Methods For Swing Traders
David Landry Of TradingMarkets.com
Ever heard of "grandma money management"? If not, ask David Landry, a sometime Technical Analysis of STOCKS & COMMODITIES contributor, to explain. Landry is a cofounder and director of research of TradingMarkets.com. In addition, as a Commodity Trading Advisor (CTA), Landry is president of money management firm Sentive Trading, LLC, and a principal of the Harvest Capital Management. He has designed a number of trading systems, including the 2/20 EMA breakout system and the volatility explosion method, and he is the author of Dave Landry On Swing Trading. STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan spoke with Landry via telephone on December 20, 2001.
"I had a lot of success early on because of the bull market. It took me a few years to undo what I thought I had learned."
How did you get into trading?
In the late 1980s, I started investing in mutual funds. What I used to do was stick charts of mutual funds on the wall. In fact, I had an apartment with a whole wall full of them. But that got boring, so I started looking for something more interesting. I thought I would dabble in stocks. I sold my boat, and got about $1,000 from that. With that money I bought my first stock. The price of the stock dropped about a point and a half in the first week.
That must have been an unpleasant introduction!
My first thought was that I was destroyed; even though the loss was only $150, it was a lot of money at that time. Luckily for me, it didn't stay low for too long, and eventually doubled. You could say that in my early stages of stock trading, I was taking the Peter Lynch approach.
I had a lot of success early on because of the bull market. It took me quite a few years to undo what I had learned, or what I thought I learned, from those early years. Whenever the price of a stock went down, I immediately started reading everything I could get my hands on about technical analysis. So you could say that along with the Peter Lynch approach, I used the William O'Neil approach.
When did you decide to trade stocks full-time?
In 1995, I decided I wanted to be full-time. It was all-consuming at that point. About a year later, I registered as a Commodity Trading Advisor (CTA) and got into commodities for a while, and began comanaging the Cornucopia Fund of Harvest Capital, and I still comanage it today. About four or five years ago, I got heavily back into stocks, and became more of a swing trader, with a more technical focus, as opposed to being fundamentally oriented.
So your focus was more fundamentally oriented before you became a swing trader?
No, I had a technical approach, but I was taking O'Neil's C-A-N-S-L-I-M approach. But once we had a couple of downturns, I quickly changed my mind about fundamental analysis and began to focus more on the technical aspects.
...Continued in the March 2002 issue of Technical Analysis of STOCKS & COMMODITIES
Excerpted from an article originally published in the March 2002 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2002, Technical Analysis, Inc.