“I think it was a long step forward in my trading education when I realized at last that when old Mr Partridge kept on telling other customers, “Well, you know this is a bull market!” he really meant to tell them that the big money was not in the individual fluctuations but in the main movements-that is, not in reading the tape but in sizing up the entire market and its trend.” –Reminiscences of a Stock Market Operator
What the above quote is saying is that the big money is not in day trading, scalping, predicting, or trying to short at tops and buy at bottoms. No, the real money is figuring out if the market environment is bullish or bearish, if your stock, index, or market is being bought at support or sold at resistance levels. The money is in understanding if the market is trending up after each correction, falling down lower after each rally, or just trading in a range.
The big money is in trading the biggest monster stocks with huge earnings growth expectations on the long side in bull markets, that is the single best way to make the big money. And you do not need to trade and watch 20, I personally only need 2 or 3 to be very profitable. Look for the biggest winners in every market cycle and trade those. Big money is also to be found in shorting former leading stocks that make huge missteps with investors or customers, while this is more difficult to play the short side the right entry early can give you room to let your winner run to the downside.
If you want to be a successful trader play the right side of the market and quit trying to be a hero by buying the plunge and selling short the top. I do not look for $1 gains in a day I look for $100 trends over weeks. When I am wrong I get out quickly, when I am right a little I get a $10 move as a consolation, when I am right big I get the $20, $50, and even $100 moves in the big stocks.
In bull markets buy support (5 day ema, 10day sma, 21day ema, and 50 day sma) in bear markets short resistance.(50 day sma, 200 day sma)
At the beginning of bull markets buy the break outs of old resistance. (200day sma) At the end of bull markets sell the loss of support (21 day ema, 50day sma)
Trade on the right side of the markets my friends, that is half the battle.