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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: ivan solotaroff who wrote (726)	11/1/1997 5:06:00 PM
From: GeneM	Read Replies (1) \| Respond to of 12617

Ivan: I should have explained in a little more detail. As a general rule, I try to avoid NASDAQ stks. because of the Market Maker style of trading; however, if I do decide to play a NASDAQ stk. I am never willing to give up more than a 5% spread. Once I do go long though, I set myself up psychologically to eat the spread, and concentrate solely on the Bid prices. In essence, what I have done is to increase my risk factor by the amount of the spread, thereby bringing my risk to that total amount. In most cases, I have been able to get in with far less than a 5% spread; but, in the case of small cap stks., 5% is the maximum I am willing to give up. If you factor the spread, and possible slippage, into your initial computations, you would never play the NASDAQ; so, once in, I try to ignore it. If I am stopped out, then (naturally) I add it to the equation. It's just a psychological thing for me, like just tracking the BID once I have a position. GeneM