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No. of Recommendations: 4
KW:

I have a feeling this will be longer than my Fool interview. BTW, if you happened to have read it, you may have noticed this quote: "If you're going to skate on thin ice, you may as well dance", which pretty much describes not only my trading style, but just about everything else I do, so doing what I do may be as hazardous to your health as to your trading account.

I started daytrading in 1999 when CDs and savings account interest rates were at a low, and I talked DW into letting me shift some of our reserves into a trading account to see if it could do better there. My first month, I was $1,400 ahead on a 10K account. By the end of the year the account had an eight-fold increase and since this was way ahead of what I expected to make, I considered everything above the opening account balance monopoly money, so see above for dancing on thin ice.

"... have you any great books you can recommend on money management and the use of stop/losses?"

I read Jesse Livermore's "Reminiscenses of a Stock Operator" but that's all. It provides the reader with a good grasp of trading in general, but I find articles dealing with current trends more applicable to what we're dealing with today. As far as stops are concerned, every open trade has its own characteristics, and a tight stop may be necessary on one, the next may require something totally loose, so I don't follow any set rule. You either have a feel for it, or you don't.

"... do you have any holdings which are longterm, or are all your trades swingtrades and some daytrades?"

Anything long term is strictly by accident, like if something tanks and I don't have a stop in place. These are usually pennies, though, so I don't consider them individual stocks, but figure the gain/loss ratio of the group as a whole, and as pennies go, if I come out ahead on just one, it more than makes up for multiple losses on others. One such example was NNVC. If you go back three years on its chart, you'll see why other losses I incurred may be meaningless.

"... do you use a discount broker and LIVE software for stock trading?"

Live software scares the daylights out of me, so I trade via Ameritrade -- they're not as good as they were before TDWaterhouse took them over, but I stopped switching brokers after TDW took over my two previous brokers, since it looks like they'll soon own every brokerage firm there is, anyway. I used to subscribe to Level-II, during the hectic daytrading days, but I don't see an every day advantage in it anymore, so I dropped it. The $9.99 trading commission doesn't bother me because it's a non-issue with large blocks of trades.

As a rule, I may post alerts or heads up, but never recommendations for individual stocks. I watch particular sectors, with biotechs and energy at the forefront, as they tend to have the biggest moves -- unfortunately in both directions. If you've been trading a while, you have your own methods; mine tends to be interpretations of how certain news may affect stocks I follow. Again, I use NNVC as an example: any report of an outbreak of bird flu, especially a human death attributed to it drives up the price. I hear so much as a rumor of a chicken falling off its perch in the Ukraine, and I'm going long. Two days later when it hits the news, I chuckle as the greedy line up to buy in after the market makers insert a big gap-up into the price.

I preach DD and patience, but don't always follow my own advice. So don't do as I do: the ice is thin.

~aj
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