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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Street Walker who wrote (1170)	6/21/1998 7:06:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 2120

Street, In my experiences with personal trading, associate traders, traders at other firms, etc., for any true daytrader, the number one mistake they make is taking home stock in any company. In an up market 10 times out of 12 the stock might gap open the following day making for easy 1/4s and 3/8s, yet there is incredible risk for daytraders in taking stock home. By taking stock home, you lose the ability to control risk and risk management is an incredibly important component of trading strategy whether it be intra day, position or even long term investing. As well, when you take home stock, you also are putting your principal in jeopordy, taking a chance that your holding might be subject to bad news, Asia tanking or something even more drastic, a worldly event that brings on some larger loss. When you take home a stock, you have aboslutely no ability to control where it opens in the am, its out of your hands, you are simply putting your faith in the markets, no different that you do each and every day, yet during the day, you can always decide to eliminate the position and with a touch of a button, you are gone with a controlled loss. Many traders who fail suffer similar patterns: that they are good traders, good with executions and seeing the market, but lack sell-side discipline, that 95% of their traders are good trader but some small percent kept them from achieving excellent returns or even subjected them to serious losses. You trade for 1/8s and 1/4s and 1/2s and we all know how difficult it is to do properly, you can't risk a OXHP or some CTN or Brex or a CD , etc. and so forth. Whatever it costs to get back into the trade in the am, consider it insurance. My answer...if you are DAYTRADING, taking capital and leveraging it into a few positions, no diversified, not allocated, then you shouldnt be taking anything home. If you want to ride end of day momentum, no problem, try it, but dont take home positions that are 150% of the account. Just my opinion.... Regards, Steve@yamner.com