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Strategies & Market Trends : DAYTRADING Fundamentals
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To: shasta23 who wrote (5347)11/12/1999 2:21:00 AM
From: E. Davies  Read Replies (3) of 18137
 
I too feel the sting of a lot of missed opportunities lately. It has long been a problem that I get in to early and get out too early too. Cuts *way* down on the profits. As of today almost all of my long term positions are above the covered calls I sold against them. Any further runup I wont be participating in.

I wouldn't feel to bad about this one though. The Nasdaq is more frenzied and short term overbought than it has been in a very long time. There is no reason for it either, except that we survived the dreaded October without major crisis.

There is an art to letting winners ride. It takes just enough "irrational exhuberance" to choose to ignore common sense without losing control of your emotions. Here are the two rules I try to make myself stick to:

1) Watch the trendline. Buy at/below the trendline and sell when the stock breaks up out of it. I measure "overbought" by very simple criteria: % above the moving average.

2) Wait for the panic. Buy on a selling panic, sell on a buying panic. When people panic you know someday they will get over it. Its a good way to take advantage of the inefficiency of the market. Trends usually (always?) end in some form of a panic. Thats how you know its over.

Eric
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