Obviously he knows what he's doing - so why write a book? The people who write trading books don't know how to trade. That's why they write books.
Right and besides which, if he started writing a book where is he going to make the $$ to pay for his living expenses? Living off from a 4K acct is pretty tight. My advice would be to get some more capital so that you can build up your account from your gains instead of always being at scratch 4K per month because you have to live off from your account.
DCB means dead cat bounce. As in, even a dead cat will bounce. It is (well, my definition anyway) when a stock bounces even though it probably isn't even worth the price from which it does bounce. It becomes so oversold, after continuous heavy selling, that buyers will come in nonetheless. For example, if you were nimble and knew what you were doing, you could have traded Enron under $2 and then under $1 for gains of 50-70% overnight. But it does depend on near perfect entries and exits. RSI and OBV and volume are the indicators I follow for DCBs. ADLAC reemerged as ADLAE Friday, and began trading at about $1.50. It was at $2.50 within hours. These are the kinds of plays I've thrived on in the past year. So yeah, I will stick to this plan, although I wouldn't dare risk too much on 'em, even though I've been lucky so far. Aaron
Just to add a caveat to what I said before about minis. If you ever consider trading them, don't start with less than $10K trading 1 contract. The leverage is nice, but you need a buffer for the inevitable draw down before you become profitable. Also, take a look at http://www.interactivebrokers.com/index.html if you stick with stocks (or futures). The commission savings on a small account really adds up at a penny per share, and you'd have direct access to ECN's and exchanges. Other direct access brokers are good, but none has met IB's penny per share yet. Tradestation is close at 1.2, but it's $99 per month.
What would really be nice is if IB had a cap on it's maximum charge per trade. If one wants to buy 10,000 shares of a cheap stock it will cost you $52.50 each way at IB. I would like to see a cap at $25.00 per trade like Echo...
Aaron I was wondering if you bought ADLAE on the day it re-opened, and if so, how wide your stop loss was. (And even your purchase price if you are willing to disclose). The reason I ask is that (going long) ADLAE was probably a much more riskier play than the others you have mentioned like EDSN and WCOM, because it was so volatile in the first hour after it re-opened.
I forgot about ADLAE and missed it. And now looking at the Friday chart, it opened around 2.60 and only went as high as 2.90, so I wouldn't have been able to profit on it anyway. My bad. I thought it had opened around 1.55. I'm not sure where it was trading premarket. But if it had opened that low, I would have bought into strength an volume, with a fairly wide stop loss. I have learned you have to have a wide stop on these. I bought AVAN at 1.05 ish and sold at .93 a while back at th climax of its drop... it went to 1.60 later that day as I recall. But I am comfortable with wide stops because I have learned to trust the DCB almost blindly. But I have had great luck with EDSN and PMTR and CVSN and WCOM and the like. Even called bottom on GRB, but didn't buy that one. There aren't any looking quite as ripe as those for this coming week, but AOLA AVN and CLPA might be getting there. (Forgive me if making "picks" in these forums is frowned upon, and someone let me know if it is!) Aaron
Aaron, what you have to keep in mind then is that dcb are the by product of a severe bear market + accounting shenanigans. How long will it continue? Who knows! In other words this is environment specific, just as breakouts were the place to be in 98-99. But just don't buy into the strategy blindly. Know why it works and why you have so many opportunities to choose from right now. Also start to experiment with other strategies once you have this one down pat to build up some insurance just in case the environment does change.