Page 338 - THE MARKET WHISPERER

334 PART 10 - Winning Trades

3. The market is moving sideways with no trend (generally occurs during
lunch hours)

4. The stock is priced up to $10. You can buy cheap stocks in large
quantities even if your name is not Warren Buffet

5. The stock shows large trading volume of tens of millions per day

The simplest way to choose a stock is to fish it out of the list that always
contains the “top ten” high volume stocks traded on NASDAQ or NYSE.
Notice that I do not relate to stocks that made it into the list by chance,
but those which are on that listing constantly. On some days, you might
choose Bank of America (BAC) or Intel (INTC), Microsoft (MSFT) or others.
Citigroup (C) used to be the scalpers’ favorite as long as its price hovered
around the $4 mark in volumes of hundreds of millions of shares per day,
before the reverse split was executed, as already described.

When you bring these stocks up on your screen, you will see intraday
volumes of tens if not hundreds of millions of shares, and enormous
numbers of bidders and askers. Many of them are playing the one cent
game.

Who in fact shifts the stock if no one wants it to move more than one
cent? Of course this would not be the scalpers working at the single
cent level, because they are basically locking the price and preventing
movement. The real change comes from the public and from funds bidding
and asking with long-term investment in mind, and they are not interested
in whether the stock has gone up or down one cent.

Let’s assume you have chosen your stock and it’s time to trade. The
operation itself is fairly simple but requires a good deal of experience.
First, even if the price is moving sideways, examine the overall market
trend and the stock’s trend. If the trend is up, you will want to execute a
long rather than a short, and vice versa. Now you need to enter your buy
limit order in the BID, and wait patiently until sellers hit your bid. The
moment you have bought the desired quantity, you enter a sell limit order
on the ASK side, with a profit target of 1 to 3 cents, and wait for buyers to
hit your ask in the reverse direction.

Notice that there is no need to use the short order, since for most of the
trading platforms the regular SELL will operate exactly like a short. Now
that you have sold the quantity you bought at a profit, and added to that
sale a double quantity, you are in a short and therefore need to position
a double quantity on the BID side with a targeted profit of 1 to 3 cents,
repeating the cycle. Once the market becomes more volatile, and based on