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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Pat Allen who wrote (13131)	12/12/1997 1:25:00 PM
From: Debt Free	Read Replies (1) \| Respond to of 70976

I also see the huge volume on the Fidelity charts. It is interesting to be sure.

To: Pat Allen who wrote (13131)	12/13/1997 1:14:00 AM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

Pat: Are you still day-trading? You are the only person who tried to show how to make money at it. I applaud you for your honest and well-documented effort. You set the parameters at the outset, and posted in real-time. As best as I can tell, you saw a pattern (trading range of 30-35), and tried to exploit it by catching part of the movement as the stock bounced up and down in that range. You never got the entire movement, but caught enough of it to be ahead by 450$ after 4 trades. You were probably feeling fairly confident at that point. Then, the pattern you were depending on abruptly changed. You bought at 33 13/16, and without warning the stock dropped to the mid-20s. A stop-loss order might have saved you, or at least kept your cumulative losses low. As it is, based on today's closing price, you are at minus 1856$ for cumulative returns. I assume you are still holding the stock you bought on 12-9, as you have not posted any sale. A number of people posted comments to my original post about day-trading. Several of them said they had had the same experience as you: a series of small gains, and then a big loss, and no overall gain. Several other people have posted theories about how to make money in short-term trades, but without trying to prove it the way you tried. If I was going to trade short-term (this is entirely theoretical) I would do the following: 1. Commit to doing nothing except eating, sleeping, and sitting at my computer, following my one chosen stock 2. Learn everything there was to know about the stock, and make sure it isn't a stock that moves a lot based on info that only becomes public after a big move. 3. Pick a stock that has a long-established habit of trading within a range for prolonged periods. A boring stock. A stock that doesn't abruptly gain or lose huge amounts without warning. Maybe Chiron, which has been between 18 and 22 since mid-1996. 4. Set my parameters at the outset. Write them down, in detail, put the list of rules beside my computer, and read them every morning. 5. Follow the rules rigidly. This is the only way to keep emotion out of the decisions. If the rules aren't working, after an adequate trial, then change them. But do it consciously and explicitly, not intuitively. 6. Other characteristics of a good trading stock: a narrow spread on the bid-ask, never gaps up or down. 7. never hold through earnings reporting, unless there is zero chance of surprises. 8. Always have stop-loss orders in place just outside what you think is the trading range. 9. Don't be greedy. Go long when the stock gets near the lower end of the range, and always sell as the stock approaches the top of the range. Then, go short, and repeat the process as it goes down. Don't try to squeeze the last half point out of a trade, as you will greatly increase the chance of making nothing. 10. When the stop-loss order is tripped, stay out until the new pattern is very clearly established, even if this means waiting a year or more. Find another stock. Maybe after I no longer have a full-time job, and no kids at home, I'll have the time for this.