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Non-Tech : E*Trade (NYSE:ET)
ET 16.51-0.8%Nov 21 9:30 AM EST
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To: James J who wrote (10421)1/4/2000 8:14:00 PM
From: Richard Habib  Read Replies (1) of 13953
 
James, I hesitate to get involved in this discussion but since you mentioned your a newbie I thought I'd make a couple of points. First, I'm a trader - I go short or long and I live on my proceeds so I have some experience. One other point I follow 2000 stocks daily using software looking for trading opportunities. There are two statistical points that become evident if you look at a large sample of trades. First, if you trade frequently, your rate of successful trades approaches 50%. No system predicts the future, so probabilities approach random probabilities. You make money by using good money management techniques, specifically cutting your losers quickly. Second, in a bull market, a system that incorporates short trading returns substantially less than a system that doesn't incorporate short trading.

The conclusion you might want to consider is that it's pretty unlikely from a statistical basis for a day trader to make a steady income. Most slip into position trading when a day trade goes bad. And most slip into trading long the vast majority of the time.

One last comment. Our resident short seller is obviously quite inexperienced based on both his comments and his trading strategy. He's playing the noise in the stock rather than any statistically valid trend. That in itself is a poor strategy for consistent trading. Rich
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