I am currently working on some research where I corrolate NASDAQ stocks that are in a downtrend, and are nearing the critical $5 level.
I was wondering if there are any known theories or trading strategies that use the premise that stocks trading down and near the critical margin level are good shorts fundamentals aside.
I am currently compiling a list of stocks that fit this criteria(these are stocks trading between 5-6 a share), and as my list grows, I have found that over 70% of them become unmarginable. Over the past month, only 22% of those becoming unmarginable have risen past the critical margin level and become marginable again. The rest have either settled between the 4-5 dollar mark, or dwindled even further as volume dried up.
I realize that market factors have their place in this equation, but as simple as it sounds, what I have found so far IMO is a strong foundation for an effective trading method.
Any and all comments are welcome.
By the way 1-Day-Trader, 1 bad trade out of 87 . If this is true, you defy the odds. I too daytrade, and I have seen some of the best in the business, and I have seen days where just making it back to +-0 is a good day. Yes they do make excellenct livings, but it is not uncommon for them to call it a day after getting sucked dry for 50k. The difference is that they care more about what they might lose then how much they are going to win. You will have to understand if I choose not to believe you, especially someone using 50 day averages in daytrading. You didn't specify if the avg is weighted, and by which perameters and for how long. Even with that, what good is it if you are only looking for a nickel here and a dime there. Sorry, something just doesn't jibe.
Dug |
