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Strategies & Market Trends : Want to make $1000 a week trading.....I'm going to try!!! -- Ignore unavailable to you. Want to Upgrade?

To: Jodi Segal-Lankry who wrote (673)	2/7/1998 11:19:00 PM
From: Double Dipper	Respond to of 1100

Jimbo, Many thanks for the repost. I use it many times a day, but for some reason I couldn't remember the URL. Bookmarking has made me lazy. Looks like we have come to a consensus of direction for the thread. LETS DO IT. Good Luck, Good hunting and be careful of the bad guys (MM's) are out there. Kevin

To: Jodi Segal-Lankry who wrote (673)	2/7/1998 11:22:00 PM
From: TraderGreg	Respond to of 1100

< Hopefully you guys will be able to help me out. I will be watching your trades and learning from you.>-Jodi Segal-Lankry Jodi, based on the results of YOUR trading, asking us for help would be like that U.S. carrier group in the Gulf asking Liechenstein for help to take out Saddam Hussein. ROFLOL Nevertheless, let me offer my two cents. I presume that when you say "stop loss" that you are referring to a mental stop rather than an actual stop placed with your broker. It is well known that MMs will drop the bid in a Philly minute to scoop up stops. I put together a little Excel spreadsheet that attempts to address the following question about exit points: A stock runs up. Do you hold, waiting for further runup, or sell all or sell part? (Or a stock runs down, waiting for further weakness) The inputs to the sheet are: the number of shares, purchase price, runup price, projected 2nd runup, and fall back price, if the stock turns down. (Alternatively, you can also enter 1st drop, 2nd drop and rebound price for those issues that are falling). Spend some time picking these points or use a range of values. The spreadsheet computes profitability for various mixes of sell/hold % across perceived runup probabilitities. The PERFECT decision will be SELL or HOLD ALL.. However, individual risk/reward ratios and runup probabilities will produce a wide range of selections. The more you hold, the greater the potential for profits but the guaranteed minimum returns will decline as well. Different individuals will sacrifice some of their Min profit for potentially higher Max profits. As such, they will select different % sell/hold mixes that suit their own comfort levels. The spreadsheet also calculates something I call the Isoprofit Runup Probability (IRP). The IRP corresponds to the runup probability that yields identical expected profits for any mix of selling/holding. Thus, if your perceived(actual) runup probability is higher than the IRP, then you should hold all; otherwise sell all. Again, in practice, you will probably ignore the IRP and choose a sell/hold mix that satisfies your own requirements for safety(Min) while increasing your wishes for wealth(Max). NO MODEL OR PERSON CAN MAKE THIS DECISION FOR YOU. The model is but a guideline to use. If totally in doubt, trash the sheet and sell 50 % and hold 50 %. Historically, though, all stocks tend to pull back after a large runup. The sell all (after the 1st runup) decision should be the tie breaker when in doubt. You won't reap the rewards of the 2nd runup,should it occur, if you sell all. However, you'll most probably get the chance to buy back in after the pullback. On the other hand, if you hold all, and hold too long, you may not have the funds nor the desire to buy more shares after the pull back. If anyone has a web site, or if it can be done in SI, I'll E Mail the file for review. TG

To: Jodi Segal-Lankry who wrote (673)	2/7/1998 11:59:00 PM
From: Cents	Respond to of 1100

I agree with Trader Greg on keeping that stop mental Jodie! Just watch your stuff like a HAWK! Convert to cash or relatively safe stuff if you need a break from the computer. I left the computer to take a quick 2 hour trip to PA last week and found that I had lost $600 by the time I got back! Wasn't worth the trip. As well as you do in the pennies you should find the other stuff a tad boring...I do too. I usually keep about half to 3/4 in small caps with a lot of promise and the rest is split between safe stuff like HL,PKD etc that I think is undervalued and growth tech stocks. Biotechs scare the heck out of me and I usually avoid them completely. I do like that edge though like you do and I get into the options (buying not writing). I am thinking of trading full time as well...maybe within the next 2 months. At any rate if I do reopen a business after completing my liquidation, it will be one which is not locked into a geographic location. Stay cool and objective and you will continue to excel at trading! I wish you all the luck but I know you will MAKE your luck! The jungle is thick but you have the tools and the maps to cut a path through it! All the best in that exciting career. Cents