Bob Byrne likes to keep it simple.
In this week’s TheStreet Stocks & Markets Podcast, the veteran trader and TheStreet Pro contributor shared his thoughts with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio, about investing strategy, with a particular focus on navigating a volatile stock market.
💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰
"I am a very, very basic, basic trader," Byrne said. "I don't use a bunch of indicators...it doesn't have to be complicated."
Byrne, who describes himself as a long-term investor and short-term swing trader, If says that if you insist on indicators, he suggests some moving averages, which traders use to smooth out price fluctuations and identify trends in an asset's price activity.
"If you're a short term trader, something like a five- or eight-period simple moving average and a 20- or 21-day," he said.
Investor says 'there's no clarity' in the market
As for longer-term investors, Byrne recalled some advice he had heard: Good things tend to happen above a 200-day moving average and bad things tend to happen under it.
"It's a really simple way to look at things," he explained. "I'm not saying you've got to bail on everything under a 200-day moving average. And I'm not saying buy it above it. But it's a very good litmus test to begin."
More Wall Street Analysts:
Versace asked Byrne how he was navigating the market in the near term.
"If there's not a lot of volatility, I'm not trading it," he said. "In my 20 years of day trading, there were two groups of people. There were the people that traded in the first two hours and maybe the last 90 minutes of the day. They typically made money."
"Then there were the people that traded all day, every day."
When you take that approach, he warned, "you're going to make mistakes."
"You're going to see patterns where patterns don't exist," he said. "I think that's what we are right now in the market as well. When a market compresses back down, there's not a lot of sense to most strategies. If you have a strategy that works in it, you can see it in your own results."
Most people need volatility and price moves, Byrne said.
"I need it," he said. "I think volatility is going to be back in another week or two. I don't know."
"Why that time frame?" Versace asked.
"We've rebounded sharply," Byrne said. "I don't know if we're in a bear market, but we're certainly in a bear pulse, if you will. What's been settled? There's no clarity."