Tuesday 18 March 2008

Best times for stock trading comes only 6 times

1. Let's say a stock increase 5 pct or additional through the opening and there's no news about it. Usually, the stock will go down off after 30 minutes of trading. Why Market makers might be trying to open the stock at an artificially high price to sell off excess inventory they've get the day before. Though, if the stock doesn't drop after 30 minutes of trading, it's liable to go on rising for the rest of the day. Tactic: Buy at 1/16 above the day's high after the opening. Set a stop at 1/16 under the days low.

2. The conflicting of the above strategy. When a stock opens lower on no news, it could be that sell orders from nervous investors have piled up since the close of trading the day' before. Occasionally market makers open the stock falsely low, to draw in more panic sellers. This allows them to accrue shares, because market makers as a rule buy on price declines and sell on price increases. After 30 minutes, the stock usually recovers in price and normal trading begins. The market makers profits by selling the inventory they've accrue at the lower price. However, if the stock goes on to drift lower after 30 minutes, chances are it'll decline more during the course of the day. Tactic: Sell short at 1/16 below the low of the day; set a stop at 1/16 above the day's high.

3. Suppose you buy at 1/16 above the bid. Sell at 1/16 below the ask. The strategy works best with non-volatile stocks where the spread is at least 3/8 of a point. When winning, you make a quarter points per trade, or $250 on 1,000 shares. You can also short the spread by selling short at 1/16 below the ask and covering at 1/16 above the bid. Problem is, it's not always possible to get in and out at these levels. Market makers may easily spot what you're doing and adjust prices so they blow you out. Often day traders try this tactic several times during the day before they succeed.

4. An additional fairly simple tactic. Follow the message threads at, for
Instance, Silicon Investor for a particular stock. When everyone is screaming that the stock is going to make a move, leap in with the crowd. Be satisfied with a 1/8 or 1/4 point.

5. With this contrarian’s policy, you buy into weakness and sell into force. That is, you buy stocks with small percentage turn down relative to the market. You're hoping they'll gain when the market reverses. Hold off buying until the stock trades above its opening. Reason: earlier buyers of the stock will sell to prevent loss, thus driving the price down in the short term.

6. Stocks a lot relieve off their highs of the day during the last hour of trading. Why because day traders and market makers seek to exit their positions and lock in profits. A price downturn often occurs during the last hour of trading as many seek to exit their positions. This downward impetus can create some lucrative short-selling chances.