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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: electra who wrote (419)	6/9/1998 11:30:00 PM
From: R Stevens	Read Replies (1) \| Respond to of 1729

Great introduction to a technical indicator: Show me the money flow! By Don Scott, CBS MarketWatch Last Update: 04:51 PM June 09, 1998 NEW YORK (CBS.MW) -- One of the most interesting and potentially profitable ways of trying to identify stocks that are about to move -- up or down -- is by studying the money flow. Is money moving into the stock, or out of it? For some insight on the subject, we spoke with Gregg Schoenleber of Birinyi Associates. The Greenwich, Conn firm, headed by economist Laszlo Birinyi, is well known in the institutional world as an expert in money flow. Every day, Birinyi tracks each tick of every stock on all markets around the world. If a stock trades up 1/8th on 100,000 shares, then the money flow number for that tick is a positive 12,500. If, on the next trade, the stock trades down 1/8th on 100,000 shares that tick is a negative 12,500. If those were the only two trades of the day, the net money flow at the end of the day would be zero and it would be added to the previous day's number. Now suppose that the stock trades up 1/8 on 100,000 shares and down 1/8 on 5,000 shares. If those were the only two trades, the stock would have closed flat on the day and most investors would correctly concluded the stock was moving neither up nor down. But that's not the whole story, is it? Since more stock traded up 1/8 then down 1/8, the money flow would be 12,500 (.125 X 100,000) minus 625 (.125 X 5,000), or a positive 11,875. The money flow number tells you that more money was going into buying the stock than was going into selling the stock, on a tick by tick basis. Money flow indicator "A positive money flow means people are accumulating the stock. And in general, when people start accumulating the stock, the price will move up," said Schoenleber. What makes the technique useful, he said, is that money flow usually starts to turn up before a stock moves up a lot. And conversely, money flow usually starts to move down before a stock moves down a lot. In other words: "Money flow is a leading indicator." But Schoenleber also cautions that they usually like to see about two weeks of positive money flow in a stock where the price is going nowhere before they start building a position. How well does it work? Schoenleber says Birinyi's' U.S. stock picks based on this method are up 41 percent year to date. By way of comparison, the S&P 500 is up just under 15 percent. Over the last two years, the firm's international picks are up 61 percent compared with 19 percent for an appropriate benchmark, the Morgan Stanley EAFE Index. And what about the overall market? Schoenleber says they track that, too, and the money flow continues to look strong despite the sideways action of the market over the last month. So if you're looking for another spot check before you buy, or sell, remember to say: "Show me the money flow." A good chart page to try this out is below...money flow is near the bottom of the indicator choices. cbs.marketwatch.com (article source: cbs.marketwatch.com )

To: electra who wrote (419)	6/10/1998 12:07:00 AM
From: Tim Luke	Read Replies (2) \| Respond to of 1729

These are must reads: The TAO(pronounced dow) of Trading ..by Robert Koppel The Electronic Day Trader " Successful Strategies for On-Line Trading...by Marc Friedertig

To: electra who wrote (419)	6/10/1998 12:30:00 PM
From: Roger Bodine	Read Replies (2) \| Respond to of 1729

Electra... I'll share just a couple of things I do or have done now: 1. I Set an average daily income goal that I felt I could do. The first goal was $100/day (profit), next: $250/day, $500/day and looking down the road to do $1000/day. 2. Pick quality stocks by checking History, Product, Future, SI thread comments positive or not(this helps to give me a feel for the stock). 3. My attitude, probably the most important point. Of course there are lots of other points for consideration. But this was my start. Roger