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: Paul Kim who wrote (594)	2/24/1998 12:06:00 AM
From: Ken Wolff	Read Replies (3) of 2120

Paul, Generally MMs respond to supply and demand and take profits from the difference between the bid and ask (the spred)....I generally have pre-determined expectations on any trade I do and when I see anything unusual like a spred jumping to a wider position or a bid going down on buying I will not trade the stock or EXIT if I am in. I like to identify the "reason" for upticking or downticking as MMs can manipulate the price of a stock artificially. It is their responsibility to keep a fair and uniform spred with the stocks they make a market in. The spred will widen as the average daily volume gets smaller so the MMs can make money providing a market on the stocks they own. They can get inventory on the open market and generally must keep a reserve of shares from which to trade. Who wishes to buy a stock you cannot sell....Not too many ... I try to keep trading as simple as possible and like to approach the stock market like any supply and demand process...... Good Luck Ken www.mtrader.com

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