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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: DownSouth who wrote (14815)	1/20/1999 9:11:00 AM
From: t2	Respond to of 74651

Downsouth, I have joined the Buy and Hold club as well. No more options. Plan to get a lot of sleep, enjoy life. Thank You MSFT

To: DownSouth who wrote (14815)	1/20/1999 9:13:00 AM
From: Calvin	Read Replies (1) \| Respond to of 74651

This is what the Option Investor Newsletter has to say about it (not my opinion): Options trading is like surfing. Trading, the salesman says, is easy. You just open an account, (board), jump in the market (ocean), catch a wave (stock), buy some calls(surf), and end up safely on the beach (profit). NOT! Most beginning traders think it is this easy. Most end upon the rocks (broke). What we want to teach you is to be a successful trader, not a buy and holder. When you are learning to surf you probably practice on hundreds of smaller waves. Each one moving you only a few yards before you fall and have to start over.Learning how to trade is the same way. You should try to catch many small moves and practice improving your skills before attempting the long run to the beach. I am constantly besieged by email on new people expecting to buy a $3 option and sell it for $15. That would be the equivalent of swimming half a mile off shore, catching a fifty foot wave and surfing all the way to the beach on your first try. It just does not happen. What we have tried to teach people in the past it to take a small profit many times instead of a large profit once. For those that are mathematically challenged let me illustrate.If you start with a $10,000 account and generate a 10% profit every week for a year, WITHOUT COMPOUNDING, after twelve months you would have over $60,000. If you COMPOUND the 10% then you would have over $1,000,000. At just 10% a week! Now before you start firing off those emails I know you can't compound 10% every week. First you may hit some losers now and then but you are also going to hit some bigger winners more often. Just to illustrate. If you bought an option for $5.00 and sold it for $5.50 that is a 10% profit. Now how many times have you bought an option and watched it go up $1-$2 and then slip back down again the next day? More often than not! Now, if you had put in a sell for $6.00 that is a 20% profit and probably would fill the same day. If you did that twice a week, how much would that be a week. CLUE 40% Now if you could get only 10% or $.50 per week compounded over a year it would be over $1,000,000. Is $.50 hard to do over and over and over? Of course not. Is 40% possible? absolutely.The real number is somewhere in between.It is only hard to do if you HOLD and not TRADE. How far are you going to get if you just hold on to your surf board with both hands for dear life? You will be pushed to and fro wherever the ocean (market) takes you. Sometimes you will be pushed to the beach (profit) or onto the rocks (broke)or drift out to sea never to be seen again. (clueless) Now that I have completely lost my train of thought let's get to the point. Every stock ebbs and flows. Remember the 3-5-7 trend cycle from last week? Up three days, down one, up five days, down three, up seven days, down five. Every stock will normally trade in one of these cycles. The trick is to buy the stock on the down side and sell it on the upside. Again, you do not have to be in the market every day. It is better to only be in the market WHEN THERE IS PROFIT TO BE MADE. Everything else is noise. Sometimes expensive noise. Learn to play the trends. Watch a stock for several days. Study the charts. Watch the intraday charts. Learn how it moves.