MY SECRETS OF DAY TRADING IN STOCKS BY RICHARD D. WYKOFF

 

Chapter 3: Analyzing The List of Stocks Page 1 IN the last chapter we referred to Union Pacific stock as the most desirable stock for active trading. A friend of mine once made a composite chart of the principal active stocks, for the purpose of ascertaining which, in its daily fluctuations, followed the course of the general market most accurately. He found Union Pacific was what might be called the market backbone or leader, while the others, especially Reading Railroad, frequently showed erratic tendencies, running up or down, more or less contrary to the general trend. Of all the issues under inspection, none possessed the all-around steadiness and general desirability for trading purposes displayed by Union Pacific. But the Tape Reader, even if he decides to operate exclusively in one stock, cannot close his eyes to what is going on in others. Related Articles: Fibonacci - Who Was He And How Could He Improve My Stock Trading Profits? The word Fibonacci means a lot of things to a lot of different people For mathematicians, Fibonacci is an important number sequence ... Author: Chris Towland Do You Know What Is The Single Most Critical Mistake In Trading The Stock Market…? Well maybe that's overstating it a little, but it's certainly one of the most important It is…(drum roll please)… “the need to be right” ... Author: David Chandler What The Stock Trading Seminars Don’t Tell You! Imagine yourself sitting in the local Stock Trading Seminar You are anxious and ready to learn ... Author: Ezzone Trading Risk And Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career. You know the old joke: "How do you make a million in the stock market Start with two million ... Author: David Jenyns Trading Expert Discovers Ways To Beat Stock Market Odds With Money Management The first point to mastering money management is that you have to understand when you’re trading on the stock market is that you are playing the odds – but unlike many forms of gambling, you can make money ... Author: David Jenyns Frequent opportunities occur elsewhere. In proof of this, take the market in the early fall of 1907: Union Pacific was the leader throughout the rise from below 150 to 167 5/8. For three or four days before this advance culminated, heavy selling occurred in Reading, St. Paul, Copper, Steel and Smelters, under cover of the strength in Union. This made the turning point of the market as clear as daylight. One had only to go short of Reading and await the break, or he could have played Union with a close stop, knowing that the whole market would collapse as soon as Union turned downward. When the liquidation in other stocks was completed, Union stopped advancing, the supporting orders were withdrawn, and the "pre-election break" took place. This amounted to over a 20 point decline in Union, with proportionate declines in the rest of the groups' list. The operator who was watching only Union would have been surprised at this; but had he viewed the whole market he must have seen what was coming. Knowing the point of distribution, he would be on the lookout for the accumulation which must follow, or at least the level where support would be forthcoming. Had he been expert enough to detect this, quick money could have been made on the subsequent rally as well.   >>> Page 2