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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: wily who wrote (7129)	5/3/1999 9:11:00 AM
From: wily	Read Replies (1) \| Respond to of 12617

From a free daily newsletter (Tim Burke) ______________________________________________________________________ DAYTRADING 101 On Friday the markets dove late in the day to the trading curb point and then bounced off, prompting me to think to write this 101. The Trading curbs originally were implemented to kick in on any market move up or down 50 points as a result of computer program buying or selling in effect feeding off itself mainly in diving markets. The intent was to avoid a total market free fall triggered by computers selling into a crashing market without human intervention. The curbs were recently changed to go in effect on any market movement up or down I believe 190 points. My reason for mentioning this today is that some months ago we discovered that once the curbs were triggered, the markets would usually bounce off of them in the opposite direction of the market move which triggered them. Taking Friday for example, the markets were diving, the Dow went to minus 200, curbs were triggered and the Dow moved rapidly back towards the plus side. This is most important to daytraders, but if you are a longer term buyer or shorter of stocks, understanding the curb bounce can often give you the perfect entry or exit point on your retail orders.