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Scott,
One book that REALLY helped me understand the psychology of
trading was "Trading for a Living" by Dr. Alexander Elder.
In it he gives a very good discussion of price movement. Stocks go
down for two reasons:
1. People are more afraid to buy than they are to sell.
AND MOST IMPORTANTLY................................
2. Everyone has ALREADY bought!
Today was a classic example of number 2. You might also think of
this as "buy the rumor and sell the news".
John
-----Original Message-----
From: Scott Cooper <scooper@xxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Thursday, October 16, 1997 10:28 AM
Subject: What went wrong?
>I need some help. I own some cpq stock and also bought some oct 75
>options. After yesterday $+3.625 to 77.25 I felt pretty good when I
>heard this A.M. that they beat earning expected which is usually good
>for a point or two and thenit was going to split and increase its
>dividen. this sounded like my Oct. $ 75 option was going to be worth
>money. The stock is now down over 2 points What happen? What did I
>miss? scooper
>
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