Excerpt from: Day trading newsletter Issue No. 004
Scalping 2000 share lots
From: Robert L.
Hello,
I have been working with a published method of trading
2000 share blocks for .06 cents profits. My success has
been moderate. I work a regular job and can't devote
the required time. I have one day per week to trade
unimpeded. I have gotten stuck with a couple of
trades that went the other way fast. Now if I sell
I will really lose $$$. My hope is that it goes back
up so if I take a hit it won't be large. What do
you think of this method and when is it time to
bail and eat the loses.
Regards,
Robert
~~~Christopher's Response~~~
Robert,
I would be doing you a disservice to tell you anything
but the truth. The plain truth is that scalping is a
very advanced method of trading and no one should
engage in it until they are fully prepared. If you are
not setting stops (as you say...getting stuck with a trade)
and if you have trouble taking stops when
they arrive, then you really need to back off from scalping
or you could be faced with large losses. A scalp is a scalp.
It's not a position trade nor is it an investment, but it
will become one very fast if you are not prepared to exit
the trade when you need to. I'm sure your criteria for a
good investment is not the same as your criteria for a good
scalp..at least it better not be!
I would strongly suggest that you begin to think about (swing)
trading smaller share lots with the advantage of wider stops
to facilitate your busy schedule. There are many reasons that
you should not be scalping large lots at this stage in your
trading.
Begin to look for (swing) trades that you can hold from 1-5 days.
You can easily set a stop limit order to execute automatically
if conditions warrant while you are away from your trading system.
I should also add here that there is absolutely no room for
"hope" in trading. There is only room for planning your trade
and trading your plan. There is certainly room for positive
thinking and optimism, but not hope because the market could
care less how we feel and it will remind us of this fact
everytime we forget it.