Can a savvy stock picker still manage to come out ahead? perhaps. Traders and hedgies are pushing the envelope ever so slightly until it falls off the table, especially those who are playing catch up compared to their peers (or is it their bonus). There are two sticky notes on my walls staring at me that read "Buy Low, Sell High and Take Profit". I am learning to cut my loss early if I am wrong footed, usually this means within the next hour or close out my trade before the close. Cash is safer with me than parked on a stock in this volatile market environment. Increasingly many are talking of a market tipping over and heading south. For most fund managers, the reality is there is really no other place to park client's money if their mandate is to stay mostly invested (and doing with much trepidation) and as such equities are marching on at relentless pace. However, lately we are beginning to see signs of cracks.
I keep reminding myself that trading is simple, there is no need to over complicate one's trading strategies. Get out of something that is not working, has not worked, and stick with what works and has worked in the past. I have a handful of biotech and drug recovery companies I buy (and Sell) and that is working right now and I thank my lucky stars. I also own individual small miners as proxy to SLW, GDX and their underlying ETFs (SLV, GLD). I have been able to profit from these smaller names trading alongside the bigger names. I am still selling puts and calls to balance the volatility on my portfolio. The last few months, I tried to profit off short term momentum of a stock candidate. I am not buying any blue chips or utilities or any other hot shot that are all sitting at 52 week high. When the market crushes, I will have my pickings there.
If you are looking for a good book on the HFTs, read this book Dark Pools: The Rise of the Machine Traders and the Rigging of the U.S. Stock Market
Good luck trading
