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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Trader J who wrote (8258)	2/9/1999 2:40:00 AM
From: wwmd	Read Replies (3) \| Respond to of 56535

ALL: Hello all. Another newbie here. Been lurking for about 2 weeks, Signed up on basis of this thread alone. I've been trading for about 13 years, but up to this point always long term. I know NOTHING about day trading, but hope to learn.

To: Trader J who wrote (8258)	2/9/1999 3:58:00 AM
From: Fred Seitel	Respond to of 56535

ASCT - Limit trade: sold @5-15/16 I enjoy this thread, but since I have a day job with no internet access, I plan my trades after the market is closed. As there may be others in my boat, I've decided to post my strategy. Maybe together we'll hone a better one. All my buys and sells are with limit orders. Since I can't follow the trends during the day, daytrading is out. Once I've selected a stock to buy, I look at the intraday charts (1 day and 5 day) to pick an entry price. I usually pick a price below the closing ask. If the stock has not been overly-hyped during that day, it may open higher but often drops below the previous-day's closing ask during the shakeout that seems to occur after 10 a.m. EST. With this approach, my limit buy orders have been filling less than 1/2 the time. But when they do, it improves the chance for a profitable trade. Before I've entered my limit buy order, I also figure out a limit price for the sale. I pick a sale price based on chart action going back as far as 1 year. I look for previous peaks (or multiple peaks) in price and assume that they will be a resistance point. Then I select a limit price below that level. As soon as I have confirmation of the purchase, I enter a good-till-canceled limit order for the sale. Case in point: ASCT. On 26Jan99 it closed 4-1/4 x 4-5/16. I placed a day buy @$4-3/16. The following morning it opened higher and did not fill during any shakeouts. Prior to market close, I checked via telephone, revised my limit order to 4-5/8, and it filled shortly thereafter. I immediately entered a GTC sell @$5-15/16. It filled today during the runnup. I missed the $7-3/4 peak (or corresponding bid), but locked in a profit never-the-less. I picked the value $5-15/16, due to peaks (albeit sloppy ones) at about $6. I avoid whole numbers (like $6) because most people don't; by setting a limit slightly less, my order will fill first and their orders might not fill at all. Of course I'd like to let my investment ride while a stock price rockets, but that would require intraday monitoring to avoid intraday crashes. Sometimes, however, I'm fortunate in a way that I never anticipated. (Sit down, I'm about to say something nice about ETrade.) Let me give you the example: On 29Dec98 I placed a day limit order to buy SLEU at $4.80. It filled at $4.75. I then placed a GTC limit sell @$8-7/8. The next day, SLEU gapped at the open. My order filled at $12-7/8. I was ecstatic. It filled with an extra 4 points on the opening gap. I had no idea that ETrade would work that well to my benefit. So now when I place limit sell orders, I hope for the opening-gap scenario to repeat itself. I reevaluate my positions at night. I monitor posts, hype, volume, news, and chart action. I keep a log as to why I entered a position, and review it. Usually the reason is time sensitive, such as pending press releases about presumed future events. Often the stock price will drop or slide starting with or even prior to issuance of the press release. So I also have an exit plan. I will bail and cut losses at a predetermined target point (-25% to -33% typically). However, I never enter stop loss orders, lest they be taken out during shakeouts. Keeping a log book is important; without out it is too easy to ignore bad investments and ride them down to nothing. Well, I'm not rich yet. I'm still working on my strategy. Any pointers or discussions will be highly welcomed. - Fred

To: Trader J who wrote (8258)	2/9/1999 7:51:00 AM
From: William G. Murray	Read Replies (1) \| Respond to of 56535

TJ, At ASCT's current level, will you still be trading in and out, or is it best to sit tight and hold on. I've been trading in and out and as luck would have it, I was out for yesterday's big move. (P.S. Trying to figure where the money moving out of the techs were going. If we see weakness in the Nasdaq, we may see additional strength in some of the oils. APA & NBL were moving up nicely for several days. May resume shortly. Both have prices tied to weak oil and natural gas prices, but are up 10% + from their recent lows without improvement in product prices. Worth a watch. If anyone is interested, can supply some DD.) (PSS - Currently long NBL, trying to nibble at APA)