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

To: KymarFye who wrote (12114)	3/1/2001 7:02:13 PM
From: Mark Davis	Read Replies (2) \| Respond to of 18137

If I may answer and ask a question at the same time. Buying or selling 'basket' of stocks is a popular method of playing the market. It smoothes out performance so that you are pegged more to the market as a whole instead of a few stocks, which may not cooperate. Now that there are QQQ's and SPY's that are quite liquid, what is the justification for trading a dozen or more stocks ? Unless you are able to hand pick the strongest and weakest stocks consistently, its a lot of trouble, and extra commissions (unless you trade flat fee per share).

To: KymarFye who wrote (12114)	3/1/2001 7:36:03 PM
From: TheStockStalker	Read Replies (3) \| Respond to of 18137

I'd be very interested in knowing what methodology allows you to trade 50 - 100 at once Basically I come into the day with some sort of bias or try to get a bias from what I see in the market. Then once that bias is in place I will buy the stocks making new highs (intraday) or short the ones making new lows. The object is to build a portfolio of the strongest or weakest stocks and have it in place for the big move. I do not put on things with a basket though I frequently exit as a basket. Rather, I put them on one by one. The positions are sorted on my blotter by the amount that they have retraced from there highs or lows. I only focus on my weakest positions and pretty much ignore what is working well. I close the ones that are breaking down with a kind of discretionary mental trailing stop method and put on new ones just as quickly as I am closing those. The software I use was developed by my firm to facilitate the automatic sorting of the positions by the manner in which I describe. I am not allowed to go into details on the software or the firm. The beauty of doing this is that every time you see some stock make some extraordinary move in the same general direction of the market, I am usually in it already. Many times I will not even know if I am in it because I am only focusing on my losers and letting the winners run. I realize that it takes allot of capital to trade this strategy and that it would not be possible for most retail traders. But that is the one major advantage of trading capital from a firm versus trading one's own. What is really amazing is that I used to struggle to put on 1 to 4 winners at a time and spent so much time "managing" the positions. Now I suddenly can put many postions and have them in the money. I think the lesson for me was that one should not look at the level 2 so much (unless scalping) and go find another winner after you put on a stock. I will say that Feb was a tough month for trying this due to the many reversals we have had in the trading day. PDT