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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: TFF who wrote (902)	11/9/1997 4:57:00 PM
From: Lucky	Read Replies (3) of 12617

Please give your thoughts to this. I am basically a position trader in Toronto and trade U.S. exchanges through Datek.It is my belief that it is easier to make short-term gains via shorting than taking a long position.My reasoning is that stocks never go straight up. That there are always stages where a stock succumbs to profit taking on its climb upwards and will make short term declines. I look for a stock that meets the following criteria: -stock is in overall upward trend(over last 4 months) -stock has risen >100% last 4 weeks -stock has risen >50% last 2 days -current volume is higher than usual -RSI >80 Once I have found a stock that meets the above I will watch it closely for the top.The top is usually on or within a day of the highest recent volume.I will short the stock the first afternoon that I see it will not close within 5% of its intraday high(most likely the top) or the first down day after a series of 4 or more up days. In just about every case you can anticipate the top as you watch the upwards momentum slow down and reach resistance as the short-term traders say to themselves "I've made enough money on this play and I'm bailing out".This creates the snowball effect triggering profittaking and some stop-losses.Usually this downwards momentum lasts for only 2-3 days before levelling off and the stock goes into a cosolidation phase.I choose to cover my short once the stock gives back 30% of its gains over the previous 5 days or once the downwards momentum has subsided whichever comes first. Just a couple of final notes: -stock involved in takeovers do not qualify -stocks trading less than 300000 shares on the high days don't qualify -I place a stop-buy at 10% above my short price -I use pcquote to watch the show irby this is a great thread and I value your opinion on this trading method.So far I have used this system for the last few weeks and it has worked well.Granted I've had the advantage of a declining market. I just feel it is easier to predict a stock to go down than one to go up in the short run. P.S. There are many candidates each week and I choose the ones that look to be the most overextended.Quite frankly short positions are one type of play I don't mind taking home each night in todays markets .

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