming a modified Heikin Ashi chart, myself, with custom alarms on various indicators.
And I'm doing a Coursera course on Computational Investing, part of which is programming your own market simulator in Python. Reading a handful of books, on all from TA, Heikin Ashi and some introductory books on hedge funds and other trading. I love being 'in the zone' like this. Might also go for a job in programming trading solutions.
Holding a stock that's risen by multiples through earnings is a huge gamble. Yeah, it could rise, but it could crash and burn if they miss or even merely meet expectations.
At least take some profits and gamble with the rest
With a 550% profit, you have a great luxury of just setting a stop-loss, and moving it behind, following the trends. There's no need to keep the stock if it sinks more than 5% from today's level. Do some simple TA of finding resistance levels and support levels, with some trend indicators, and you'll be happy to put a stop-loss just below the support-level, and move it up when it breaks a resistance level. Then the stock can do whatever it pleases, and you can not lose money.
I kind of dabble in fear investing...I buy stocks when they shit the bed because more often than not it's over-reaction that causes a stock to go down. It takes a strong stomach though...I've held onto stocks that have gone down 40-50%.
I need to stay away from the yahoo boards, the shorts do a good job of making you doubt placing a long term bet on a stock.
The first rule of investing is making your gains big and your losses small. You need a rule when you get into a stock of when you're getting out. The mindset of "I'll just stay in a while longer, because it's bound to bounce back" is ludicrous. I've held onto a stock that went down more than 50%, and I will never do it again. I burnt myself so bad, I will never do a bad investment ever again. If you're sure the stock will bounce back, then it's all the more reason to get out. Get out, see when it bounces, and get back in. Then you'll profit on the way back up, instead of just returning to zero.
Having a strict, say, "Always get out if it's down 3% from where I got in" will keep you from hanging on to falling stocks. The pride of thinking "I'm sure I wasn't wrong, it'll go up" can only hurt you. Greed, pride and fear. If you cannot control those emotions, you'll be swallowed by the market.
