Help deciding on a stock to enter position trade.

[RobertGO]

Ok, so I have been looking for a big company to enter a position trade with (1 to 2 months) I am planing to put £10,000 into one of these 3 companies, I'd appreciate any feedback. I came up with 3 that look good.

Apple
Google
Yahoo

Here are the daily and weekly charts of each with trend lines drawn on.
Thanks.

Sorry about the stochastic and vol on those charts, its late.

 

[Liquid validity]

Unless you total trading pot is £500k, none of them.
Judging by the amount, and the question you are asking, I have a suspicion
that £10k is your whole bankroll.
Which means your trade risk is 100% - a good way to lose all, or at least a big chunk of it.

Going all in - betting the farm is never a good idea,
no matter how sure you are of the trade outcome,
the trade outcome is a future event - unknown.

Controlling your risk is the only thing you do have true control of.
Sticking to 2% risk per trade or less is the safest.
http://www.trade2win.com/boards/psy...on-sizing-compounding-keys-magic-kingdom.html

 

[RobertGO]

Ok, what about if i start with £200 in one and then add to it as it progresses?

Or should I stay with the 200?
Thanks.

 

[Liquid validity]

Ok, what about if i start with £200 in one and then add to it as it progresses?

Or should I stay with the 200?
Thanks.

You are basically talking about scaling in to a position there.
I would still stick to 2% maximum - £200, i.e add 0.5% at a time up to 2% for example.

Have a read of this:
http://www.trade2win.com/boards/new...e-info-clarifications-short-term-trading.html

If you go down that road beware of leverage, understand it and respect it
before you use it properly, if you don't you will get burnt.

 

[RobertGO]

Ok thanks.

1 more question, would you consider position trades to be safer than day trades?

 

[Liquid validity]

Ok thanks.

1 more question, would you consider position trades to be safer than day trades?

That purely depends on whether you end up being better at position trading
or day trading, if any.
That will largely be down to your personality.

No trading is safe as such anyway.
Position trading carries the risk of large overnight swings,
open gaps, larger drawdown, patience requirement.

Day trading has leverage risks, slippage risks (as gains are magnified, so are losses), price feed / server disruptions and so on (relatively rare has to be said).
Also sudden spikes are more of a threat with day trading, you have less time
to think and react than with position trading.

Probably missed some points, but you get the idea, pro's and con's no matter
how you trade.
That is something you really have to work out for yourself.

Buy all 3 copies of market wizards:
Market Wizards: Interviews with Top Traders: Amazon.co.uk: Jack D. Schwager: Books
http://www.amazon.co.uk/New-Market-Wizards-Conversations-Americas/dp/0887306675
http://www.amazon.co.uk/Hedge-Fund-Market-Wizards-Seykota/dp/1118273044

Read them all.
From that you will see that the method and type of trading has to suit you personally.
There are traders in there that have done very well with fundamental analysis,
others who lost heavily with FA.
Same with technical analysis and so on.