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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (34763)	12/5/1999 10:58:00 AM
From: Terry Whitman	Read Replies (1) \| Respond to of 99985

Here's a little tale that I think some folks may learn something from: A couple of weeks ago a trader (we'll call him T) bought a gold miner that looked bullish on the charts. T discussed it with his pal (we'll call him M). M became convinced that the stock was going to rally too, and also took a long position at nearly the same price as T. The stock didn't rally right away, and in fact pulled back a little. M and T discussed it- and both decided to hold. T had a much larger position than M, and is a much more experienced trader, but T was telling M of his moves, so he thought that everything would be OK for him. A few days later, a rally started, and the stock moved up to show a good profit. T entered a limit order above market at that point. If someone wanted it badly enough to bid above market on top of a nice rally- T was prepared to sell. M, meanwhile was getting excited, and had dollar signs in his eyeballs. -g- Sure enough- T's stock was bought out from him at the top price of the rally. The stock then turned the next day, and has fallen since- turning M's nice profit into a loss. (He didn't use stops) Lessons to be learned: 1) When people are jumping to buy your stock at any price- get out. 2) Use trailing stops. True story Regards, TW