Dave Landry is a stock-trading educator focusing on technical analysis. He offers a daily trading service with stock picks and money-management ideas at DaveLandry.com. In this episode of Strategic Investor Radio, host Charley Wright interviews Mr. Landry, who disagrees with the notion that “you can’t time the market.” The market can only do three things – it can go up, down, or move sideways – and no matter your approach to trading, you have to capture the trend in order to make a profit.
“There’s a concrete rule” in technical analysis, says Landry: “If the market is going from A to C, it’s going to have to pass through B.” By contrast, there’s no such “hard and fast rule” in fundamental analysis. But Landry says he doesn’t use any technical indicators – other than moving average, occasionally – since all indicators are derived from price, and thus have a lag. Price itself is the signal Landry prefers. Most of Landry’s positions are held for less than a month, but he’ll hold a position indefinitely so long as it’s moving in the right direction.
Landry began his career as a CTA, but these days he’s focused exclusively on stocks. “That’s where the inefficiencies are,” he says. He specifically prefers smaller stocks, since they have greater volatility and can “take off” once they’re more widely discovered.
When asked what keeps him up at night, Landry said he gets nervous when he gets “hot” with his trades. “Three months out of the year, you’re so hot you can’t sleep; three months of the year, you’re so cold you can’t sleep; and six months out of the year, you have to grind it out.”