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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: LastShadow who wrote (128)	9/1/1998 11:06:00 AM
From: Roebear	Read Replies (1) \| Respond to of 43080

Last Shadow, My compliments, your reply about daytrading was one of the most concise and "user friendly" comments about it that I have ever read. BTW, great thread also....now, off I go, once more into the fray. Roebear

To: LastShadow who wrote (128)	9/1/1998 12:09:00 PM
From: AlienTech	Respond to of 43080

GNET DOWN 4 on 30k. All the other internet's are going up fast. YHOO UP 7, was down 7 earlier. AMZN comming back from the ML downgrade. Most things UP 20-30%. GNET DOWN????

To: LastShadow who wrote (128)	9/1/1998 1:44:00 PM
From: Poet	Read Replies (1) \| Respond to of 43080

Thanks for the wonderful post on starting to daytrade, Scott! I'm learning many of these lessons right now, and look forward to your digging up anything else you've written in the past on the topic. Poet

To: LastShadow who wrote (128)	9/1/1998 6:29:00 PM
From: Ron McKinnon	Read Replies (2) \| Respond to of 43080

A sample of some of the trading "stuff" sitting in my hard drive I do not remember where I got this so am giving credit to whoever I stole it from TRADING STRATEGIES ú PATIENCE - If there is one thing you must learn, it's patience. Good things come to those who wait, be it low buy prices or high sell prices. Sometimes if you had only waited, you could have sold higher or bought lower. Have patience, it's without a doubt one of the golden keys to making money in the stock market. REVERSE PSYCHOLOGY - If patience if the golden key to trading, then the silver key is doing things opposite from the rest of the market. You want to buy when the average investor is selling and driving the price down. And when wonderful news is driving a stocks price higher, you want to sell your shares at the over inflated price. Buying when stocks are falling and selling when they are moving into higher ground is one of the hardest things to learn [and do] when you first start trading. We don't have the luxury of holding our stocks for years to help iron out the little highs and lows. We live off the little highs and lows. Buy when there is blood in the streets! EMOTIONS - The stock market is very good at playing on your emotions. In order to be a good trader, you must look at the market in a cold, hard way. When the masses are selling in a panic, you must stand fast or step up and buy. Remember that the market is made up of emotional sheep buying and selling in waves - you must be the cold, cunning and calculating wolf looking over the heard for your kill. Don't panic sell and don't buy on hysteria. BID/ASK - If you aren't aware that stocks are sold to you at one price and bought back at a slightly lower price, the difference being the spread, then you may be in for a very big surprise when you go to make your first trade! Trade on stocks with small relative spreads, and spreads that are well controlled (such as on the NYSE board). MARKET ORDERS - Don't use them unless you have to, and DON'T EVER place a market order for a stock at the opening of the market, or when a stock is making new ground fast (such as during a positive mention on CNBC). Putting in a market order in the first 10 minutes of the market is a sure way of paying the highest possible price for your stock, because as all the built up orders from the previous day go through, it lifts the stock prices for a few minutes. You can be pretty sure that you order will go off at the high of the day this way (but keep in mind it's sometimes handy to sell during this time). BUYING LOW - Sometimes the best way to buy low is to put in a limit order for a stock at "a price you'd love to own the stock at". Let's assume for a moment that the stock you want is trading at 20 dollars, try putting in an order at 18 1/2 and wait it out, what do you have to loose? You never know when you might hit the low for the day that way. It's far better than putting your limit order at 19 7/8, only to find it crashed past that, filled your order and continued down to 18 3/8. You'd be surprised what an effective way this can be to both buy and sell. When you get your "dream" price, it's a great feeling. SELLING - Selling is actually harder than buying in many ways. If you are trading a stock, then decide what price you want to sell your stock at as soon as you buy it, so when that price does come along, you'll be ready to move. Using a GTC order ( good till cancel) is also a good way to sell stocks once you own them, since many times a stock will move up for just seconds - not even enough time to get to the phone, let alone place your order. But if it's "on the books" when the stock makes a quick run up, you'll be right there selling it. A good way to calculate your sale price is based on how much you'd like to make for the day. $500, $1000, $5000, etc. Then calculate back the price you need to sell at and stick to it. IF YOU ARE WRONG - then you are wrong. Don't try to justify a bad trade by convincing yourself it will turn into a good trade.. Talking yourself into believing that your mistakes are actually wise moves in disguise is very costly. Be professional enough to spot your mistakes and move on - think of it as day trader insurance. PROFITS AREN'T AS IMPORTANT - as your capital. If you miss out on some profits, that's okay, you can always find another stock to buy. However, if you lose a big chunk of your trading money then the game is over. Protecting your trading capital is your number one mission, followed, of course by increasing it. DON'T GET GREEDY - Greed and fear drive the markets and for the most part drive the average investor to making mistakes. Sell with good profits, but don't get too greedy. A savvy trader once said, "Pigs get fat, hogs get slaughtered". BIG SWINGS - Big moves up are sometimes followed by big moves down and visa versa. Sell on abnormally large moves to the upside and buy on abnormally moves to the down side. They are generally out of character of the stock and can many times be followed by a "snap back" on the stock. Knowing your stock's trading habits can be very helpful. HOT STOCKS - Stocks that are hot move great, but nothing lasts for ever. If you buy a stock for a big, quick gain and find that the stock has "lost its heat", don't allow your money to be dead (unless you are looking for an investment). Sell and move on, don't justify your mistakes - it tends to be a costly justification process in the long run. Others in the stock for the hot ride will start to bail out when as the stock cools off and looks like it's not capable of making "hot moves". JUSTIFICATION IS COSTLY - Don't hold a losing stock to justify your original purchase. If you make an incorrect buy or end up with a stock that is falling when you thought it would climb, handle those mistakes quickly - do not be tolerant of stocks that are costing you time and money - get rid of them! SUDDEN MOVES UP - Be very careful buying stocks that have just made sudden moves up. Many times they are following very closely with sudden profit taking. TIME TO BUY - One of the best times to buy is when a stock is going down on low volume (with no news) as compared to recent increases on higher volume. This suggests that the selling is lighter and that the holders of the stock that are going to sell have finished selling and the rest are holding. The sellers of the stocks then may come back into the market when they see the price stabilize. It's also not a bad idea to sell on high volume on the way up, as this usually creates abnormally high prices that cannot be maintained very long. SIDELINES - Remember, you can't take advantage of market dips if you are already in the market. It's better to be out of the market more for day trading than in the market. This will allow you to get in and out with profits fast and be on the sidelines should dips occur. Try to be out of the market more with your trades and in the market more with you investments (as long as they are good ones). DAILY VOLUME - Do not day trade in thinly traded markets, or on stocks that have very low volume. You may find you can't get out of the market as timely as you think.

