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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank
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To: Rose K who wrote (37634)4/30/1999 7:49:00 PM
From: Jenna  Read Replies (2) of 120523
 
Thanks Rose, I was thinking about today and noted that some traders had raked up profits in stock like INSP, RNWK, AMZN and did not sell because of some misguided idea of holding for a much larger profit at the end of some X amount of time. That is not good trading. I know we've all held positions in stocks like NTBK for weeks and longer, but that was when the nets were on a more stable course and the strong uptrend did continue almost unabated. AFter watching AOL and AMZN turn after earnings (pretty easily predicted which is why I went into puts)' and the two days of sever downdrafts we had, we should have taken profits today. Of course positions picked up yesterday that were not yet that profitable like my GNET options I could understand, but not positions like RNWK or INSP.

There was no doubt in my mind that I would have sold INSP right into the morning gap up except that other stocks were surging and there was no great hurry, but it was only a matter of hours. I never would have held through the weekend. By the time the nets sold off I was only in GNET and losing anyhow so I decided to hold. GNET this morning at its high was barely up 3 and not really enough for a good profit. Had GNET been up 10 or more I would have been out.

When I go over the trading today sure there are some things I would have changed. I would have bought MFNX the stock and not the option, because the stock was up over 1 1/2 point and I could have at least made a point for my trouble, the option was only up about 5/8 at the best time of the day and with the spread I'm not sure I would ahve been left with even 3/8.

I was quick into CDNW while other traders were 'bullish' on this and others but not pulling the trigger at all. Actually I knew I never should have sold in the first place so again that was one of the first stocks I tracked this morning.

If you are holding an option especially I'd sell into the morning strength of the gap up if you are up 20 points. As it is I did not sell INSP at the high of the day but shy by about 4 points. If you have the stock I'd do the same thing. Unless you have 200 shares or under that is the best strategy and not holding until the cows come home.. or in this case the bears.

You should move in the direction of the trend, being a contrarian is good but that doesn't mean holding through a profit. Contraian means buying puts when the market is up 230 points or buying calls when the nasdaq is down 50. That is a contrarian. Not losing profits.

I actually could have done a great job had I bought the puts on OEX when I saw DOW begin to tank, I was studying the calls but then left it for some other trade. Getting the calls at the very end was my strategy and time will tell if it was a good one or not.

If you don't pull a trigger at all you are not trading.If you pull it too soon and the stock starts down set a stop, even a mental stop (I set a mental stop on MFNX) but don't hold it for posterity. Lose your 5/8 of a point and forget. Don't nurse losers. I lose a couple of points today on some stocks but you look at the larger picture. You measure the wins against the losses.

Also about daytrading options. It looks easier than it is, but I only daytrade the very top bellwhethers, the others I have to hold a little longer. In fact I don't think I trade more than 2 dozen different options at all. The same ones over and over. As I get familiar with others like NITE or RNWK or CMGI I add them to my list.

But please take profits. How anyone could have left over good profits today is beyond me. I waited so long for ONEM and it went nowhere so I exited.
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