I've added a stocktwits feed to the blog on the right. Here I will post my trades and quick comments about the market.
As I've stated before, I'm going to partake in more speculative endeavors. I've always considered myself part investor, part speculator but since I've been trading full time I've emphasized the investor part a lot more. In fact, up until last Thursday, I haven't made a pure speculative trade since 2009. I have engaged in speculative trading in the past with mixed results but since I've started trading full time (starting in late 2008) I have not resorted to it simply because from experience I know that in bull market conditions, the most effective strategy is a buy and hold one. I've also learned that that big money is made by identifying and riding the big trends. Most importantly, I've been good at this type of strategy vastly outperforming the market with less downside volatility. But when the market is sideways or in outright bear mode, a ST/IT trading approach is usually the optimal one. This type of trading is just that....trading NOT investing and such trading is synonymous with speculating whereby you're focus is based purely on price action not fundamentals/value.
Most of the ledgends out there like Soros, Buffet, Templeton all had success using a fundamentals/value approach (although Soros also incorporates a speculative approach as well). I still believe that this is the best way to approach the market longer term. But if you look around the blogosphere and message boards you'll find that your average retail stock market player take a pure ST speculative approach (with a permabear bias). I suspect the main reason why most people take such approach is because they seek instant gratification. They don't have the patience of these legends. They want to see the results quickly and they want to get rich quick too. Unfortunately, that's that's probably why most people fail in this game. The market is often too random in the ST and sooner or later those who make large bets on ST trades get wiped out even if they had initial success. Having said that though, I believe there are times where lucrative ST trading opportunities present themselves but they don't present themselves everyday. You need to be patient in waiting for them. I made a really profitable, abliet very small trade last week. It produced a 850% gain in 1 day - the exact type of instant gratification, get rich quick trade that I spoke against of! It's easy to start thinking that you can find such trades every day or every week using size and that's when you'll blow your brains out giving back all your gains and more. I need to make sure I don't fall into that trap.
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