DAYTRADING Fundamentals Message Board

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Strategies & Market Trends : DAYTRADING Fundamentals

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To: Eric P who wrote ()	12/10/1999 12:50:00 PM
From: cloudless	Read Replies (5) of 18137

I did my first intended short sale. I've sold covered calls or written puts (covered by cash) but never intentionally sold stock short. Earlier this week I unintentionally sold short when I tried to make a change to a sell order (ETRADE)and they executed both sell orders. Due to plain luck, I was able to cover that one for a profit. Yesterday I traded Corel buying it (1000) at 41 5/8 and selling at 42 15/16 in the morning. I spent the afternoon watching it. I hesitated to buy it again because I hadn't gotten in at a good entry point and had not waited for a clear signal - instead buying when MACD (12,26,9) was way high - fast over slow - but above 3 and a relative strength over 75. I then violated my (new) rule and held it while it dropped more than what would maintain a 2% or less loss to my equity. I don't think this was smart and I was lucky to be able to recover at a profit. My theory (which may not hold any water) was that the MACD did not dip below 0 and I had decided that if it did I would sell. I think that most likely the correct daytrading method would be to have all these ideas already thought out - I confess I determined this once I was already in the trade. This morning I watched Corel again but had taped the sentence "Don't trade unless you get a solid buy signal" which someone had helpfully mailed me in a PM. Thus, I didn't buy. Then I heard CNBC mention that there had been some analysis done on the stock by a Canadian company and that there didn't seem to be a basis for a stock price much over $9 (that may not have been what was said, but that was what I heard). Sell signals on Level II were blaring. So I shorted at market. I didn't have the guts to short 1000 so I shorted 500. I could not have shorted at a limit price because ETRADE takes about 2 minutes from when you start to place an order until it's in their system and by then I'd be away from the market. I was filled at 34 5/8. I watched Level II and Time and Sales for 10 minutes. I could see lower prices going off on T & S but saw that Level II showed strong support at 28 just outside of the inside bid (8 market makers lined up with buys at 28 while stock was dropping from 28 1/8). I immediately put in a limit at 28 to buy to cover and was filled right away. Within 20 minutes it was back to 30 and is now at 32. I thought about trying to trade again and decided I wasn't able to read the signals as the buy/sell power seemed to be moving back and forth without a discernable (to me) pattern. So I bowed out for the day. I'm printing out all my charts for the week so I can review them all and see what I could have done better (that should keep me busy). I am really happy that I did a couple of things right today. Some of it was luck, but I think some of it was based on reason. Constructive input is appreciated. Cloudless

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