Day to Day
Someone liked my recommendation to watch Cramer and asked what else they could do to get familiar with the market. There are lots of ways, but let’s start the basics. Every morning I start my day by looking at CNBC to check the pre-market (I have their app on my phone). Many people may not realize this but the stock market trades outside of its opening hours. The professional traders who make up most of the participants in these out-of-hours trading set the market’s opening levels. Mind you, the pre-market does not reflect what the market will actually do that day. It just gives you and indication of whether the market will open up or down.
If the market is slated to open way up or way down (over a 1% point swing either way on the indexes), I make sure to be at my desk at 9:30 and have my trading page open and ready to go. Often I can take advantage of a big swing in the open to open or close option contracts. Or, better still, buy a stock that has had a hit due to a weak earnings report or bad news. If the hit looks an over-reaction to news (and over-reactions are common) it can be a buying opportunity.
Before I sit down though, I have my first cup of coffee and scan the Wall Street Journal before the market opens. I get the actual newspaper (old fashioned but very satisfying) and check to see if there is any news on companies I own or would like to own. It this instant news world, most of what is in the paper version of the WSJ is old news by the time I get to it but the in-depth articles help if I am trying to really understand something (like Bitcoin).
Once the market opens, I am at my desk and very busy for the first half hour. I frequently make 80% of my daily trading profits before 10am. Then I get more coffee and start taking care of other things; laundry, gardening or general housekeeping stuff. If the market is volatile, I may sit and actually watch my account and CNBC. I try to be nimble, I may open and close the same trade a couple times a day. If the market is flat, I may go out and run errands. Today the market is moving up and down so I am watching. Surprisingly, Robinhood stock is up 35% (it went public last week - which means it offered some of its stock on the Nasdaq exchange for the first time). Because it is a ‘buzzy’ stock, people are scrambling to talk about it on CNBC. There was also some jobs data that disappointed but business inventory info that was positive. There was a big real estate deal. So market is all over the place and I am looking for opportunities. I will watch today.