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Microcap & Penny Stocks : Tokyo Joe's Cafe / Societe Anonyme -- Ignore unavailable to you. Want to Upgrade?

To: Trooper who wrote (4276)	6/12/1998 3:22:00 PM
From: Eski	Read Replies (1) \| Respond to of 8798

To: steve goldman (1103 ) From: Ken Wolff Friday, Jun 12 1998 2:55PM ET Reply # of 1105 Hello traders, Internet trading and the rise in internet daytrading chat rooms have created a brand new form of "market manipulation" that you need to be aware of. I have been tracking several "public" daytrading chat rooms where a few "experienced" traders have gained the confidence of the majority of the other traders in the rooms and use this to their benefit. They gain this confidence by constantly posting "winning trades" throughout the day. With these postings they achieve two results; first it makes daytrading look easy and second it creates an impression that a particular trader is constantly making money. A large "following" is created in many different rooms at the same time. Many of these traders comments and "winning trades" are echoed throughout the internet in almost every room. There are a large number of traders who attempt to simply follow these calls. Here is how this scenario can be threatening to your portfolio...... After gaining the respect of the rest of the traders that "follow" their calls, they look for news on fairly low volume stocks and post the news without a time stamp making it appear as a fresh story with possible momentum. At this point, these "experienced" traders will have already entered the trade before hand and then go into several chat rooms simultaneously and PUSH or HYPE the story as a GREAT story, creating their own momentum. Due to the low volume of these stocks they move easily and the "experienced" trader exits with a small profit, leaving the inexperienced trader "holding the bag" as the momentum quickly dries up and the stock turns. You will commonly see phrases with the following: XYZ is gunna go big XYZ is about to uptick XYZ should go up a dollar or more XYZ I am going to hold this one all day XYZ Volume is increasing.....its GUNNA GO!!!!!! XYZ GOOOOOOOOO XYZ .... all aboard!!!!!!!!!!! My staff has been tracking many of these so called winning "buys and sells" and found that many of the results posted were simply not true... the entry and exit points were not only a stretch of the truth, but simply not true. We found that "old news" is constantly being posted and hyped, creating low volume "channel plays". In several cases the wrong symbol was given that was close to the symbol of a stock with actual news and we tracked momentum based on the "experienced traders" call. Unfortunately in most of these cases the vast majority of the traders in the room get left holding the bag. The unfortunate part is, many of these experienced traders DO find legitimate trades and post their findings, buys and sells which only add to their credibility.... Sadly, I have received many many emails from traders who have lost a majority or a huge chunk of their portfolio following these types of calls. There is one simple way to avoid getting fleeced with the flock; DO YOUR OWN HOMEWORK. Know why you are in a trade, know your entry and exit points, BUT DO NOT FOLLOW ANYONE BLINDLY into a trade, no matter what his or her past "record" is. The internet and internet chat rooms are still a great place to gather info, determine market trends, and find the stocks with the greatest momentum but do NOT believe everything you read in these chat rooms. Do NOT blindly follow ANYONE into a trade no matter what their track record is or appears to be. Do your research and make your own decisions, or you will be just another sheep at the bottom of the cliff......... I realize I will take some heat on this posting from those who participate in this type of Hype, so I will answer some of those obvious questions now..... Yes, it is true that I operate a pay chat room and my chat room is susceptible to this type of hype. This is the main reason we investigated and started to follow the "winning calls" in some of the other "public" chat rooms. We implemented a rule that ONLY realtime calls will be allowed in our chat room. After the fact postings of buys and sells will NOT be permitted, nor do we play low volume stocks. If it is not called or discussed realtime then it is not discussed in our room. We teach traders to learn WHY they are in certain trades, not just follow the flock. This posting is NOT meant to be an advertisement for my room. I am not saying you need to be a member of my room to be protected from this hype. You can and should take advantage of every free chat room on the internet and you do not NEED to join a pay chat room. What I am saying simply is, make your OWN decisions, do your OWN homework, generate your OWN trading plan. Follow someone else and you will be one of the many sheep at the bottom of a very steep cliff....... Good Luck Ken www.mtrader.com