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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: KonKilo who wrote (2305)	1/24/1999 12:34:00 PM
From: Rande Is	Read Replies (1) \| Respond to of 57584

Just found out ASTN is a "Westergaard" pick, whoever that is. And that this stock has been featured on their website recently. This is a great example of what I was talking about. They were in first, now they want us to buy their shares at a higher price. And that is how 98 percent of the trading world works. But as I said on the thread header. . .we do things differently around here. When we buy at the bottom, we eliminate a huge amount of risk. Risk is proportionate to the level off the bottom support that you buy. That is why I would not chase NINE or PCNA even though I felt I could make some bucks. . . the downside risk had risen too high. . .and the stock's volatility had risen dramatically. . .which meant that the chance of it ripping downward just after I got in had risen. So after they rose 100 pct, I had the immediate risk of losing half my money on a slow execution. . . the upside was not apparent. On NINE as it turns out, the upside was maybe another 40 percent . . .not worth the risk. On PCNA, hindsight is 20/20. It went up another 400 percent. And that is why momentum trading is gambling. . just like Vegas. And that is why we often pass on momentum trades. Now if one has extraordinary news, like GERN did a while back, then the risk is lessened by the volume of momentum. Everybody HAD to buy into that one, cuz the whole world was talking about it. But nobody was talking about PCNA. . .so it had far higher risk involved. You cannot measure these risk vs. reward ratios with any calculator. You must have a running tally in your head that is continuously updated as the trades tick away. Often, the longer you hesitate the higher the risk. And again, it brings us back to our methods. By predicting the future of a stock. . .we have the advantage of "seeing" the news release before it happens. We buy on the rumor or the vision that we have debated when a stock is silent. And we sell when everyone is buying. And when you buy at 2. . .what difference does it make if you sell at 17.25 or 19.00? But to those without the insight, buying at 18, it makes a big difference. Rande Is