To: robert miller who wrote (2631 ) 4/15/1999 9:11:00 PM From: michael r potter Read Replies (1) | Respond to
Robert and Tom, thanks for your comments on the analysis. Lest you think, I just pull money out of a hat, ..."just bought at $71 1/4" which did happen, bottom tick on the ask today, lets not forget the buy at yesterdays close at $91 1/4 which was done before the analysis. Stopped it at a loss, and bailed out of the $91 1/4 position early. Other stocks in the account were moving like mad also, and requiring some attention, so I just shut some down, so I could do normal things like shower and take the little one to parent top gym. Decided to be safe rather than sorry. I don't use entered stops much, just mental stops, but today entered stops would have been better, so a break away from the screen could be made. In summary, as always, improvements on many counts possible. Kind of sucked myself into being a day trader today-inadvertently. By the way, day trading is very dangerous long term, because not only do emotions and skills have to be razor sharp, the costs over a years time are enormous. The commissions aren't much but the bid ask spreads [hidden commissions] are daunting added up over a year. For EX. 1000 sh of SFE can be bought or sold for as little as $16 round trip...but when the spread is 3/4 to 1 pt. like it was today, that is $750 to $1000 extra. Try that 200 times a year! A lot of short term traders are deluding themselves that they can win long term, because they have won this past year or two. I propose that is largely because they have been in and out of internet stocks on once in a lifetime runs. This has masked the true costs of day trading. Many are confusing brains with a bull market. More power to them, no jealousy, but many are running up 30% to 50% in trading costs if they figured it like any business [even using only 1/8 to 1/4 spreads]. For only a very few will that work long term and result in reasonable profits above that cost. The higher the frequency of trading, the higher the required skill level to overcome the extra costs-finally to the point of absurdity. Thanks, Mike
