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Strategies & Market Trends : Day Trading Rules -- Ignore unavailable to you. Want to Upgrade?

To: Mikey who wrote (10)	5/2/1998 6:59:00 PM
From: Chris O'Keefe	Read Replies (1) \| Respond to of 40

Mikey, I don't have any answers for you, as I am new to investing as well, but I will say that just about every word you wrote is the way I feel about the market. I've done my little charts where if you started with $2,000 and doubled you'd have $4,000, then if you doubled that you'd have $8,000, etc. If you doubled every month, then sure enough you'd be a millionaire within a year. Your last question is a great one, "What am I missing?" as in "Geez, this looks too simple." About the only thing I can say to that is that I did have a somewhat sobering experience recently. I use Ameritrade and started with an account balance of $2,000 (I think that's the minimum allowed to start an account with Ameritrade). At one point, I had turned it into about $4,400 (I bought NINE at 1.75/share and sold at 4.0625/share). I was really on a high and thought I was a stock market guru like a young Mozart of wall street. Within the next five weeks, however, my $4,400 sunk to about $850! Some guru! Not only did I lose my profits from NINE, but I'd lost more than half of what I originally started with! As I say, it was a very sobering experience. Since then I've gotten back above $2,000 so I feel refreshed and ready for another run at success. But this time, however, I'm much more cautious about this Mozart of wall street delusion. By the way, I got your post over at Tokyo Joe's cafe and as you can see, I'm responding to it here. See you in the millionaire's hall-of-fame--ha ha. Here's hoping, anyway. Chris P.S. I recently bought 11,500 shares of GLCP at 0.17. Folks on that thread are saying that the stock may go to $2/share within a matter of weeks if there is good news next week on FCC approval. I don't know if they are right, because I've heard so many hype statements, but IF they are right, I would have turned $2,000 into over $20,000! It's like pinch me--am I in a dream? Then what if I were to find another five-bagger? $20,000 into $100,000--Could I really do it? On the one hand, these are the dreams that keep me so fascinated in the stock market. On the other hand, maybe I need to get sobered up some more.

To: Mikey who wrote (10)	5/2/1998 9:15:00 PM
From: Wayners	Read Replies (4) \| Respond to of 40

Before you start daytrading with real capital, try doing it on paper first and try some different methodologies. See some of the methods other people are using on S.I. I would strongly suggest that you study technical analysis and ignore fundmamental analysis. Make sure you have a real time charting service that is reliable. That's going to cost about $750 a year or more. It isn't as easy as it looks, especially for beginners. Trading low volume stocks or stocks with wide spreads will kill you. Stick to stocks that trade an average of 2 million shares or more a day. Make sure that the stocks move enough to rip off 1% to 3% pretty regularly. You need to understand and be able to measure volatility. You have to understand what a trend is and what an oscillating pattern is. You need to be able to recognize divergences between price and volume. You need to be able to identify good support and resistance levels. You need discipline to get in and get out at your targets and not change you mind later because you think or hope that the price is going to go further. It takes discipline and sometimes a strong stomach--especially on entry. You need volume to ensure that the tick data you are looking at doesn't have a lot of gaps and holes in it. Those gaps and holes won't tell you where the stock is going. Its like being blind in between. You need lots of trades in front of you so you know minute by minute what the current sentiment is and how it is slowly changing for the stock. Look at stocks like CPQ, ASND, MU and so forth. There's a lot of things that can go wrong. Things like quote services going down, can't get a hold of broker quickly when you need to, slow fills, unexpected news releases or more likely unexpected rumors in the middle of the day and so on that may affect the entire market or your sector. These will have profound influences on your stock price and they are completely out of your control.