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  • #16
    Broker fees have almost nothing to do with it. They were low then too. Market just doesn't behave like it used to. In the late 1990s a stock might swing dozens of points in one day! and travel several points in minutes if not seconds. We would anticipate the effect of news and buy in before the bell or right after. Or a rumor of news would circulate and we would "buy on the rumor" and "sell on the news." I had day trader friends who had so much money into the market that when they would announce a purchase, we could look on Level 2 (a tool used to view bids/asks) and watch the price rise as a result of their massive purchases. Most days no news was needed at all - the hottest stocks, especially tech ones, would just fluctuate wildly and for the most part go up on a continual basis. When I would buy a given stock I was in for a wild ride and guaranteed a profit that day, as long as I got in on the right side of the swing, and even if I didn't, the stock would usually swing back in the direction that benefited me if I just held on enough hours, or worst case scenario, days.

    This was back when you could purchase Ebay for an adjusted price today of under two dollars and see it thirteen times higher within a few months. Another massive trend at the time was QCOM. Before the late 1990s, QCOM was a stock that you could swing trade on - that was guaranteed to fluctuate between two very low prices. It was a stock that was going nowhere. And then it broke through in mid-1999 when it went through a 2:1 split, and within six months was twenty times higher (about thirty times higher than its average price before the split). Yes, those were the days. You could throw a dart board at the stock market and pick a winner.

    The whole upward swing came to an end right around Memorial Day 2000. It was a steady downhill after that with the bottom being September 11, 2001. Luckily, I was just too busy with other business and sold all the stock I owned the week before Memorial Day 2000. I couldn't have times it better. I didn't get back into the market, other than a few profitable trades here and there, for several years.

    Today algorithmic trading (especially high frequency trading) is used to shave parts of a point per trade, and do it repeatedly to add up to something worthwhile.
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    • #17
      That's interesting, Modee. I've only really traded for the past couple of years so never experienced what the markets were like before, but it makes a lot of sense now. I often wondered how people could be profitable at day trading based on how I've seen the markets nowadays. How do you think the markets behave differently now and what was the catalyst in 2000? What's the best strategy for trading now?

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      • #18
        Back then it was "irrational exuberance." And the "catalyst" if you want to call it that kicked in full swing after a precipitous drop at the end of 1998. After that drop, which some people predicted was "the beginning of the end," the stock market roared crazily until Memorial Day weekend 2000, after which is was a steady downhill until September 11th. 1999 was one of the best years the stock market has ever seen, especially for tech stocks.

        Irrational Exuberance just means that a lot of people decided to buy buy buy at the same time. Simple as that - not as many people buying simultaneously these days. But, take a look at AAPL, a stock I have been accumulating for over six years now. My advice to my friends starting six years ago was to buy as much AAPL as possible and never sell. That stock can go up or down ten points or more in one day, and for a five to six hundred dollar stock, that translates to a lot of transactions.

        I still believe AAPL is a good buy, for a long term investment.
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        • #19
          So in short long term strategy wins out.

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          • #20
            Well, there are only two ways to win in the stock market - one is to be IN the market, as in constantly involved - trading and such, and even then, as you point out, usually long term wins out anyway.

            OR, buy blue chip or the technology stock equivalent, and hold.
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            • #21
              Its all about scalping futures markets :P

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              • #22
                DOW down -278 March 6, 2015

                Actually best if the DOW drops a lot today, and gets the bloodletting over.

                Also, the general pattern for the DOW lately is a shuffle between 17K and 18K. We've been above 18K for a while, so we might be on the path back down for a while, until the DOW roars again!

                CLEMENZA
                Probably all the other families
                will line up against us. But, it's
                all right. These things have to
                happen once every ten years or
                so...gets rid of the bad blood.
                You gotta stop 'em at the beginning.
                Like they shoulda stopped Hitler at
                Munich, they shoulda never let him
                get away with that, they were just
                asking for big trouble...
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                • #23
                  Today was a classic sell off towards the close of the day, and a fine opportunity to go short on some stocks as they peaked a couple of hours before the close. I did that today twice with NFLX, as it was easy to note that NFLX was having a hard time getting much above 425. I shorted it, the second time, right at 425.25 but it rebounded so quickly that it shot back to about 425 and I covered there for a paltry quarter point. Towards the close, NFLX dropped as low as 423 which means that I left based on how many shares I was shorting, two grand on the table. Oh well, money's money, and as they say no one ever went broke taking a profit.

                  Still, in stock trading you must capitalize on what you can on the good days, so that on the days that you lose your profits eclipse your losses. Put another way, you can't be going around collecting a quarter or half point here and there and leaving many points on the table, because the day will come when the stock moves so fast against you that you will lose at least a full point or even two or more before you may pull the plug.

                  Let your winners run, and cut short your losers.
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                  • #24
                    always been interested in the market. have a few positions currently. Have done decently since the auto bail out but would really love to learn more. Need an apprentice?

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                    • #25
                      Well I post some but not all of my trades here. Usually my trades happen so fast that I don't have time to post them though.

                      Feel free to follow me here and yes perhaps at some point we'll collaborate closer. Thanks!
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                      • #26
                        I actually did very well on FOMOCO (F) back in the day. Recently hit VNMC FOR ABOUT 9K.....sitting on a few things waiting to dump. I just dont know enough of the jargin...lol

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                        • #27
                          Just to show that it's all about timing...NFLX went up like 17 points today, and yet I shorted it successfully four times. On the fifth short I got caught as it did not drop enough, but the profit on the others made up for the last loss.

                          Why did I short a stock that was going up? and more importantly HOW did I short it successfully? Well, basically, NO stock goes straight up - the road is always choppy with ups and downs, and within those fluctuations are opportunities to go against the grain. That's the how of it. Why did I short it at all, and not just ride it all the way up? Well, I was late to the party and was worried that it might sell off, which it did actually, at different times. Who could have known that it would close near the high?

                          Hindsight always perfect, but whatever works along the way is okay too.
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                          • #28
                            could use some training. you posted that you shorted netflix 4 times, Im such a newb to it I dont even know what that means....

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                            • #29
                              What is shorting a stock? What is going long? - Free EBAY, PayPal, Business and Law Forums - Ebay Suspension, PayPal Limited
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                              • #30
                                They say that only 5% of day traders make money, and that only 1% make serious money. Part of this is obviously because when you day trade, you are working against the number one proponent you have in the investing business - time. Over time, fundamentally sound stocks (and even many crappy ones) go up. Over long periods of time, it is pretty hard to lose money in the stock market.

                                But take away that time advantage, and you have to not only be good - but good, in the allotted time.
                                Trading is all about Timing - Free EBAY, PayPal, Business and Law Forums - Ebay Suspension, PayPal Limited
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