Sunday, August 2, 2009

New and trading this upcoming week

My current positions and watchlist include BAC, C, AMD, RIMM, GS, AAPL, LVS, AIG, POT, and a few more.
I do not trade what they call "gamble plays" such as Pink sheets or blue chips. Also I stay out of small cap, most medium caps and virtually all pharmaceuticals. The reasoning behind this is because when I worked as a day trader, I could see beyond the level 2 screen. Typically the best one can achieve at home is paying to see the Arca Openbook which you must pay a subscription fee and only shows NYSE and Archipelago ECN's.

But before, I could see all other ECN's such as Bats, EAB, EXB, Nasdaq, Bosx, MWSE, etc realtime. The advantage is that I could see stock manipulation occur right infront of my eyes on a daily basis and learned that stocks with low volume/low share price can be easily manipulated hence the probability of small cap, OTC etc being controlled by a larger entity is very plausible.

Pharmaceuticals depend too much on FDA approval of drugs. I'm not saying that you should not play them but it seems that its pretty much 50/50 as to whether the FDA approves or denies the drug. I think its best to have option spreads in those situations as a large swing in either driection will net you profits.

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