Trade What You See, Not What You Think Message Board

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Strategies & Market Trends : Trade What You See, Not What You Think

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To: Threei who started this subject	10/24/2000 6:27:59 PM
From: Threei	Read Replies (3) of 867

IN THE MIDDLE OF THE BATTLE OR IN THE AMBUSH? I often see traders (mostly beginners) thirsty for action. They want to be in the middle of the hottest fight. When some stock is getting superhot, trading way above its usual volume, making huge movements they feel like they haven't participated in market today if they never traded it. It's like they have to report to their friends or family after market that they were active participants in that very issue entire market was focusing on. If they confess they never touched it they look like outsiders or cowards. Does it do any good to trader, especially newer one? In my opinion, no. The more interests are interacting in particular stock the harder it's for reading. Nice and safe winners are often found among "no name stock" that majority never heard about. When this kind of stocks get active it usually happens because some buyer wants shares... and there are not many other interests involved which makes action way easier to read. Trader is better off sitting in the ambush and waiting for the right trade to come than trying to participate in everything that moves. If he feels the need to be where majority is he has to remember that majority loses. If he wants action for action sake, market is not really good choice for this. Many complain that safe profitable trading can be boring sometimes. Well, I prefer to be bored to death by my profits than entertained by losses. Desire to be in the middle of hot battle is more of ego thing than anything else. The same goes for desire to play only big names or expensive stocks vs no name stocks or small ones. 1 point profit on 1000 shares on $15 stock is the same $1000 that 10 points profit on 100 shares on $150 stock. And in my opinion it's much safer and easier on nerves profit. My ego wouldn't suffer if I said I never played EMLX that remarkable day when it made $60-70 swings. Trader needs result, not the action itself. Being in cash 90% of the time, jumping in when opportunity presents itself and going back to waiting is pretty safe way to trade. The less your exposure to market the less your risk to get caught in unexpected turn of events. Risk control and capital preservation is major priority. Opinions?... Vadym RealityTrader.com

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