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Strategies & Market Trends : MOVING NOW! -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (6820)	12/2/2000 8:34:23 AM
From: lee kramer	Read Replies (2) \| Respond to of 8046

DAY-TRADING: The Highs and the Woes You don't get to the top of the trading game overnight. It takes years of headaches, heartaches, insomnia and an occasional case of locked bowels. But I did it and I'm gonna tell you how you can do it. It involves some pain. My story starts years ago when I told Suzy about my Grand Plan. I was going to quit my day job, the one that pays the mortgage, the orthodontist, the insurance, the taxes and all the other bills. Suzy attentively listened to my plan to stay home and trade on-line. Then she whipped a heavy cast-iron pot at my head. And connected. "But honey" I said holding my throbbing noggin and ignoring the blood running down and ruining my favorite shirt, "Everybody's doing it...trading at home and getting rich. Don't you want us to be rich." I ducked as another pot whizzed by my ear. "But dearest" I cried, "Don't you want me to be home with you all day?" She gave me the LOOK; the one she reserves for the village idiot, turned on her heel and left the kitchen, leaving me reaching for a towel, a handful of aspirin and the determination to begin my new trading career tomorrow. "I'll show her" I said. I bought a top of the line Compaq laptop, cost $2,000. I contracted with MSN for three years to access the internet, cost $720. I ordered fifteen books that promised to teach me how to be a great trader, cost $750. I had everything I needed. I was ready. Wrong. After reading and extensively underling my fifteen books and watching and listening to all the experts and analysts on CNBC for an agonizingly long week I knew I was ready. I got up at 5:00 the next morning, tuned into CNBC, turned on my computer, and listened. I took notes. I waited and watched because I’d read that patience and discipline were Very Important characteristics of good traders. Then I heard Maria excitedly announce in a pre-market report from the Floor, the actual floor of the N.Y. Stock exchange! that she’d heard from a source that Orbital Sciences was about to be taken over. I knew what she meant when she said “source”; an insider…someone in the know. I did my research, because I’d read that it’s very important to do your own research. I learned that Orbital Sciences was losing money, had a negative rate of earnings growth, a negative ROE and paid no dividend. Mmm. This was not good. But gosh darn, they were about to be bought out! That was enough for me. The stock closed the day before at $33. I couldn’t wait for the market to open. I went on-line and placed an order with my broker to buy 1,000 shares of ORB “at the market.” ORB open two points higher! On huge volume. It was gonna happen. I could feel it. My fill came back at $35. A steal. From my reading I knew it was not wise to be greedy. So I’d sell when ORB rose to $39. Hey, $12,000 in a day would be fine. I’d show Suzy. ORB moved up smartly to 36 in the first five minutes of trading. I was up $1,000. Then $37, and I was ahead $2,000. Then it paused a bit. Then it faltered a bit. It fell back to $36. No problem, just a little profit-taking. I’d read all about profit-taking. It was normal to expect some profit-taking. Then it dropped back to $35, where I’d bought it. Then $34. Then $33. Problem. By 10:30 ORB was sinking faster than the Titanic after it met the iceberg… $32, 31 ½, 31. Don’t panic I told myself. I’d read that it was not good to panic. So I wiped my sweaty palms on my shirt, took three Tums, four aspirin and hit myself in the head with a heavy pot. It felt good. Wrapping a towel around my head so the blood wouldn’t ruin my special Trading Shirt I told myself not to panic, to get a grip. I’d read that good traders talk to themselves all the time. I checked the ORB price. It was 29 ½. Where was Maria? Should I buy another thousand shares here? I’d read that good traders often “bought the dip.” ORB had dipped. I bought another 1,000 shares at 29 cutting my average price to $33. Smart move I told myself. Suzy walked in, saw the bloody towel on my head. “Bumped my head” I lied. “Doing any trading?” she asked. “A little” I said. “How’s it going?” she asked. “Great. I’m trading like a pro. Gonna be a great day, you’ll see.” “Mmmm” she said and walked out. I checked ORB’s price. It was still 29. I came up with a new plan. I’d read that good traders revised their plans all the time. What I’d do was sell my 2,000 shares when ORB got back to 33 and break even. Good plan I told myself. I saw Maria back on the Floor. I was certain she’d offer some assurance that the ORB deal was OK. She said that DELL was being upgraded from a buy to an outperform by Prudential. She said that INTEL was being upgraded from a buy to a “strong-buy.” She was excited about AMAZON, YAHOO and PRICELINE. But not a word about my ORB. When ORB hit 25 I sold it. I didn’t panic, merely made a wise decision to put my money to work elsewhere. But where? I remembered Maria’s excitement about AMAZON, YAHOO and PRICELINE. She seemed most excited about PRICELINE. I checked and saw that PCLN (I’d read that good traders know their stock symbols) was trading at 150. I put everything I had into PCLN. I’d read that you never change horses in the middle of the stream. But the horse I was on, ORB, was drowning! By switching into PRICELINE I’d make it all back, and more. Piece a cake. Lee Kramer