Swing and Day Trading: Evolution of a Trader

CHAPTER 13

Closing Position

I started investing in stocks near the beginning of a bull market, so I was fortunate. I used fundamental analysis to make my stock picks, and I pocketed a lot of money.

In later years, I became disenchanted because I repeatedly watched handsome gains turn into ugly losses. I did not know when to sell a buy-and-hold position.

I taught myself technical analysis and started position trading. I did not throw away the fundamentals; I just added timing mechanisms. Some of those position trades turned into swing trades as bear markets came and went, and I grew fearful of losing profits.

I experimented with day trading, but grew to dislike it. I do not like sitting before a screen, watching my money grow and die with each new candlestick. My guess is that day traders burn out quickly because of the stress of seeing their next mortgage payment appear and vanish.

A fund manager I know made a leveraged bet that went bad and put him out of business. His clients lost tens of millions. Trading for a living is not an easy life.

After the 2008–2009 bear market, I pumped money into the stock market and rode the bull to prosperity. Now, four years later, I have turned cautious. Some of the buy-and-hold positions that I held since the bear went into hibernation have been sold to lock-in profits. New positions will be shorter duration, so it is back to position and swing trading, sprinkled with buy-and-hold and maybe some day trades.

As I look back at my life, the point ...