Market Comments Submitted by The Ambitious Trader
Submitted by The Ambitious Trader: Stocks, Trading, Investing..My Ambitions as a Trader and Investor
Get Rid of Laggards…
The market is constantly changing. Thus, whenever the market is ready to resume or make a new move higher, more often than not, a new pack of leading stocks emerge. You may find several stocks in your portfolio under performing or lagging behind the market. If this is the case, it is usually best to sell/cut loose these poor performing stocks and replace them with new, better performing stocks. The goal is not to trail or match the indexes. The goal is to beat them. If you are only concerned with matching them, then just buy some market ETF’s and call it a day. If you are attempting to outperform the market, then you have to buy the top performing stocks that emerge from the markets positive action.
Example: Nasdaq (+0.81%) v.s. DDRX (+13.6%). While DDRX can pose as a riskier trade, the reward is obviously larger. A stock like DDRX has a chance to continue a strong move. Tomorrow, the market may post a 0.56% gain, while DDRX might edge up another 5-6%. In the end, you might make 1% or so on the NASDAQ, but you may be able to pull a 3% or higher move on the stock.
The Ambitious Trader: Stocks, Trading, Investing..My Ambitions as a Trader and Investor is not a registered investment advisor. Please read the complete Small Cap Stocks Blog Disclaimer
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