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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: JD Writer who wrote (65221)	10/8/1999 2:54:00 AM
From: SMALL FRY	Read Replies (1) \| Respond to of 120523

JD, SELLING - I find this enlightening... borrowed from a site of Pristine. pristine.com Pristine On Selling Selling is largely the most difficult part of the overall investment/ trading equation, and if a market player does not have a firm handle on a few sell guidelines which aid in making proper sell decisions, profits will be hard to keep, if they are ever come by at all. Below, I have listed a few guidelines that will help limit the number of errors which can too easily occur in this most delicate of all trading areas. Rule 1: Consider selling any short term stock recommendation that languishes for 10 consecutive trading days without ever achieving its upside target or violating its downside stop loss. We are in the business of moving in and out quickly (in most cases 2 to 5 trading days), and in order to maintain a certain degree of liquidity, we must eliminate any stock which attempts to tie up our much needed capital. We refer to this as a "time stop," and it is an excellent tool to incorporate into any short term oriented trading program. Tip: In most cases, if a good part of the expected move has not occurred during the first 5 trading days, the chances are good that the stock will be "timed out" or even stopped out. You will find that most of our winning plays do produce a large part of their move in the beginning. This is not to say that one should not go the full distance with each short term stock pick (max. 10 days). I just felt this point was worth being aware of. Rule 2: Consider selling only 1/2 of all stocks that catapult over 25% within 3 trading days. While we are primarily short term traders, as mentioned above, we are intelligent enough to realize the importance of capitalizing on longer term opportunities that offer the chance of truly spectacular price gains. And our studies suggest that those stocks which rocket 25% or more in less than 3 trading days are the ones that will typically go on to be the market's big winners. Tip: We usually sell 1/2 of our position in these quick 25% cases, and keep the remaining half as long as the stock stays above its break even point and/or its 50 Day Moving Average (50 MA). Rule 3: On short term trades, consider always selling 1/2 of your current position whenever you can lock in a $1.50 to $2 profit, even if we state that we're looking for a larger gain. While it is true that many of our stock picks go on to score very large price gains, locking in a part of your profits by selling 1/2 gives the trader an opportunity to profit in two ways. The smaller "trading" profit will undoubtedly satisfy that insatiable urge to take home some bacon for the kids NOW. While letting the remaining half ride will satisfy the natural urge to really go for the gusto, just in case you happened to have purchased a "Pristine Rocket." Tip: This is a strategy that will largely appeal to those who trade in larger lot sizes, but we have found that it can work wonders for those who initially buy as little as 200 shares. Just remember, should you decide to put this strategy into practice, never allow your remaining portion (1/2) to slip back into negative territory. The beauty of this approach is that it is virtually a no lose situation. Locking in the initial profit makes part of the "paper gain" real, while the rest of your money either makes more money, or breaks even at the very worst. This is a very important point. Remember it. Rule 4: Do not lose more than 8% (10% max.) on any stock that is above $15. You will automatically adhered to this rule if our suggested stop losses are strictly administered. The "stop loss" is the the tool that we will always use as insurance against disaster. As a short term trader who utilizes the stop loss, you will frequently experience being stopped out of a stock, only to watch it quickly rise again. Unfortunately, this is a reality we traders must face and learn to live with. Why? Because this scenario is here to stay. When playing stocks over longer time frames, you can afford to give a stock a greater degree of latitude, because time becomes more of a positive factor. However, when you're playing stocks over several days (typically 2-10 days), you cannot be as generous with your risk parameters. This is why The Pristine Day Trader places such a great degree of significance on stops, even if it means occasionally selling our stocks near the low of the day. When you're primarily trying to capture $2.50 to $3 gains per trade, your average loss must obviously be significantly smaller than that. So a tight stop loss, just as those detailed in The Pristine Day Trader, is a must. Tip: At times, we will feel quite strongly that a stock which is about to be stopped out is still an excellent hold over a slightly longer period of time. And if we are willing to extend our holding period a bit, we will decide to sell only 1/2 of our current position at our suggested stop loss. The remaining half will be given a wider risk parameter. This partial sell technique typically accomplishes two things. First of all, it lightens the burden of our loss by exactly 1/2. At that point we are dealing with only a portion of your original problem. And a portion, as you well know, is a lot easier to deal with than the whole. Secondly, it gives the stock an opportunity to come back, as many of our stocks often do. While we don't want to minimize the importance of taking your lumps quickly and moving on, initially selling only 1/2 of a very strong stock on the downside can prove to be a wise choice. Just remember. Everything has its price, and this revised stop loss technique is no exception. Rule 5: Never let a $2.00 gain in any stock turn into a loss. This should be self explanatory. It is hard enough finding issues that go in the desired direction, without allowing those that do to turn into wicked losers. Once you have a $2.00 gain or greater, consider yourself free from the possibility of loss. At that point you can either adhere to rule number 3 above, or even sell it all. But whatever you decide to do, never ever let a $2.00 profit go sour. It's simply not smart, my friends. Hope they don't mind... SF PS: The above is good if you're disciplined enough... I have to admit sometimes I also get caught.. waiting for the reversal that never comes around and I end up losing money instead of gaining... As my profile says: ... and in my quest for big payoffs and riches, I've forsaken moderate gains for the opportunity to sell at a LOSS... I keep violating Rule#5. <LOL>

To: JD Writer who wrote (65221)	10/8/1999 6:22:00 AM
From: lee kramer	Read Replies (1) \| Respond to of 120523

JDWriter: I too started with Schwab, found out the $60 round-turn commission was eating heavily into hard-earned profits. Tried several on-line firms (the only way to find out if they were "user friendly"), finally settled on Datek; low commissions, easy to use. They update your positions, portfolio, acct. value, buying power immediately when you make a trade. And you get a report on a fill within 10-seconds. Also they have something they call a "Streamer"; you can list up to 20 stocks and the real-time streamer changes with every trade in every stock as it occurs. You get the day's high, low, volume, bid-ask, points up or down...for every stock. You'd think every on-line broker would provide what Datek does...but the half-dozen I've tried don't. They require $2,000 to open an account. I should add too that they were most helpful when a mistake on their part occured; they made good the loss I suffered. (Lee)