Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Joe NYC who wrote (107422)	4/23/2000 7:45:00 AM
From: Bill Jackson	Read Replies (1) of 1577464

Josef, With ten million(?) people on line watching a stock that trades, say 4 trades per minute, you suddenly execute 20 trades in 15 seconds and there is a slight uptick (depending what was in the bid ask array.....keep it to a small rise), these people with their monitoring programs will pick up on this and then decide to buy thus making a slightly bigger uptick and more sales and you sell into this. This is a feedback mechanism and it depends on the number of watchers in close to real time who react to the nidge. It is an anlog to hysteresis in EM circuits where the path in upwards involving price upticks and volume differs from that downwards and the loss in that system is your profit. How do you damp this out? some way would need to be found. One might say that the sea of daytraders does this now in certain high volume stocks. Notification loops tell members of certain groups that stock "A" will be hot this AM and the groupies buy...of course it could all be a trick by some group leaders?? That is what I call the internet lemming effect...to the sea. True, stop loss orders can fail if there are no buyers. Bill

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