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Strategies & Market Trends : TATRADER GIZZARD STUDY--Stocks 12.00 or Less..... -- Ignore unavailable to you. Want to Upgrade?

To: TATRADER who wrote (1802)	7/26/1998 12:27:00 AM
From: Rashid Garuba	Read Replies (4) \| Respond to of 59879

Mark, In a prior post you mentioned concentrating on stocks below $12. Thus my subsequent post on the price issue. I think basing the decision of which price range to buy on anything other than statistical data is unwise. Per O'neill the $28 area may be the sweet spot of the market. As a compromise, I think a $1 to $30 range is ideal (personally I would stay above $5). I mean PSIX next week at $16.50 will be yummy right?? Also, less expensive stocks tend to "suprise" more. Like the FSFT suprise. Additionally the cheaper they are, the less they respond to TA. The probability of a $15 stock moving to $20 on heavy volume, and then opening the next day at $16 are reduced, especially with a close at the high. Also look at QLGC and AMTD. As you said there is an obsession with the number of shares one can buy or "points" a stock goes up. We must learn to think completely in PERCENTAGES. As long as you have enough money to buy 250 shares of a stock you should trade it if it is moving well. At $15 commission this works out to .06c/share. According to Cooper, this is the threshold that allows profitability. MSPG gained $44 last week. You know what "only" 250 shares of that would have done. One of my best trades ever was OCCF (yes that one) at $40 in 1996. I began this year with $4k. Due to cheap stocks I was at $600 on February (yes $600). The best thing I ever did was move upmarket. I don't think anyone, including myself will beleive the results ever since (up 13,000% from that low point). The recent FNTN trip was a clear reminder of the risks of low priced issues. I am rambling. Another rule I have been using effectively since the February debacle is once you are stopped out of stock and it starts declining, only get back in if it is able to make new highs that day. My neglect of this cost me in PSIX Friday. Why in the world was I doing getting back in it at $20?. I also didn't behave like my usual self (Rabbit Rashid) as it drifted lower. A market maker poisoned my breakfast that morning!! I also never go long anything that's red. I'm just no good at "intraday bottom fishing" Also, when a stock breaks down though a supposed "support", it will get to the next one before attempting a recovery. As PSIX penetrated it's prior day high, the mid $18.5 area (where it spent all Thursday afternoon) was the obvious destination. It is all so clear now. It is hard enough finding good longs in a declining market. To then trade them poorly is almost criminal. As I said, drugs at work. Back to work I go. Best Rashid

To: TATRADER who wrote (1802)	7/26/1998 1:18:00 PM
From: Pullin-GS	Read Replies (1) \| Respond to of 59879

I lost the lottery all the times I play....but of all the times I played low priced stocks (my comfort range starts at +$5 90% of the time) I win > 50% (currently about 70-75% hit rate for the year) of the time.... I read that article Mark. Lots of good basic information for the new investor. However it would appear that some of this week's IBD "26 Weeks to Investment Success" would not apply to an experienced trader or investor such as yourself and others on this thread. I must admit that the above 50%+ hit rate is for quick in and out trades, where the stock ends up lower in the long run. And I often play these little sub-$15 dollar stocks short as well. Someone ends up holding the bag. It used to be me on many occasions while I was learning early on. One thing that stuck out was the statement that suggests if you dont learn a system of discipline and stick with it early on it will be more difficult to adjust at a later date. This is so very true. I am still struggling. Regards....