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Technology Stocks : DELL- DAYTRADERS ONLY -- Ignore unavailable to you. Want to Upgrade?

To: CRICKET who wrote (13)	6/2/1998 8:33:00 AM
From: Bilow	Read Replies (1) \| Respond to of 36

Hi CRICKET; I took a somewhat informal training at Block in Seattle. Mostly you are going to be on your own. The best feature of the Block office are the low tickets for small sizes. If you SOES into 100 shares, and SOES out, the total (round trip) commission is $4. Commissions for the use of an ECN are higher, and commissions for 1000 shares are typically about $30 round trip, unless you use an ECN that spits out a lot of tickets, in which case it can get expensive. Anyway, the low ticket costs allow you to get your feet wet without sticking your neck out. Another thing I like is the DEMO mode. I used that for a bit over a month before logging in live. The Block office is in the north part of Seattle. The suggestions that you not trade DELL or hold positions overnight are for the same reason: Overtrading. Overtrading means taking on too great a position for your account size. For instance, if you have $50,000 (the suggested account size at Block), then you need to limit your loss on any one trade to no more than 1% or $500. This means that you can take a 1/2 point loss on 1000 shares, or a 5 point loss on 100 shares. The problem with DELL and also with overnight positions is the gap. DELL can rip against you, leaving you unable to get out of a losing position for several dollars. Overnight positions are similar. But overnight positions and DELL are definitely high return ways to trade. DELL always moves a reasonable amount. My suggestion is to limit the size of your positions when holding overnight or trading volatile stocks like DELL. For instance, if you usually trade 1000 shares at a time during the day, you should restrict your overnight positions to 100 shares. One of the guys in the office bought MANU when it sold off the other day. The next day it gapped down another 19 sticks! Fortunately he only had 100 shares. This is a good illustration of the problem with overnight positions. On the other hand, another guy kept 1000 shares of YHOO overnight and made 10 sticks. (Or was that AMZN?) Well here goes! Wish me luck! And strength! -- Carl