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*** Trading Tip ***   --- ** Attention new traders and trials ** Welcome aboard!! ** To better understand what goes on here I strongly suggest you check out the two stories on the site in the link here: DTM: Decisive Trade Management & Trading Stops and Trading Tips http://traderaide.com/index

*** Trading Tip *** We certainly encourage all new members to jump right in and get involved in the desk as far as posting. However we do caution new members that it may be wise to take it slow on trading until you get a feel for how things work. Of course that will be relative to how experienced you are. Keep in mind that folks are busy (especially at the open) and they do not always answer questions or replay immediately to questions. If you ask a question and someone feels they have the answer, they will reply. If you don�t get an answer, that simply means everyone is busy or no one feels they had the answer. It does not mean you are being ignored. As a rule, a bunch of folks are not going to post they don�t know

*** Trading Tip *** For the most part, I put the symbols out there with what I think the stock is going to do, short for down, long for up. The price is only a guideline. Remember it is only rarely that you are going to be able to get in at that price. For the most part, I'm trying to steer you to what I believe is a good play, not trying to micro manage that trade for you. On some I give a bit of play-by-play but only to give you some idea as to how I think and maybe tip off what I think is the way to play the stock�.   Example��

If I call Buy MYL at 10.00 the important information is the symbol and the Buy. I'm basically telling you that my best estimate is that the stock is going to move up from where it is. From that point forward, you have to use your own judgment as to where or even if you enter the trade. But as Doug said earlier, about 70% of them do what I think they are going to do. Exactly when or for how long, I cannot tell you. For the most part, I think it is going to happen right then and there, but there are too many variables for that to happen every single time. You need to have the best trading tools in the biz and let them tell you that�.imho.

*** Trading Tip *** Half Lot/High Risk theory --Let me explain my thinking here. As you have heard me say in the past, the trading range in most stocks, and the markets in general, are not what they used to be back when Stochastic and other trading tools were developed. We often get radical, quick turns that defy the charts. But there are certain indications that I can fairly well predict on "some" stocks. What I have been doing is trying to widen that trading range buy calling a Half Lot/Higher Risk play, anticipating the bounce or turn. The idea is we may be a bit in front of the play. If that happens, you add to your position with the other half lost or cut and run on tight stops. Which way you choose to go is up to you. Of course, this all will work better for you if you have the right trading tools including the Stochastic set up and Level2. If you do not have those tools, it makes the play even more risky because you cannot see when to cut and run or add as easily.

*** Trading Tip *** Early morning trading (Pre-Market) lacks liquidity and often gives us the highs for the day. If you trade in pre-market, you should be aware of that fact and as a general rule, do not carry it over to the regular hours of trading. It is also recommended that during the pre-market and for the first hour of trading in regular hours, you use half your normal lots and stand ready to cut and run on tight stops or average on the trade if you have the confidence that you can get out better that way. Early morning trading is often influenced by Market on Open orders that were placed the day before and then left to be executed, buy or sell, with no regard to what the markets are going to do. This can sometimes cause an artificial move at the open, either in an individual stock or the markets, in general, that will not be representative of the day's action on some.

*** Trading Tip *** When I say a stock is in the money, I am referring to what I consider a reasonable profit on the call, depending on the type of call. On a Scalp I consider "In The Money" .125. (See Scalp Trading Tip also this page) On a non-scalp play, I consider the play "In The Money" when it gets to .25 above the call price.

*** Trading Tip *** Please avoid using terms like "fire" or "running" or "going to the moon" or other such comments that suggest that traders should do anything in a hurry. All too often the move is over with by the time the post hits the room and gets the trader in at the top as the stock is about to fall. It also causes mistakes when one thinks they have to rush to make a trade. Remember, missed money is much better than lost money.

*** Trading Tip *** Not all the "plays" come in the form of one of the Trading/Scalp Alerts. The Research, Analyst, Earnings Alerts may be of interest to you as well. Sometimes I post a comment under Floyd, such as: "XYZ stock may try to move here�round number concerns", or something like that. If you are looking for something to trade you may want to take look at these "no-trading" Alerts and statements and see if they are of interest to you. When I was trading the room before I started working for Ray, I looked for symbols, not caring what was attached to them. If I was looking for a play, I checked out everything. Of course, you have to have the right tools to do that.

*** Trading Tip *** A Trading Alert with no Buy or Short indicated, sans a price, means that I saw something that suggests to me that it "may" be of interest for a possible trade. It's for you to take a look at if you want to and make up your mind if it's of interest to you. It could be a Short or a Long.

