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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: E. Davies who wrote (5351)	11/12/1999 9:01:00 AM
From: Dave O.	Read Replies (1) \| Respond to of 18137

My 2 cents ... I see so many people talk about only the long side. You said "buy on a selling panic and sell on a buying panic". To me, much opportunity is missed by many who never play the short side. Someone else yesterday implied they missed opportunity and are afraid to buy now for fear of a top. I've played the short side exclusively the past 2 weeks, during the run up and done very well. Just find a few very overbought stocks, where volume is tapering a bit and consider the short side. Playing only the long side to me is like playing 50% of a basketball game. And there's plenty of opportunity every day, long and short. Dave

To: E. Davies who wrote (5351)	11/12/1999 11:43:00 AM
From: shasta23	Read Replies (2) \| Respond to of 18137

Thanks Eric and ALAN! Like you said..."cuts way down on Profits" and then you see the stock continuing their ride without you. One of the reasons i cut my positions short lately was the appearance of the daily morning gap. Almost every day there was a gap up or down which felt to make it risky. But maybe that's something we have to live with in the days of extended market hours. Maybe gaps will be become the routing for the folks trading the regular hours. I don't know. And Eric...i will watch the trendlines but the panic part is a little bit more difficult for me because how do you "measure" that. I thought the enormous volume of the NAZ and 5,6 etc days of new high and moves of 10-40% a day in some stocks were a buying panic but nevertheless the market just went higher. The panic is a subjective think and what i call panic might just be business as usual for others. Thanks again. Stefan

To: E. Davies who wrote (5351)	11/20/1999 10:50:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 18137

I have a different view on what you stated in your earlier post about trend lines and buying when panic sets in on price action. For one thing, I never make trade entry and exit decisions based on a trend line. I would use it more as a filter. Price near trend lines in some markets and stocks are notorious for whipsaws and market games others can play like the floor traders and even the market makers themselves. The public really love their trend lines. They are enamoured with them. This is what makes those trades who take this approach fodder for the pro. However, there are exceptions such as the taking of false breakouts and the engineering of an entry for a setup by its trend line. IMO also fading panic is an unnecessary and risky approach to trading that has the potential to burn the trader. Never step in front of a moving train which was likely moving well before the panic set in. And momentum can move price large distances in short periods of time which the short term trader IMO cannot afford to fade. Fading sentiment only works a very small part of the time in an established trend, and the trick is to determine when this will work and when it will not work. Timing is the essential element here, and in my experience, looking to fade price movement driven by panic has never been an ingredient of this type of decision. And it certainly is not necessary. Finally, letting winners ride has nothing to do with "irrational exuberance". It has to do with understanding the market that you trade in, knowing the setups that you trade, and keenly observing the price action that leads into and follows the trigger of the setup, and how price behaves at resistance where it pauses. I also use price targets which I find very helpful. This type of analysis comes down to one of the most important aspects of executing the trade, knowing when and where to move the trailing stop up to as the price progresses, and when to move it aggressively up to price to force an exit. I must take an opportunity here to state as a side note that I am finding that risk is one of the most tenuously understood elements of trading by traders. It behooves one to be cognizant of risk and the different forms it can take both in a market and in a given trade. The example of the scalper comes to mind who scalps for on average 1.5 to 2 point profits yet allows for a 2.5 or 3 point risk in their stop loss. And we are not talking about a catastrophic stop loss because it is hit too frequently by their trades that I witness. Or the SPOO trader who simply does not use any form of stop loss at all. There is calculated and managed risk, and then there is unnecessary risk. Many, and I do mean MANY that I find take on the latter. And the outcome is usually predictable. Just my opinion. Comments welcome as always. Bob Graham