Momentum Daytrading - Tricks of the Trade Message Board

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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade

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To: Ken Wolff who wrote (456)	2/7/1998 3:09:00 PM
From: Ken Wolff	Read Replies (3) of 2120

NEWS STORY STOCKS (PART VI) RULES FOR TRADING NEWS STORY STOCKS: - I stay away from extremely fast moving stocks initially because the fast movement up is always followed by a fast movement down. YOU CAN LIVE WITH MISSED OPPORTUNITY BUT YOU CAN'T WITH MISSED CAPITAL. - If your order is not filled be sure to cancel it! - DO NOT BUY unless you are sure you will at least CLEAR YOUR SPREAD. - If there are any selling (trades occuring at the BID) at the initial rally price DO NOT BUY. You should see the stock price rise at a nice easy pace. - Set up an MARKET SELL order on your execution software and be ready to execute it as soon as your broker confirms your buy order. - SELL as soon as you see a PAUSE in the upward movement of the stock accompanied with an increase in selling along with trades that occur between the BID and ASK. Unless you want to jeopardize your short-term profits, this is the generally the TOP of the first oscillation. - Watch the sell off because the initial high will usually be the high of the day unless the story is exceptional. REMEMBER: TRADE THE RULE NOT THE EXCEPTION. - A stock will rarely go above 20% on one rally before the sell-off. You can be sure it eventually sell off. BUY THE RUMOR AND SELL THE STORY! - Beware of a stock that gets a story and when you place it on your quote screen it is already up considerably with high volume. Chances are the story has already been released by another news source or you are just getting a repeat of old news. You may want to buy after the first sell off. - Many times, just as much profits can be made AFTER the first sell off on a MOMENTUM STOCK. If I missed the days story, I don't worry. There is still money to be made. I buy any high momentum stock the day after the story hit on the first low of the day, which usually occurs early. This practise is a consistent money maker as these stocks usually continue to see good strength off the low. - Any time you purchase a stock, your target should be at the low of the day. This is the safest way to invest as most stocks will bounce off their lows. I see on a daily basis investors buying at or near the high. They think that new highs are going to be made and invest by HOPE and not by reason. Ken mtrader.com

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