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Troy,
Re: your posting, I believe that Jeff Cooper states he trades 1,000
shares, occasionally 2,000 or more when he adds to a position. I've
studied his book/tapes/newsletters, and traded the setups off his fax
service since last year and (to answer your question) my opinion is that
for this type of trading, you need to trade 250-500 shares minimum, to
make it worth the while grabbing 1-2pts on a trade.
Of course the reason that his method does require substantial capital to
trade with is that you are buying (or shorting) a number of >$50-$100
stocks at a time, and leverage is only 50% for stocks. But keep in mind,
you don't have to trade 17 positions at once, since you are constantly in
and out of positions -- you can trade 1, 3 or 9 positions, whatever (he
recommends taking the trades with multiple H&R setups). As in SOES
trading, you turn the same capital over a lot during the week. A pillar
of his methodology is, if you're not _up_ on the position by the end of
the day - you're out! -- so that capital is free to trade again. He
doesn't carry too much over, unless it closes strong and meets other
criteria. Smart.
It requires a lot of time, energy, and diligence to trade stocks this way
- you're always watching for setups to trigger, then micro-managing your
trailing stops on the positions all day. Getting "in" at the desired
price can be very hard since stocks often move in bolts/surges. And
getting out at the right time is a real art-form. This type of trading
is definitely not for the "look at em' every half hour" kind of stock
trader!
I believe his methods are fundamentally sound, enjoyed his fine book, and
would be interested continuing the discussion here or privately if you
and/or others are. I've traded SOES last summer, and spent about two
months this spring intensively trading Cooper's setups/methodologies
before going back to OEX and stock-option trading since May. I feel that
trading his way has great promise if you are adaptable, have the
dedication to that mode of trading, and are willing to work very hard at
it every day, over a substantial time period/learning curve.
Regards,
-Steve / Cupertino, CA
On Wed, 13 Aug 1997, Troy Kelley <tkelley@xxxxxxx> wrote:
>I have Jeff Cooper's book. Some people have been asking about it. It is
>O.K., not great.
>
>One thing that really struck me about it was his money management. He
>must be trading on an extremely large account. He goes through a diary
>account of taking stock profits of only about a point. And these are 30
>dollar stocks. When I trade 30 dollar stocks, one point covers slippage
>and comissions, and that is it.
>
>I might post more verbadum quotes from the book if anyone is interested.
>
>Troy
>
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