Playing the Programs for Trading Gain

They could be the key to profits.
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Wow that sell program seemed like some sort of knuckle-ball, an off-speed pitch that couldn't be hit. It has been so long since sell programs played havoc with the stock market that sometimes we forget how to hit this stuff.

For our shop, that means you get down there with a limit order. Sit underneath the bid of the stock and be prepared to be whacked.

That's the only way to beat the programs. Use them to your advantage. Remember why they can work for you. The specialist firms just aren't there to make orderly markets when the machine selling stemming from Chicago hits New York.

Take

IBM

(

IBM

:NYSE). With the stock at $189 when the sell programs were raging, I went in and bid $187 for ten thousand shares. If I get hit; windfall. If I don't; that's okay, too. That way I don't feel abused or confused; I feel empowered into getting a great basis.

The notion of bidding in this world where the

Amazons

(

AMZN

:Nasdaq) go up 30 points in a flash may seem quaint. But that doesn't mean I should content myself with undisciplined trading. A good basis is still the best way to insure you have a good trade.