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

To: Eric P who wrote (2325)	1/11/1998 10:22:00 AM
From: TFF	Respond to of 12617

Eric P: In theory you are correct. Realistically speaking there are very few traders who have the psychological fortitude to consistently carry concentrated positons overnight. I believe most traders who would do this would fall into the Gambler Trader category. Traders looking for the excitement of the BIG win. A successful Day Trader does not need BIG wins. He is striving for consistently positive returns. Singles not home runs is the goal of the Day Trader. The Day Trader knows he can wake up the next day and continue to hit singles. The stress associated with carrying concentrated overnight positions is not something most traders can handle on a consistent basis.

To: Eric P who wrote (2325)	1/11/1998 11:15:00 AM
From: Robert Graham	Read Replies (5) \| Respond to of 12617

The higher risk in holding infrequent overnight positions may be warrented. I have a few questions for you. First, I will say that on the surface, what you are saying about holding "high momentum" positions overnight makes sense. First, what do you term as "high momentum" positions? A stock that had not momentum until the last part of the day? Does a stock that demonstrated good upward movement during part of one day mean that the likelihood of that same stock moving up the next morning is greater? Or would you do this only with a stock that has demonstrated a recent interday (not intraday) history of momentum? What if the stock went up dues to recent gains in the general market? What happens if the next day the market retraces part of its gains? Couldn't the stock do likewise? Particularily if it is part of a market index like the DJIA or NASDAQ? Still, if you happen to be several points in profit with a day trade, this may give you the margin for error that you would need for this type of risk taking, right? So maybe the decision to hold has to do with how much of a gain you end up making on a stock before the end of the day. Is this the case? Is this what makes this risk manageable for you? Another question has to do with a trader's relationship to risk. This is where I find it gets interesting to observe. It is one thing to follow your plan for the trade which is what I assume you do. So your plan must allow for the possibility of an overnight trade under very eplicit criteria, or otherwise it would not be considered a plan, right? Can you tell me about that criteria? Now, one last question if you will. To me this is the key question. When would turning a day trade into an intraday trady be considered taking on necissary risk? Here is my thinking on this. I would like you to consider that you are already at what must be a comparatively sizeable profit at this point in time, very liklely at a profit thatis larger than your ordinary successfull day trade. Why would you consider risking this type of profit necissary? Since you must day trade for a living, for how else can you find the time to look closely at your investments, consider that you must depend on your profits from day trading, that unusually large profit which you are placing at risk. What is to prevent you from making the difference up in another trade that very next day if you have a good track record? IMO you must have a good track record in order to be confident in taking this type of risk, a strategy which you personally do not think is normally a good idea to pursue in day trading? I think determining a day trader's relationship to unnecissary risk may reveal much about the trader themselves in their role of trading stock in the markets and their relationship to their money. For if you consider that there are times holding a trade overnight is a necissary undertaking of additional risk, I would be very interested in your thinking behind this. If holding a trade overnight is not considered a necissary risk by you, then why do you do take unnecissary risks with you money that is involved with an activity that already places your money at risk on a daily basis? Because you feel particular overnight traders involves manageable risks? I think you can understand where these questions are coming from. After all, what is day trading but a large part risk management? I think I can benefit from what information you can provide me, for there is something I must not be understanding here. I think it is one of perception. Thankyou. Bob Graham