Successful Short-Term Trading Strategies for Beginners Message Board

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Strategies & Market Trends : Successful Short-Term Trading Strategies for Beginners

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To: Joe Copia who wrote (3)	8/10/1998 10:37:00 PM
From: Wayners	Read Replies (4) of 78

One way to avoid the greed factor is to select a predetermined profit amount and when that amount is reached take the profit--especially if its in an area of resistance or you see a slowdown in momentum. A rule of thumb I use (for daytrading) is take $300 profit after commissions for every $10,000 you have into the play. If I don't think I can get $300 I'll take as little as $70 to $100. The important thing is DO NOT LOSE--even commissions of just $25 a day adds up quick to over $5,000 a year. How to do this? Only trade stuff that is trading in high volume early on. Use a quote service like quote.com in real time that shows the volume and number of trade leaders from the opening bell. Don't buy gap up unless/until they set new high after 10 a.m. Only enter trades on such breakouts using a buy stop limit approach. Here are two analogies. The first if fishing. Putting a buy stop limit order past the high for the day on a high volume stock is just like putting your bobber in the water. You just sit there watching it until a fish strikes. The greatest momentum occurs on fresh breakouts. Have your worm there ready and waiting. If the stock flounders (good pun) your order doesn't get hit and you lose nothing. The trade should be like stepping out in front of an 18 wheeler on the highway. Your order should get hit hard and fast with enough momentum to throw you a hundred yards before you know what hit you. You should be making money right off the bat. Again, know when to take profits. I traded NSCP twice today and PSIX once today each for the $300 per $10,000 ratio. Could have made more--but its better to make money than push a potential losing position.

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