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extensive memoryfor grinding are also best advised to play the DAET game as a specialist. My clients acting as specialists have generated handsome profits. The specialists usually know a little more than other-style DAET traders about the stocks they trade but not so much as to develop a strong opinion. The most important information to know is when earnings are to be announced and other relevant information that might cause a price movement at a particular time. Fundamental analysis is not very important and should almost always be avoided. |
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The parameter traders are similar to the grinders except that instead of jumping in and out of a stock very quickly, they allow for larger interim moves (both for them and against them) but within a disciplined parameter. For example, if they buy a stock and it does not go up immediately or declines slightly, they may stick with it for a while, but within a predetermined parameter (perhaps a half point). If the stock continues down to where the loss is a half point, it is then immediately liquidated. On the other hand, if it goes up, they will usually hold a little longer to maximize profitability. It is not sold out for the first eighth or quarter profit, but rather held for the potentially larger profit. The benefit of this technique is that you do not get chewed up by a choppy market. Your tolerance for a little more ''pain" can help avoid the continuous buying and selling that a stagnant, choppy market can create. This technique can also save a little in commission charges, but if the parameters are not strictly heeded, large losses will occur. Only the most disciplined Direct Access Electronic Trader should employ a parameter strategy. It is useful for the DAET trader who is a little more laid back in his or her approach and cannot readily handle a grinder or specialist approach. |
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Sharpshooters methodically watch the tape and screen, entering only when they are "absolutely" sure a good trading opportunity exists. Unfortunately, being absolutely sure is far from |
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