Full Q&A With Investors and Traders on Twitter

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Q&A with Frank (stockguy22):

Name: Frank
Twitter Alias: stockguy22
Blog: work in progress
Followers: 1,499

Frank is retired and trades full-time. On Twitter he is stockguy22, keep up with his updates and give him a tweet if you have any questions. He's always up for helping other traders. Her'es his full Q&A.

Q: Tell us a little about your background in investing.Any professional experience? What got you started? How long have you been trading? etc.

A: I learned trading on my own through books, courses and learning from my mistakes from actual trading.

I first started when I was still in college in 1985. I bought Microsoft (MSFT) for $1,000. I was in a business program and thought computers should be a growing market in the future.

I sold the same $1,000 batch of MSFT in 1994 for over $138,000. Microsoft had basically doubled and split almost every year. First big break I had and really learned how Compounding can actually work in the real world. I really did not make serious money till the last 3 years of holding MSFT. At the time buy and hold actually worked unlike the past 7 years.

Q: What instruments do you mainly invest in?

A: I mainly invest in stocks (on both the CDN and US markets) as well as some ETFs (oil) and options (calls & puts). I have traded the markets both long and short. I began shorting successfully for the first time in the summer of 2000 when the dotcom bubble burst.

I kept going against the market trying to catch the bottom and losing more and more until a friend who was shorting convinced me to short along with him. We did very well for the remainder of 2000.

Q: How do you identify which stocks you want to buy?

A: I look for momentum stocks for my intraday and swing trading. I look for stocks that are the percentage gainers/losers for the day/week/month as shorter term trades.

For my long term positions I have stocks that I buy/hold longer term only after I have done some fundamental analysis.

The area of investing which I've added to longer term for my retirement accounts are Health related stocks. I feel with the aging population that the health sector will be one of the largest growing sectors. (i.e. medications, hospitals, hip replacements, stretchers, hospital beds, senior homes etc.) will all be in more demand with the baby boomers getting older.

Q: How long do you normally hold your stocks?

A: I usually hold my stocks intraday for scalp plays or short term (overnight or 1-2 weeks at max). I also have some mid-term positions that I'm holding (6 months-2 years).

My long term retirement positions are mostly healthcare related and/or only stocks that provide good dividends to offset any volatility in this market.

Q: When do you take losses and profits?

A: I set my initial stop loss that I plan to take on a stock and stick with that. For example on swing trades no more then 3-5% since I try to buy at or near support levels and if that level breaks then I exit the position and try to re-enter at a later point. I think taking losses is something that a successful trader has to learn and live with.

Similarly, I'll take profits into levels of resistance levels on stocks and I have learned to accept if I sell too soon and the stock continues higher. Sometimes what I do is only sell 1/3 to 1/2 of a position if we are in a momentum market like we've seen in the past 2 months (March - April 2009).

I don't try to find the bottom or top on any stock, but I use Fibonacci retracement levels to identify levels of profit taking and stop losses for my intraday and swing trades.

Q: How do you hedge against risk (options, stop loss, etc).

A: I use options as a great hedge against risk.

As an example, recently I traded a lot of shares of Satyam (SAY) and made some great profits trading it intraday and swing trading it on volatility.

At the time, I had a larger than normal position on Satyam. So I bought the puts as a hedge. Subsequently, the stock had some accounting fraud and gapped down on Jan 12, 2009. The stock eventually collapsed from over $9 to .78 cents.

Instead of losing over $80k on this one trade the options actually covered my loss and I made approximately $4k.

I currently use straddles during earnings season. For example on RIMM I bought the puts/calls prior to earnings release. The stock gapped up over 23% so I lost on the puts but made a profit on the calls. In this case I lost approx $8k on the puts but made over $44k profit on the calls.

So I find options is a must learn for all traders since it can be a life saver for large positions as with SAY or great around earnings.

Q: How do you use Twitter each day for trading?

A: I find it very helpful in terms of receiving real time advice and giving real time advice
to other traders.

Traders can even post charts and links in real-time to help each other out.

I post my buys/sells to help some of the new traders out. I also post my profits and losses.
Recently, my biggest profit was on Dendreon (DNDN), which earned me over $117k on an overnight trade.

I actually found the DNDN trade posted by someone on Twitter. Then during the day, I saw unusual volume on no news, which made me think that something was happening with DNDN.

The next day they had the cancer news that made it go up over 200%+ so for me Twitter is a priceless resource.

Q: What Twitter widgets, applications, tools and services do you like using?

A: I currently use TweetDeck and also the web version of Stocktwits. I have the "my portfolio" tab running in the background on Stocktwits along with other people that I'm following. On my iPhone I use Tweetie and Twitterrific.

Q: If you could name a few, who would you recommend our readers to follow on Twitter?

A: Appleinvestor, alphatrends, upsidetrader and AndySwan would be the top 4 people who I've found to be helpful on Stocktwits.com and Twitter.com and that have good helpful posts each day.

I like to follow people who post charts and recommendations that I can check. Not someone that just posts profits and never posted an entry for that position.

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