The preceding story of Redback shooting for the moon is an example of the power of price momentum. Traditionally, price momentum trading was the province of day traders, who, as we have mentioned, would jump in and out of fast-moving stocks without caring what the ticker symbol stood for or what the company did. But [...]

Many active traders seem to pay little attention to the tax consequences of their short-term gains. They believe that they can make enough money with day and short-term trading to make taxes on gains a nonissue. Long-term traders have always been concerned about capital gains, not wanting to hold stocks less than a year so [...]

Active traders know that market makers for NASDAQ stocks like to play mental electronic games. Longer-term investors can save some emotional wear and tear by being aware of the head fake, so when they see it they will not react quite so instinctively and end up feeling duped. The purpose of the head fake, as [...]

This is one of the predictable rituals played out four times per year in the market. Since earnings are considered by many to be the fundamental engine that drives stocks forward, earnings season is never far away from the minds of those who follow the markets closely. Because different companies report earnings according to their [...]

The beginning and endings of months and quarters tend to be related to good or bad performance of the market. The beginning of months tends to be positive, while the end of a month can be choppy, as portfolio managers want their month-end portfolio to look good. So they tend to sell stocks that are [...]

Assuming we have the desire for greater control, believe we have the right to have control, and believe we have the ability to make the changes, what else do we need to know to gain control? We need to have the skills, or tools to put into practice that which will achieve our goal. To [...]

If you hang around day traders at all, one of the things you hear them echo is that losing money in the market is a “good thing.” When I went to the first international day trading conference, which happened to be held in my area in the fall of 1999,1 heard this repeated by presenters: [...]

In December of 1999, the technology sector had been on a very hot upward spiral for over a month, since the market had been consumed with interest rate fears, causing a sell-off in October. James Cramer, referring to this period, unequivocally called this market “the most powerful I have ever seen in my 20 years [...]

Experienced active traders know a lot about getting out of stocks quickly. The good ones have stop limits set, at least mentally, to exit a position when their stock has dropped to a specified level. They have learned to always be thinking about the downside risk of their positions. They do this kind of defensive [...]

Besides the broad stages of the trading day, investors also ought to be aware of some of the cyclical events affecting the market. Active traders stay informed of these events because they know that the events can influence the market. They then time their trades with these events in mind. While the more casual online [...]