Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ken Wolff who wrote (1387)	8/6/1998 10:55:00 PM
From: Ken Wolff	Read Replies (2) \| Respond to of 2120

Here is a discussion we had in the room today that you may find interesting.... [12:52] <member> Woogie-volume is one of the elements you look for in a stock as a Day Trader, a few questions: 1) generally, how much volume does a stock need in the first 1/2 hour to qualify for your alert, 2) how much volume is too much, 3) how much volume is too little? Thanks in advance. [12:53] <WOOGIE> good question.. [12:53] <WOOGIE> 1. Market is slow : if the average volume is about 50K per each 10 minutes then you consider the average and compare with your trade consideration.. [12:54] <WOOGIE> 2. Market is fast: if the average volume is about 75K per each 10 minutes then you consider the average and compare with your trade.. [12:54] <WOOGIE> I like to see an open volume over 50K in the first 5 minutes.. [12:55] <WOOGIE> I like to see approx. 200K after the first 15 minutes.. [12:55] <WOOGIE> after 1/2 hour the trade should be over 500K.. [12:55] <WOOGIE> that is a good volume stock... [12:55] <WOOGIE> on an average day in a Bull market.. [12:56] <WOOGIE> I would cut those numbers by about 30% today.. [12:56] <WOOGIE> tomorrow I bet we will cut those numbers by 50%.. [12:57] <WOOGIE> right now look at our trades: JRJR (it was low volume from the beginning with a wide spread and unpredictable direction, 488K) [12:57] <WOOGIE> TKLc was acceptable volume with good action: 1.3M [12:57] <WOOGIE> SEEK, NSCP, TALK . all over 1M shares.. [12:57] <WOOGIE> NSCP has 3.8M [12:58] <WOOGIE> something very interesting: [12:58] <WOOGIE> Now look at WFMI , volume 1.2M [12:58] <WOOGIE> now compare the action on WFMI with SEEK [12:59] <WOOGIE> SEE has a reasonable spread at about 1/16 to 1/8, [12:59] <WOOGIE> SEE=SEEK [12:59] <WOOGIE> WFMI changes spreads to 3/4 very easily... [12:59] <WOOGIE> so what is the difference???? [12:59] <WOOGIE> why would one high volume stock change and another remain fairly consistent.. [13:00] <WOOGIE> Market Makers.. [13:00] <WOOGIE> and also average daily volume.. [13:00] <WOOGIE> that is why PACE and spread action is important to picking trades... [13:01] <WOOGIE> Next question?? [13:01] <member> This "summer" market has been consistantly inconsistant.. Do markets change with the season? Couple of weeks ago you summarized which caps get action in different markets... can you explain again? (lately it seems large caps are getting more action) [13:02] <WOOGIE> very true.. we continually get money managers and individuals in a stock picking frenzy in an attempt to "anticipate" market direction... [13:03] <WOOGIE> they will flitter from techs, to large cap dow, to S&P 500, from sector to sector... [13:03] <WOOGIE> Oils will be hot one day then banking the next.. [13:03] <WOOGIE> that is the action that causes a frothy market as the pressure is on everyone to keep ahead of the market.. [13:04] <WOOGIE> that is the reason daytraders can make so much money... [13:04] <WOOGIE> the market is the Grey Whale trying to move ahead and change direction while we are the sharks darting in and out picking off the "action" [13:05] <WOOGIE> that is the challenge, in a changing market, we face daily.. picking the indicators (which direction the whale is headed) and acting accordingly... [13:06] <WOOGIE> If you don't know which way the whale is going.. then stay out.. [13:06] <WOOGIE> reading the future is an effort best left to the crystal ball... [13:06] <WOOGIE> reading the "NOW" is a job for patient smart traders... [13:07] <WOOGIE> reading the "past" is a job best left to analysts... [13:07] <WOOGIE> next question?? [13:07] <member> I am a trail this week, noticed you don't do NYSE stocks, is this normal for you? [13:08] <WOOGIE> I have traded NYSE stocks and I can do it anytime I like... the problems are: [13:08] <WOOGIE> Using superdot you can have direct accesss to a trading post.. [13:08] <WOOGIE> BUT the guy at the trading post must CALL out you order and so that means there can be a delay.. [13:09] <WOOGIE> and if a stock gets very volatile I do not want some guy calling out my order with a hoarse voice that cannot be heard ... [13:09] <WOOGIE> I am oversimplifying to make a point.. [13:10] <WOOGIE> but we will eventually move to more stocks as we progress as a trading room... [13:10] <WOOGIE> first things first.. [13:11] <WOOGIE> I like ISLD executions that take place in a few seconds.. [13:11] <WOOGIE> with confirmation.. [13:11] <WOOGIE> and the percentage swings in comparison give the nasdaq trader much more potential... [13:12] <WOOGIE> you MUST have that as a small fry trader... [13:12] <WOOGIE> If your port is about 100K then NYSE is fair game.. [13:12] <WOOGIE> In my opinion.. Good Luck Ken www.mtrader.com