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 wrote (497)	4/14/2001 4:49:36 AM
From: Apakhabar	Read Replies (2) of 867

Hi Vadym, I have a sense that decimals will mostly affect the huge volume stocks that are trading in the tens of millions of shares daily. There may be enough daytraders who can't work their typical strategies with these stocks that seem to have nothing but penny increments. These traders will migrate to stocks with less daily volume and deeper level 2 visibility. More interesting is Alan's prediction that decimals will be good for swing and technical traders. This might prove true (for these very liquid stocks that no longer are friendly to certain scalpers, who may have distracted swing traders with their jumpiness).... but only to those traders who end up figuring out the new market conditions. I'd be interested to hear what you and Chris have to say about the idea that the life of ALL technical analysis has a life as follows: 1. Testing phase 2. It works very well in the market it tests in, it is publicized, people follow it, and it works even better 3. Following a major directional shift in the market, it no longer works consistently. 4. When the market shifts again, it sometimes works, depending on how much popularity it retains. Basically, I admire the creativity it takes to "invent" a technical indicator or trading system based on such. But I question whether any system can stay consistently successful through varying market conditions. The more experienced I get the more it seems that intuition about when to take a large position and money management are everything. Personally, after almost two years of direct access trading, I think that my money management skills will virtually ensure that my rude method of tape reading will make me a modest living, but for me to "break through" and become an elite trader, I'm going to have to develop a better sense of when (and I'm talking about that perhaps once-a-week opportunity) to increase my position size. Interested in your thoughts.

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