My second observation in my new career!

As I watch the chat rooms and the Twitter/ Stocktwits feeds I am amazed at how brutal and competitive individuals are in this industry. I am fascinated by the way the technical guys don't care for the fundamental guys. How the day traders dislike the swing traders or long term investors  How the longs dislike the shorts and vise versa. Its really amazing to me that the egos are so huge, people will laugh at, slander or completely disrespect another person whom they do not know based upon their investment philosophy. I am by no means saying that this happens in every chat room or that all traders are like this. I personally have met some really fantastic, smart and helpful individuals through these venues.

I think that being humble is something of a lost art in this trade. Frankly, I wish that all investors and especially those that do this for a living, were always successful each and every day. Unfortunately this can not be the case since there will always be a winner and a loser at the end of each day. In my mind this does not mean you should slam it in someones face when you come out on top or celebrate someone's loss. What is wrong with just quietly taking your winnings while showing some dignity and respect for others that are less fortunate or happen to have a different time horizon than yourself.

I have been told that I needed to decide what type of trader I am going to be. That I have to choose between being a technical trader or a fundamental trader. That I need to decide whether I will be a day trader or a swing trader/long term holder. Whether I am short biased or long biased. Guess what? I am all of the above!

I firmly believe you can be all of them successfully. How is this possible?? The day trader may be successful with his day trade, while the swing trader may be taking a hit. The short may be killing it, while the long is getting smashed. The swing trader may be down for the day but the long term holder is up for the month.

Its all about time and how you view each trade/investment. What time frame are you looking at for each and every trade you make?

Was there a "fluff piece" press release for a company that has never made a dime and may never make a dime during its entire existence? Probably not a stock I want to hold for the long term or overnight. I will sure as heck play it for a day trade though.

Is there a specific catalyst that is coming up for a company that I want exposure to? This would be one that I may want to take for a swing trade.

Did the company just report its second stellar earnings report and raise guidance for the balance of the year?
This may be one I just want to buy and stick away in my IRA and forget about since I like and believe in the long term story.

How about a company that just announced its being investigated for accounting fraud or it reports a terrible quarter and lowers guidance for the foreseeable future. I would say this would probably be a good short for a day trade as well as a possible long term hold short.

What do you know about the company??

 I see statements all the time like>> "This company is a turd short it on every pop. "Or  "This is the most manipulated piece of garbage in the market sell it on every pop". Or "this company is a scam its only a matter of time before they go bankrupt so get out while you can". "They are going to dilute the shareholders get out now!!"
On the flip side its> "Back up the truck this thing is going to the moon!!" or "Shorts better cover or you are toast!" Or "This stock is so undervalued you would be an idiot not to buy it here!!!" "Those earnings were incredible, this is just the beginning." Or "They are going to be bought out soon hurry get in while you can!!!" "Huge news right around the corner don't miss out!!!!"

There may be validity to all those statements but unless you know about the company and its financial position, its management, its product line or service, its recent earnings performance, the future outlook then all you are doing is making an investment decision based on the opinion of someone that you do not know. This includes analysts and Seeking Alpha authors. You are basing your decisions off of someone else's opinion or their research. Their hype or their doom and gloom prediction  Do you know how many analysts and so called experts get it wrong? Do you know how many people lack vision or fail to see the greater picture? How do you know they don't have their own hidden agenda or their own best interest in mind? Maybe they want to buy the shares cheaper or they have a short position or they have puts. Maybe they have calls or want to sell calls or they are under water and want the shares to rise so they can get back to even and bail.

The bottom line is this if you don't do the homework on a company and if you don't take the time to educate yourself and get to know a company intimately. Then it should only be a day trade.  Plain and simple!!!

   
I respect all types of traders, but as far as I know Warren Buffet is not a day trader. He is one of the wealthiest individuals we have in our country. He does his homework and he invests for the long term and that has made him a multi BILLIONAIRE !! I do not know of, nor can I think of ANY day trader Billionaires. Looking at the two charts  can you tell me what turd stocks those are? You see I believe that at some point all stocks are turd stocks and over time some of those turds can become diamonds. In order to find those diamonds you have to do the home work and you have to ignore all the noise and negativity that comes with owning one of these turd stocks as they grow and mature into the diamond. The only way you can do that is by feeling comfortable in your own due diligence and having a trading plan in case your thesis turns out to be wrong.

Its all about time! What is your time frame? What are you willing to tie up and for how long? What is your risk reward ratio? What are your missed opportunity costs?

This is why it is key to have two separate accounts for each style of trading. Your trading account is for those companies and stocks that you know nothing about other than the fact that they are in play. Momo stocks, pr plays, trending stocks on twitter and stocktwits should all be stocks you trade for the day.

 I have found some pretty incredible companies that way. They started out as day trades but then I actually did some research and read some reports, called the companies themselves, talked to investor relations, studied there product or service, used it or ordered it myself. Talked to professionals in their industry and asked their opinion of a particular product or service. My most recent example of this is $BIOL I had to go to the dentist and while I was there guess what I did? I asked the Doc if they had ever heard of or used any products from Biolase. I look at the financials and I ask lots of questions. I send emails and gauge the level of professionalism and the amount of time it takes to get a response from the company. I ask friends and family what they think of or if they have ever used a product or service from a company and what their experience was. The more of this I do the more comfortable I am with turning my investment in  a company from a day trade to a swing trade and from a swing trade into a long term hold..

I love looking at charts and I think technical setups are very real. They are great indicators of where a stock may move to next. There is some real powerful stuff out there and the charts to a trader are like an X-ray is to the Doctor. They give you a picture of the stocks life and whether it looks healthy or not. Where its been and where it may be going. You can do that in many time frames.So if you are the day trader you don't care about the weekly or the monthly you only care about the  15 minute or the 30 minute or the 5 minute and maybe the daily. If you are an investor or swing trader then you don't care about the five minute or the 30 minute or even the daily for that matter.You may just care about the weekly or the monthly. In either case that doesn't make you wrong or right , smart or stupid , better or worse, it just means you have a different philosophy, a different plan and a different time frame in mind for that particular investment.

There seems to be a lot of haters out there and its really a shame because I do believe that we could all learn from one another no matter what style of trader you are. Seek to understand before trying to be understood.

Oh and by the way, before I forget >>>the two turd stocks are >> Drum roll please!!!!!

Have a great weekend folks I will see you later this weekend with the video watch list.