Try Watching a Few Stocks to Develop Your Edge
Thursday, March 29th, 2007
By Mitchell Clark, B.Comm. for Profit Confidential
Sometimes, you can make money by buying and selling a stock that you’ve followed for a long time. It used to be that this was what “pro traders” would do at an investment bank.
They’d follow a few stocks intently for long periods of time, and they’d get a real feel for how these stocks change in price. They could then speculate on the day-to-day traction action of these stocks in the hopes of making small, but consistent amounts of money.
Ten years ago, when I worked at a large investment firm, we had the Dow Jones Telerate quote and news service on our desks. Watching stocks trade and how they reacted after news came out was really interesting. I did develop a trader’s feel for the stocks that I followed, and it was really fun figuring out which direction stock prices would move.
Later, when the big technology/telecom boom hit, quite a few people turned to day trading to make a living. A few did very well, but most lost money. You don’t hear a lot about day traders anymore, but you can bet that there are still many people trading stocks for a living. The technology is such now that you don’t even have to go into an office, you can trade from your own living room.
I have to admit that following stocks and news in real time is addicting. It’s fun, exciting, and frustrating all at the same time. If you ever get the chance to do so, try following a couple of stocks intently for a while. I’d bet money that if you do, you’d develop your own trader’s feel for these stocks, and you could even make some money from their day-to-day trading action.
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Tags: dow jones, investment strategy, stock prices
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