*** Trading Tip *** Earnings themselves in regard to the Beat, Missed or reported In Line, has little bearing on how the stock will perform short term. In most cases. "Going forward" statements, visibility, revenue numbers and other such things all have to be considered. Check here for earnings on stocks: http://biz.yahoo.com/r/

*** Trading Tip *** There are a couple of things to consider on overnight holds of stocks that were bought as day trades. Once the market closes, you have no control of the stock. The MarketMaker or specialist can open it for trading any at any price, within reason, considering market conditions. Those conditions do not even have to be relevant to your stock. The only exception is the pre and post market trading that often lacks liquidity and can be selling way off the market's true price. Then you have to consider the possible news effects. For every one journalist out there looking for "objective" news on a stock, there are probably ten trying to dig up dirt on anything they can find. Accounting problems, asbestos, and a number of things that we have seen, that not only affect stocks specific to the problem, but any in the sector or doing business with the affected stock.

*** Trading Tip *** Scalp Alerts: If it does not also say Short Alert in red letters, it is always a buy.

*** Trading Tip *** I strongly recommend that the first thing you do every morning when you log on is review the log. A number of the stocks that are in the log may be in play for the rest of the day.

*** Trading Tip *** It is up to each trader to manage their own trades. I do not give exit points on every call and maybe not even the majority of them. The prices in the alerts are for guidelines only, not intended to be exact entries or exits. However, I never suggest you "chase" a stock to get into the play. Remember, missed money is better then lost money.

*** Trading Tip *** Due to the large diversity on the membership that includes all sorts of folks from all walks of life, we have a zero tolerance policy for off colored remarks, cussing, racial and/or religious comments or any other comments that can in way even slightly hint at being of an offensive nature. This includes cleverly disguised attempts to circumvent the policy. Your cooperation is greatly appreciated.

*** Trading Tip *** In markets where the range is very narrow you usually get very choppy trading, meaning stocks in play don't go very far any one direction for very long. The more conservative player will take profits often and not look for the Home Run play. Or as I call it OLT -- Old Lady Trading. Or Floyd's Four-Gets: Get in-Get Profit-Get Out and Get Away. I also suggest very tight stops.

*** Trading Tip *** Scalp Alert is intended to alert you of a trade that will, for the most, part be very fast. This doesn't mean always, but in most cases. I also use it to alert you to a trade that I think may not go very far or has tendencies to change direction very fast. On a Scalp we are usually looking for .0625 to .375 profit. But they may go for more. I suggest that unless you have a fully integrated professional trading system, you not try the Scalps. I also suggest that you not wait very long if they fail to move. There are exceptions to all the rules. Pro trading system: http://mbtrading.com/

*** Trading Tip *** Rumor plays are always in the "high risk" category. There are all kinds of rumors on the street every single day. The large percentage of these rumors never become fact. I would never recommend anyone buy and hold based on a street rumor. We don't allow rumors to be posted here from message boards or any other source unless it is from one of the mainstream media sources. It has to be one I can verify. The date, time and source "must" be posted in the original post, no exceptions. Most long time members avoid posting rumors all together (a good idea imho) because they know this is my pet peeve. Rumor plays are usually over with very fast. I recommend throw away money only on rumors and then only for pros with trigger systems.

*** Trading Tip *** Please do not post any "news" into the room unless your original post includes the date, time and source, no exceptions. All news must be form verifiable, legitimate news sources such as Dow Jones, AP, Comtex, Reuters or one of the other standard news services. No bulletin or message board posts or rumors (see above Trading Tip on rumors) are allowed. We also request that you do not cut and paste copyrighted materials into the room. That includes Yahoo news. Thank you for your cooperation.

*** Trading Tip ***   Click on the underlined stock symbol in the Alerts and it will take you to the news story on the stock. It will be delayed in some cases as certain embargo conditions must first be met. I will often give an additional link under "Click here for complete story". It may or may not take you to the same story.

*** Trading Tip *** 3X Rule: When a stock reaches a point of resistance and fails to get past the resistance, it will usually make a couple attempts, after a short pullback, to break that resistance. If it fails to do so after two or three tries, it will nearly always fall back significantly. This goes hand in hand with the concept that if a stock fails to move up, it usually will go down. (3X Rule works the opposite on shorts).

*** Trading Tip *** When you see me say *** Half Lot ***, it usually means that it is less then a perfect set up, and I'm not as sure about the play as I would like to be. However, these days we are not seeing the follow through the way we used to. Therefore, I am anticipating the bounce a bit prematurely and getting some success at it. But it is a bit more on the risky side. The half lot theory is the same as in the first hour of trading. Use tight stops and cut and run or be ready to average with the second half if you have the confidence that it's the best way to make the play.

