Lesson 8: Don't trade when the market is open...$$
Yep, you read that right, I never trade when the market is open. As a matter of fact, I rarely look at the stock market on weekdays at all. The way the market fluctuates during the day causes you to make all sorts of awful, snap decisions that usually end up screwing you more than working out. I refuse to trade on weekdays unless something insanely amazing is occurring. The best example of when I did trade on a weekday, I woke up at 6am for some ungodly reason and turned on Howard Stern's show to hear he was going to Sirius Satellite radio. I immediately bought as many shares as I could because I knew there'd be a huge pop to the stock when the people on the west coast woke up and heard this news. I was right and it was a great day for me.
So, when do I trade? Well, I look at the market after the close on Friday and I see what I'm up on, what's down and I make myself a list of possible trades I want to make. I then spend all day Saturday and Sunday just thinking about those ideas. Do I want to do them? For example, right now the question is, should I take profit out of my Apple ($AAPL) position? Instead of deciding immediately, I think about it for a couple of days. I usually decide to let it run because the iPad is going to shatter records. That stock is headed up, WAY up. So I hold it, but the point is, I don't just make that decision while the stock is moving during the day. I wait until Friday night and give myself 2 full days to think about it and make a good, rational decision.
Sunday nights, usually around 7 or 8 pm is when I put in my orders for open of the market Monday morning. I just put my orders in, set them to Good Til Cancelled and let them go. Monday morning I get emails confirming the trades that were made. No stress.
So, when people tell you it takes a ton of time to be a stock trader and that you have to watch it constantly and that it's a full time job, tell them they're nuts. I 'work' on my stock trading for about 30 minutes a week, or a whopping 26 hours a YEAR. And I kill the market. It's not rocket science. It's having a solid strategy and sticking to it.
So, wait until the market is closed, take a look at your positions, make yourself a list of possible trades and take your time and think about them before you pull the trigger.
Invest in peace...
