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Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?! -- Ignore unavailable to you. Want to Upgrade?

To: SpongeBrain who wrote (260)	1/19/1999 7:42:00 AM
From: Mike McFarland	Read Replies (1) \| Respond to of 611

With regards to scalping...what is the logic behind this trading technique? Since you have to depend on somebody to come in right after you, doesn't this so severely compress the time in which a trade occurs, that there is a risk of amazing gaps downward. I am not sure I am phrasing my question correctly, but a few years ago on the PBS evening news, there was an article about a study done on stock traders. The study worked like this: A group of students were promised a cash reward if they could beat the other traders. I think the game was set up so that it was similar to real world market psycology--you play to win instead of playing to not lose. The stock was fiction, it paid a dividend as if it were drawing oil out of a well that would eventually dry up. The really interesting thing was that the game continued after the well went dry--the players wanted to catch the last dividend, and they all figured they could get out before all the other folks got out. Wrong. Of course in this test everybody knew that the game was going to end...I suppose the folks playing the internet stocks instead believe that these things are good long term investments and don't look at their stocks as merely trading vehicles, but if everybody was using the internet stocks as just trading vehicles, then I wonder if they are exactly the wrong stocks for scalping.