*** Trading Tip *** Please keep in mind, a company can report lower sales or any number of what seems to be neg things and "still" reaffirm guidance, and even, on rare occasions, raise guidance. No one "alert" is going to tell you, beyond a shadow of a doubt, what the stock will or will not do on any given day.

*** Trading Tip *** Lot/Half Lot Size: The size lot you choose to trade is up to you. Only you can make that decision based on how much money you have in your account, your risk tolerance and whatever other factors you choose to consider.

I used to trade in lots of 500, 1000 or 2000 shares depending on the price of the shares and/or how strongly I felt about the play.

There is a theory today that may or may not be valid depending on your own personal trading plan, again based on your specific factors. That theory is to trade larger lot sizes and look for smaller moves. It will give you a better commission cost vs profit and is thought to lower the risk by getting out of the stock before it turns against you. Of course, if you have twice the number of shares and it does turn, you have double the loss. So that is for you to decide.

The Half Lot theory is based on the idea of lowering risk on plays that are less than the ideal setups or on stocks that move in radical patterns. Simply stated, you enter with half your normal lot size. If the stock turns against you, you have two options. You can re-enter and average on the trade, or you can cut and run with less damage than if you had traded your normal lot size.

*** Trading Tips *** Hot Stock of the Day: I am not a big fan of chasing the "hottest" play of the day. Too many traders feel they have to be in the "big one", the one that went to the moon, etc., etc. I never felt that way when I was trading and still don't. If you look at recent history, we have seen some if not all of the biggest loses reported on those "hotties". IVAN, RMBS, and RIMM are three examples. Sure you see some nice profits also, but on average it will not pencil out for you.

I'm not saying you should avoid these plays. Yet, sometimes it is better to wait until they settle down a bit before you take a leap of faith.

The other big concern I have on these high flyers is the idea that "they have to come down" so people start shorting them. In fact, they may well crash like a scud hit Cessna, sooner or later. But in the meantime, if they keep going, the sky really is the limit. Look at RMBS and RIMM again. And then look at the shorters in KKD, AMZN, NFLX, XMSR and a host of others. Sure they have all had pullbacks from time to time, but did those pullbacks come before or after the margin calls? This is not to mention your capital tied up while you wait for the dip.

There are always stocks to trade; some days there are more then others. But feeling you have to be in the "Hot Play of the Day" is high-risk behavior I would avoid.

*** Trading Tip *** Volume Alerts: We added this feature because sometimes I see a stock moving and have no idea why. I use the Volume Alert to get the symbol in front of you as fast as possible for those of you with the right tools and the ability to see if you want to trade the stock or not. In many cases the stock has already moved up or down about as far as it is going to go and "may" be a better bounce play, up or down, depending on the original move. The Volume Alerts are from different sources but most of them are based on activity above the normal daily volume for the stock. This will create a situation where a very low volume stock can trigger an alert but still not have enough volume to make it one you should risk trading. On the other side of that is the stock that trades with large volume that has ramped up but has not traded enough volume to trigger the Alert. In that situation we oftentimes get the alert "after" the biggest part of the move has been made.

For the most part, these Volume Alerts have given us some nice plays, but you have to be selective. If you are looking for something to trade, you should check these Alerts out. But again, you have to have the right tools to make these plays, imho.

*** Trading Tip *** News: How to find it and making Request. If you click on the underlined symbol in any of the Alerts it will take you to a full copy of the news release if and when it becomes available at Yahoo News. Everyone should have Yahoo News bookmarked. There is a 20-30 minute delay before the news is posted to Yahoo so the story may not show up if the Alert in the room is from a Real Time news story. Be patient and try again in a few minutes.

For those of you that what to know the news behind the stocks in play, I suggest you have both Market Watch and Yahoo News available, maybe even opened, while you are trading. Both of these are free. If you want real time news, Dow Jones is probably the best at the most reasonable price. However, you can have too much news. It is not the goal of the trader to be on top of every breaking news story on every stock on the street. That is just not possible. Here are the links for Market Watch and Yahoo News -
Market Watch: (http://www.marketwatch.com/news/newsfinder/default.asp?scid=0&siteid=mktw&cbsReferrer=)

Yahoo Finance (News): http://finance.yahoo.com/

Dow Jones News: (see your broker)

Making request for news. For the most part I have no problem looking for news on a stock. However keep in mind, looking for after the fact (move) news, falls under the research category and is not necessarily the best utilization of the Real Time news search programs. I try to respond to every request however; I would appreciate it if you would do three things before you ask if there is news on a stock you are following or one I have called. 1. Check the log. I usually give some reason for making the call. 2. Check with Yahoo News 3. Check with Market Watch.

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