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Don Green, Never buys on dips!
Don Green buys on Short Covering, and bounces off of extreme moves in
prices. a big difference.
Trading on Short Covering: This is done when you believe there is major
doubt in a soon to be released earnings report or some other event the can
strongly effect the price of a stock. I did this recently when I traded
Micron Tech and again with Intel, both discussed in the past in this forum..
Unfortunately, I didn't check into Boeing before I traded it. Too little
time (hindsight Find Time!), and there was this short covering which worked
against me and moved the price higher, when I was shorting it in a very DOWN
market. ...My mistake.
The strategy is, as I explained before after I did it.
Short sellers, which I am, tend to chicken out in their short as the
potential news or event is about to happen. Such as big board meeting or an
earnings release etc.. Generally the stock may have dropped if it might be
negative to the stock's future so the short sellers have made their money,
and they don't want to risk their gains so they cover (which means they buy
the shorted stock to clear their short with their broker.) So what happens
when they all start buying, the price rises. How do you choose when to buy,
watch the price as the time comes close to the closing bell. It will seem to
settle at a certain level (bottom out), when you see this get ready. I have
found 3PM is a good starting time. The Short Sellers just start buying the
shorted stock and get out. It is usually over after 30 mins. Well during
this timeframe the stock will generally rise quite sharply. Since I am not
greedy and I am only looking for 1 point or so, it is quickly made. With
Intel, it moved so fast I was able to gain 2.5 points in a very few short
time. That was becuase there was SO much news about it.
I have been trading in this same "gunslinger/Scalper style for many years"
successfully.
How did I learn this, from watching and trading the market for a long
time...
This is just one concept I use and have found to be very successful. Will it
always work NO. The greater the doubt the more shorting you will see. The
greater the potential gain you will see.
Another strategy I have used for years is trading on BAD news. This
trading technique offends many so I won't describe it here. But you might
be able to guess how I might use it to make money.
By the way, I am not going to post regularly on this forum any longer, but
for anyone who might like to learn more about how to trade or day trade or
follwo my trades send me an e-mail note with a little investment
background/history, so I will know what I need to explain. I will try to add
you to my e-mail list. I am not sure how many addesses I can handle in my
e-mail program, but I am trying to find a way figure something out.
In this market enviorment there is a lot of money to be made, because there
is a lot of price movement. Yes, it can be dangerous, but so can driving
your car to the shopping mall. If you can learn how to react when a car
swirves in front of you
or a car suddenly hits his brakes, you CAN trade in this or any market other
market..
I have nothing to sell you and nothing to gain. I am like a runner, who is
always trying to get someone new into runner, why because he loves it and
wants to share the experience.. Personally I hate running! But I love the
market.
I just really enjoy the daily mental challenge of trading. THAT SIMPLE.
Regards
Don Green
-----Original Message-----
From: Patrick Slevin <>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Friday, October 24, 1997 11:36 PM
Subject: Gen: SOD
>Buying the dips in shorter time frames will seems to work because it has
worked for
>investors on the broad market for the last few years...personally, I think
this is one
>of the flaws in the market psychology today and shortly someone will be
left holding the
>bag like E.F. Hutton in 1987.
>
>Be that as it may, buying dips in individual stocks will work sometimes,
and sometimes
>it won't. For example...Don posted 3 trades that I know of, and made out on
one of them.
>It's just not always going to work just because your gut tells you it will.
>
>Was it in 1992 when IBM declined from over $100 down to around $47? I'm
sure there were
>a ton of people that had a gut feel to go long that stock as it inched down
towards
>December 14th or so-----The day they came out with earnings, cut the
dividend and the
>stock fell 10 points on the open and rebounded less than a buck before it
continued
>down.
>
>~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
~~~~~~~~~~
>
>Anyway, sorry it's long-winded....buying dips in this environment gives me
a chill.
>
>--PJS
>
>>
>> Think of it this away. Many long term investors buy the dips. Same
principle
>> applies but this is in a shorter time frame. You just need to have the
cash
>> reserves to be resiliant.
>> Me personally I only do this when I am going short.
>>
>> Harley Meyer
>>
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