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investment of at least $6000 before you are allowed to hit the trading floor and make your first trade. Obviously, your motivation has got to be pretty strong to hang in for two weeks of daily training plus the substantial costs involved. |
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Like long-term investors who follow the companies they invest in, smart short-term traders need to be aware of the news of the companies they are trading. While the momentum of a stock may be enough for scalpers to focus on, those who are doing swing trades of a few hours or position trades for a few days are basing their decisions on news regarding the stock. They need to be very tuned in to the nuances of the stocks they are trading, hoping to capitalize on the short-term effects of them. |
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When I went back to the trading floor, one thing that hadn't changed was the select group of stocks deemed most popular for trading. Interestingly, many professional day trading scalpers stay away from the very volatile stocks, like CMGI, Inktomi, and JDS Uniphase. They leave these to the ''amateurs" at home (like me), who love these stocks. |
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For example, I sold CMGI a few days ago after holding it for only two weeks. (I say "only" with the long-term investor in mind, who will tell me he or she has food in his refrigerator older than that; conversely, the day trader looks at two weeks as an eternity, and might tell me, "Greenspan could drop dead any daywhy take a chance by holding overnight?"). CMGI had a strong 60-point run-up in that two-week period and was approaching its 52-week high, which it ended up breaking through a few minutes after I sold it. |
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By the end of the session, due to a late sell-off, the stock closed 12 points lower than I had sold it for. I decided a 60 percent gain in two weeks was good enough for me. In addition, the NASDAQ had been on a great run for a month and I felt the pressure was building, that it had to release some steam. My decision looked pretty good, especially when the following day proved to be the day the top blew off so the pressure could escape, and all tech stocks took a thrashing. And then, the day after that, they began their climb to even further highs, with no breather until the first week in January 2000, when finally a bout of heavy selling ruined the party. |
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This stock (CMGI) simply moves too fast for me to consider trying to get a point or two here or there, especially given my not having |
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