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Ken,
Just wanted to say how much I love your stock chat-room. I find your style very conservative, very relaxing, professional, and profitable. Keep up the good work!
Now, my question. I know we all try to buy on the bid and sell on the offer, whenever possible, avoiding paying the spread either entering our daytrade, on exit, or on both if we're lucky.
I have noticed, however, than when my offer to buy on the inside bid(or near it) is accepted and my limit order is executed, it usually seems to follow that the stock's next tick is a down-tick. In other words, in order for someone to sell to me that cheap, at least that person (who's obviously been in and watching the stock longer than I have) thinks it's going down, or why else sell to me now?
Same thing when I try to exit by selling at or near the inside "ask." Whoever buys it from me seems to think it's going up, in which case maybe I don't really want to sell at that point in time.
This doesn't happen all the time, of course. Sometimes I beat the spread and it just makes my deal seem better at the end. But all too often I notice that these trades that I get into at really good price tend to start off going against me, and the trades where I get out at what I think is a great price, well...they always seem like they would have done better had I stayed in a bit longer.
I am not so much worried about the exit possibly being too soon. Out is sometimes good enough in itself. I won't be greedy about getting out of any trade.
But I wonder if you think one should be dubious and immediately concerned about any trade where you get in at a really great price, at or near the bid. Seems to me that might be an early warning signal of possibly (likely) impending trouble.
All my best trades, ones with immediate and good movement, the ones that just seem to take-off nicely, seem to occur most often when I just SOES in at the ask and SOES out at the bid. Nice and clean. Whenever I try to get fancy, well, you know. The "wr..." word often comes to mind.
What do you think? This ever crossed your mind, too?
Thanks,
WD |
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