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: Jack Chen who wrote (1612)	10/18/1998 6:12:00 PM
From: Ken Wolff	Read Replies (1) of 2120

Hey Gang, Here is something I am trying to teach the traders in my room.... Here is my thought process in the first few minutes of trading.. Good Luck Ken www.mtrader.com 1. In the first minute of the market open I quickly scan down the volume column and pick out the most heavily traded stocks. (For example in the most recent weeks I have found that the Internets stocks and Technology remain to be the most active) What a trader is attempting to do is locate the "momentum" and where it is at... 2. Next I will apply the volume to the stocks as they relate to the "group" ... (For example I will note the volume and see if the stocks with the largest amount of volume is with "first day gainers with big NEWS" , which should have the freshest and best momentum. Or maybe the "first day dumper" or "gainers 2nd day that remain very active as we have seen with the Internet sector, YHOO, AMZN and also DELL computer.) 3. I am in essence finding the best momentum in the stock market by quickly scanning the volume the first 1 or 2 minutes of the market open and relating it to a group and applying it to what I would be expecting remembering the recent activity (historical implication) in the last few days and weeks and even months of trading... I am fortunate in that I can also remember years... 4. A trader must relate the information to the market as the market demeanor will add or subtract momentum... Remember it is a matter of "VALUE" and "SELLING PRESSURE" ... (For example a negative market that is causing the best momentum stocks to gap Down will likely climb very near the open because "VALUE" and opportunity is created by the market demeanor. And a big gap up will do the opposite in that "SELLING PRESSURE" will be created at the open , especially in a nervous market where as a running strong market can very well get bought at the open and these gappers up can climb more than anticipated... 5. The idea behind successfully trading a market that may not be known is to find the best and heaviest traded momentum stocks and noting : Selling at the open or running, the amount of pulllbacks and first bottom strength at which time you can then begin to look at other "similar trades" and begin to trade the stocks that are lagging a bit..... Some trades will be straight forward determined by the current pattern of "usual" behavior such as dumpers that are down over 20% and come off the first bottom 90% of the time (those I will wish to trade first while I look at the pullbacks on the gainers to find the lagging gainer trades).... The market always over-reacts and that is the principle of what I do and the process of finding the stocks that are over bought or over sold.....

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