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absolute. Because stocks usually look best at the top and worst at the bottom, sharpshooting is very difficult. Direct Access Electronic Traders sometimes become sharpshooters when they are in a slump, thinking that by trading more slowly and deliberately they will do better. The fact is that they usually don't. DAET traders usually try getting into a "rhythm" with the market and flowing with it. The "trend is your friend" is the attitude most DAET traders live by. Being methodical and cautious are good traits. But if being overly so takes you out of the flow ifthose traits keep you from "pulling the trigger" and participating in the trendthen they could be causing more harm than good. |
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Since nobody knows which trend will be real and extended, the DAET trader will often get jiggled in and out of a stock. This is part of the game, and there is no way to prevent the small losses created by jiggles. They are irritating as hell, but an integral part of DAET. Without jiggles and some losses, everyone would make money on every trade; therefore everyone would be a DAET trader and therefore there would be no game at all. Thank goodness for modest losses! |
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As the market is becoming more and more volatile and more players are playing the direct access electronic game, sophisticated traders are starting to trade more like market makers by fading a move. Fading is the practice of selling into strength and buying into weaknessgoing contra to the trend, because of the many intraday direction changes that occur. As more and more trend traders come onto the scent, the opportunity for traders will be even greater. Once again, if you fade the market and turn out to be wrong, you must immediately cut your loss, just as you would in any other strategy. |
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A diversion trader is someone who loves the action of trading but has another full-time profession or is perhaps retired. Businesspeople, doctors, lawyers, engineers, etc., are often |
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