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Strategies & Market Trends : Daytrading Psychology -- Ignore unavailable to you. Want to Upgrade?

To: inchingup who wrote (46)	12/2/2000 10:39:41 AM
From: Ken W	Respond to of 104

Good Morning Gary Here, Here!! on your comments. Just as an aside to our discussion. I've noticed that many small retail traders are reluctant of shorting a stock as one of their trading tools. Shorting a stock is no different than trading a long position, just in the opposite direction, borrowing the stock from your brokerage, to be returned to their inventory when the position is "covered" (bought back) thus closing the position. In a short sell trade I place a "buy stop" above my sell price to protect against lose and move it down to protect profit. Have not we all noticed that, presently, stocks tend to go down faster than they go up? <GGGGG> Case in point: I've traded DELL from 23 to 24 several times in the last 30 days. When it broke under 23 this past week and held under 23..I short sold it at 22, covering at 21 then again at 19 from a short sell of 20. DELL is now beginning to show some support at just over 18. Now it may become a long trade from 18 to 19, as happened on Fri. The "buy stop" above on a short sell de bunks the myth that your loss is unlimited. If there is a gap up on the stock above your buy stop then it becomes a market order and you close out....exactly as a long position would do on a gap down under your "sell stop" Ken