To: LastShadow who wrote (128)	9/1/1998 6:34:00 PM
From: Ron McKinnon	Read Replies (1) \| Respond to of 43080

a bit more junk Axioms are fun but useless until you learn them through your own experience No matter where you go... there you are. Doesn't have anything to do with trading, you say? Think again, and think hard. If you are going to trade so that you can run away from your life or yourself, you are still going to find yourself right there next to you when you are trading, living that same old life. Successful or not, you will not be happy, because YOU will still be there. If you need to fix something, then fix it -- don't trade instead. If you want to trade, then trade. If 90% of traders are losing money, and those traders have common beliefs with respect to the mechanics and approaches to trading, then to adopt those common beliefs for yourself is to make the conscious decision to be a loser. Greed will make you poor. If you experience an overwhelming emotional urge to take a trade because you are sure to make a killing this time, then you are experiencing greed. Impatience will make you poor. If you experience an overwhelming emotional urge to take a trade because you are sure that you are missing out on the perfect trading opportunity, then you are experiencing impatience. A small sequence of consecutive winning trades is often all it takes to delude yourself into thinking that you have found a system that is guaranteed to make you rich Never sneer at a losing trader. You are never safe enough from losses of your own to justify that kind of behavior. Learn to trade before you trade. If you lose without understanding why, then how can you avoid future losses? If you win by accident, then how will you create a consistent winning strategy? For new traders, first and foremost, have some system or method to define entry and exit. Eliminate judgement when you start out by having clear-cut rules and exact prices. Don't jump from idea to idea and trade impulsively. In gambling, changing methods is known as "the switches". Your method starts losing, so you switch to another, which immediately starts losing. By switching, you open the door to getting the worst results from each method and none of the good, and the overall result can be much worse than even the worst system followed faithfully. If you think you may be a good intuitive trader, one of the rare individuals who has a natural "feel" for when to act, and if you find it hard to quantify and write rules: test yourself in real-time until you're sure it's real. You've got to know that the next 100 trades will have X% losers. They are inevitable. They're just part of the picture, not a cause for despair. Before entering each trade, visualize it losing, and visualize it winning, because either may happen. Don't root for it like an underdog, just observe it and act accordingly. NOTHING ever makes THIS trade more certain than any other.